What is Socialism anyway?

Economist Richard Wolff made an appearance on Democracy Now on February 24, 2020 debating fellow economist Paul Krugman on the question of the socialist character of Bernie Sanders’ politics, what the Vermont senator and presidential candidate for the Democratic Party calls “democratic socialism.” Krugman, a consistent left-of-center liberal, was right on the substance, while Wolff continued his habit of conveniently defining terms to fit his agenda. Typical of the progressive left these days, Wolff appealed to the fuzziness of terms. 

Krugman argued that, by calling himself a “democratic socialist,” Sanders is handing Republicans their central talking point. This has been a tactic of conservatives for decades, he noted, calling government intervention or social provision they don’t like “socialist.” “In Arguing with Zombies, I have a whole chapter called ‘Eek! Socialism!’ which is about the Republican habit of playing three-card monte. You say that you’re for universal healthcare; they say, ‘That’s socialist.’ You say you’re for universal child care; they say, ‘Think about how many people Stalin killed.’ You know, it’s this crazy stuff. So, why use the word?” 

Indeed, Sanders confesses to the accusation before it’s leveled. In this Sanders is doing the work of the bourgeoisie. When capitalist elites move to roll back progressive reforms—as they have been doing for decades—they can more effectively speak of freedom, choice, and markets over against the specter of socialism. By calling social democracy “socialism” Sanders imperils the future, not only of any reforms going forward (if any are actually made), but also reforms of the past.

Perhaps worse is a point Krugman likely wouldn’t make: Sanders’ rhetoric dresses progressive reform as socialism, and this benefits the capitalist establishment in the long run. It puts the language of socialist politics under capitalist control. Whether intentionally or not, Sanders is rebranding progressivism, a philosophy endeavoring to humanize capitalist relations and validate corporate governance structures.

And then there is this tactic of calling the kettle black. It irks me to no end to hear Sanders talking about tax cuts and subsidies for the rich as “socialism.” It’s a line appropriated from an unfortunately remark made by Martin Luther King, Jr. in a 1968 speech. 

But enough about Sanders. The present blog is about Wolff’s understanding of socialism and his manner of thinking. Wolff is on record claiming that the Soviet Union was “state capitalist,” for example in his book, co-authored with Stephen Resnick, Class Theory and History. But he also shifts his definition to fit his argument. 

In challenging Wolff’s understanding of socialism, I bring to this blog some material I published back in 2003 in the journal Nature, Society, and Thought. Renick and Wolff’s book had just come out and I was surprised to see the state capitalist thesis reappear. Theories that the Soviet Union was something other than socialist roamed the periphery of left academia and politics throughout the twentieth century. Hillel Ticktin argued that the USSR was neither capitalist nor socialist. In his view, the Soviet Union was a historical cul-de-sac, a peculiar and moribund social formation. Antonio Carlo and Umberto Melotti both argued that, while not capitalist, the USSR was not socialist, either. Echoing the earlier theories of James Burnham and Max Shachtman, Carlo and Melotti claimed that it was a bureaucratic collectivist alternative to capitalism. In their view, the Soviet Union embodied a new mode of production. Tony Cliff and Raya Dunayevskaya, among others, maintained that the Soviet Union was, paradoxically, what communists struggled to negate—a capitalist social formation.

I felt then, as I do now, that it is important to address the character of the Soviet Union, because the Soviet Union is the paradigm of actually-existing socialist society for a lot of socialists, but also for bourgeois propagandists. Whatever it was, the Soviet Union was markedly different from the countries of the capitalist world economy. 

We can of course check the character of Soviet Union against the consensus definition held among scientists and historians. Here, socialism is basically defined as collective or governmental ownership and administrations of the forces of production. It’s a system in which the means of production are controlled by the state. Democratic socialism suggests these arrangements are steered by means of popular consensus. For Marxists, emphasis is placed on the state representing the interests of the proletariat. If the economics of the Soviet Union substantially meet this definition, then it was socialist. 

Resnick and Wolff’s Class Theory and History is a twenty-first century attempt to portray the Soviet Union as something other than a socialist society, which means another definition is needed. Claiming to have extended Marx’s concept of communism and to have employed an original Marxist theory of social class, the authors produce an analysis of the Soviet Union that is, according to them, distinct from theories promulgated by both defenders and critics of the USSR. Crucially, unlike theorists who reached their conclusion based on concepts of hierarchy and power, Resnick and Wolff profess to have relied on Marx’s concept of exploitation to reveal the capitalist relations that comprised the actual class content of Soviet “socialism.”

Class Theory and History was not the first work Wolff and Resnick co-authored. There was their 1987 Economics: Marxian versus Neoclassical. Both works share a fundamentally flawed understanding of the historical-materialist standpoint manifest, particularly in the refusal of its authors to acknowledge property as a core component of Marx’s conception of social class. 

A tacit acceptance of bourgeois assumptions emerges early in Resnick and Wolff’s book when they deny on grounds that the USSR was not socialist the legitimacy of criticisms finding Soviet socialism or communism to have failed.

Michael Parenti’s cogent analysis in Blackshirts and Reds, published five years before Class Theory and History, effectively challenges the logic that, if the Soviet Union was not state capitalist, it would be a state with classless production arrangements. This argument assumes that anything less than a classless society could not represent a form of socialism. How, then, could Wolff describe Sanders policies, which in no way portend the creation of classless structures, “socialist”? Wolff wants pragmatism. And Parenti scolds those who put “pure” socialism up against historical or “really existing” socialism. But the character of Sander’s reforms are progressive and not pragmatic from a socialist standpoint. Incorporating markets to create efficiencies in a socialist program is an example of appropriate pragmatism of a socialist character.

In contrast to Resnick and Wolff, Parenti cites the challenge of building socialism during a period of world capitalist hegemony and emphasizes the importance of theorizing from a realist standpoint. Parenti usefully designates the Soviet Union “siege socialist” (more on this later).

Readers interested in comprehensive study of the Soviet Union would be wise to look elsewhere. I can provide no treatment of this matter here. More sensibly, in this blog, I take account of the assumptions and arguments that comprise Resnick and Wolff’s thesis and assess their broader interpretation of the class character of the Soviet Union. Crucially, I raise these points to broach the matter of social class relations. Only in light of these is the proper attribution of socialism possible. 

According to Resnick and Wolff, the two dominant approaches to the study of social class have heretofore posited either property relations or distribution of power (authority relations) as the determining features of class structure. In the former theory, ownership of the means of production—the basis of the social relations of production—establishes social class. In the latter, class is determined by who gives and who takes orders. The concept of class as power and authority is characteristic of previous state capitalist theories. 

In contrast to both property and power conceptualizations, Resnick and Wolff focus on the production, appropriation, and distribution of social surplus. This “surplus labor” definition of class is, according to them, Marx’s definition. Consistent with their approach in Economics, Resnick and Wolff present no textual evidence to support this claim. The “surplus theory of class,” Resnick and Wolff aver, permits a clear demarcation between communist and capitalist class structures. In a communist class structure, the producers and the appropriators of the social product are the same persons. Laborers produce use-values and share or consume them. A capitalist class structure is one in which producers and appropriators are different persons. Therefore, exploitation occurs under capitalism because those who do not produce a surplus (capitalists) appropriate surplus labor from those who produce it (proletarians). Reprising the standard state capitalist formulation, Resnick and Wolff argue that capitalist exploitation can take two forms: “private capitalism,” in which nonstate actors are the appropriators, and “state capitalism,” in which state actors are the appropriators. In their view, the latter designation is the appropriate one for the Soviet Union.

Resnick and Wolff arrive at this judgment via a process of exclusion. They claim that Marxists recognize three basic forms of exploitative class structures: slave, feudal, and capitalist. In each structure, nonproducers appropriate the surplus. In order to know which form of exploitative class structure is present, one must establish the manner by which exploiters appropriate the surplus. Looking at Soviet history, they find that slave relations existed neither in the sense that human beings were property nor in the differentiation of society into master and slave power categories. Resnick and Wolff reach a similar conclusion with respect to feudal relations; generally absent in Soviet society were “formal relationships of interpersonal bondage.” That Soviet society was neither slave nor feudal means that, by elimination, it was capitalist.

Seemingly aware of the flimsiness of this argument, Resnick and Wolff defend their position by claiming that they did not judge the Soviet Union to be a capitalist society merely by eliminating the presence of other class structures. They suggest other points of convergence between Western capitalist countries and the class structure of the Soviet Union: Soviet industrial ministries were similar to the corporate boards of capitalist monopolies; workers in Russia, just as in capitalist countries, were compelled by mechanisms of structural coercion to sell their labor power; exploitation of the proletariat is a feature of both contexts, although in Russia it occurred in state-run enterprises. The authors find especially important the phenomenon of a discourse of freedom, rights, and equivalent voluntary exchange masking the exploitation of the Soviet worker. 

Using a parallel demonstration procedure that is more illustrative than evaluative, they argue that since the surplus was produced in state enterprises, then appropriated and distributed by state entities such as the Veshenka (the Supreme Council of National Economy, later reorganized as the Council of Ministers), the Soviet Union was state capitalist. “The state bureaucrats leading this council functioned similarly to a centralized board of directors of a private capitalist industrial combine,” they write. Resnick and Wolff claim argumentum ad populum, that most historians “admit that the council functioned like a private capitalist board of directors,” yet err when identifying the fundamental difference between a board of directors and the Veshenka—namely that council members were appointed by the state, and that the economy was a state-planned, command affair whose class structure was distinguished by the collective ownership of the means of production. The problem with this explanation, in Resnick and Wolff’s view, is that it assumes “the theoretical framework that distinguishes capitalism from socialism and communism by reference to which group wields power over productive enterprises.” If historians adopted the surplus-labor definition instead, the fact that the Veshenka appropriated surplus would have compelled them to conclude that the Soviet Union was capitalist.

The problems with Class Theory and Historyare numerous. First, the existence of bourgeois characteristics does not mean that a social formation rests upon a capitalist mode of production. Marx emphasizes in his “Critique of the Gotha Program” that the initial stage of communism—what he described as “crude communism” in the Economic and Philosophical Manuscripts—is a social order emerging from the womb of capitalism. As such, socialism, as Lenin saw it, retains characteristics of bourgeois society, namely the existence of wage labor and the right of inequality. Yet, crude communism differs from capitalism because the social surplus is invested in the reproduction and expansion of the forces of production and the elaboration of social services for the benefit of the proletariat rather than being appropriated by private entities.

Extraction of the surplus from workers cannot therefore be in itself an indication of capitalist class relations. As Marx points out in chapter 49 of Capital 3, accumulation, and hence expansion of the process of reproduction even after the abolition of the capitalist mode of production would continue. Moreover, the existence of value will continue to prevail after capitalism: “After the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labor time and the distribution of social labor among the various production groups, ultimately the bookkeeping encompassing all this, become more essential than ever.”

Second, early in the Soviet Union’s development, the Bolsheviks combined features of central planning with retained capitalist relations and processes. Soviet leaders placed the economy under the control of the State General Planning Commission, or Gosplan. The state controlled heavy industry, finance, and foreign trade. However, with the New Economic Policy (NEP) of 1921, the worker-state permitted private agricultural production, retail trade, and control of small industries. The arrangement lasted less than a decade. Stalin established a command economy and emplaced successive programs of rapid industrialization and agricultural collectivization. To be sure, there were other moments of devolution similar to the NEP retreat. In a move to increase efficiency, for instance, Khrushchev permitted local councils to assume many of the functions of state ministries. Yet, each of these moments was eventually negated (for example, Brezhnev curtailed or eliminated Khrushchev’s reforms), and their bourgeois character is in every instance doubtful. It was not until Gorbachev and perestroika that the Soviet government permitted such bourgeois entities as small private businesses and forms of corporations.

Third, in confirming the absence of slave and feudal class structures in Soviet society, the authors rely on the two conceptualizations of social class they earlier rejected as inadequate: the distribution of property and power. The authors must turn to these other features of social class because their conceptualization of class as surplus labor is too abstract and incomplete to differentiate between concrete modes of production. To cover their resort to other criteria, they sneak them in through the back door using a rhetorical sleight-of-hand—they define property and power as “nonclass processes.” 

Yet Marxists conceptualize property and power, along with surplus appropriation, as central and interconnected features of social class. It is through power derived from property that nonproducers expropriate the product of producers. “Slave masters and slaves constitute classes,” notes Erik Olin Wright, “because a particular property relation (property rights in people) generates exploitation (the appropriation of the fruits of labor of the slave by the slave master).” That exploitation takes place is a fact insufficient for determining the character of an exploitative class structure. One identifies a particular class structure by the concrete configurations of these several elements.

Resnick and Wolff’s neglect of property relations contradicts Marx’s concept of social class, a fact that would not necessarily undermine the book if its authors did not claim that they derive their thesis from Marxian thought. Marx emphasizes inCapital 1that ownership of past unpaid labor, that is, capital, is the sole condition for the appropriation of living unpaid labor on a constantly increasing scale. In other words, according to Marx, “property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labor of others or its product.” Property rights derive from “the economic laws of commodity production,” which presuppose a historic process that “takes away from the laborer the possession of his means of production.” Essential to Marx’s theory is the argument that, although surplus production and appropriation occur in previous and other modes of production, the mechanisms by which these operate (the forms they take and their effects) differ fundamentally from those of the capitalist mode of production. At the core of this difference are the private ownership of capital by the capitalist and the ownership of labor power by the worker. Since private ownership of capital is, for a Marxist, one of the principal components of capitalism, it is unreasonable to continue calling something capitalist when revolution abolishes its defining economic relation and negates its legal categories.

Others working with the tools of historical materialism echo Marx’s emphasis on property relations. Even while his reformulation of Marx’s class analysis emphasizes authority relations, the late Wright observes in Class Counts the following: “Within the Marxist tradition of class analysis, class divisions are defined primarily in terms of the linkage between property relations and exploitation.” Elsewhere Wright notes: “Ownership of the means of production and ownership of one’s own labor power are explanatory of social action because these property rights shape the strategic alternatives people face in pursuing their material well-being.”

In Blackwell’s Dictionary of Marxist Thought, András Hegedüs cites Oskar Lange’s characterization of property as the organizing principle of capitalism, one that determines both the relations of production andthe relations of distribution. Hegedüs sums up his own view in the following fashion: “In Marxist social theory the notion of property and some related categories (property relations, forms of property) have a central significance. Marx did not regard property only as the possibility for the owner to exercise property rights, or as an object of such activity, but as an essential relationship which has a central role in the complex system of classes and social strata. Within this system of categories, the ownership of means of production has outstanding importance.” 

Even orthodox sociologists grasp the central role property plays in class analysis from a Marxian perspective. The late Aage B. Sørensen, an authority on social stratification models, argues that Marx’s conception of class is based on property rights. At the same time, Sørensen recognizes that the core process of class relations is exploitation: the worker enriches the capitalist because part of the surplus produced in the labor process is appropriated by the capitalist. These elements of the theory—property and exploitation—are what make Marx’s project the most theoretically ambitious class-analytical framework. “It not only provides an explanation for inequality, it also points to an effective remedy: one must change the class relations that create exploitation.” Sørensen comprehends the essential point that property creates the opportunity for capitalists to exploit workers. Property as capital is the means of exploitation.

With the importance of property relations in mind, David Lane, writing in the pages of The Insurgent Sociologist, rejects the state capitalist argument. “The supposed ‘capitalist class’ is left with no proprietary rights.” Although state managers and administrators controlled Soviet production enterprises, they could neither dispose of their assets for their private good nor have their children receive any exclusive rights to nationalized property. Under the Soviet state, there was no identifiable group of persons that enjoyed a source of income derived from the ownership of property.” Moreover, Lane notes, such theories explicitly or implicitly privilege authority and control of the means of production over ownership. It is not just that they mix up the order of things—control substitutes for ownership in state capitalist theory. For Lane, such an approach, consistent with most bourgeois sociology, pays little attention to the scientific definition of social class.

Resnick and Wolff criticize state capitalist theorists who place too much emphasis on authority and control, but then fail to counter this one-sided conceptualization with a comprehensive definition of social class that includes property relations. Substituting exploitation for power without recognizing the historical property relations that stamp both with their specific class characteristic does not enhance the efficacy of state-capitalist theory. This problem is shown clearly when Resnick and Wolff criticize those historians who believe that the Veshenka was “marked by collective (rather than private) ownership of the means of production.” The authors are really indicating that the explanations with which they take issue are not those that founder on an abstract conception of power, but rather those that root power in property relations. The fact that the “board of directors” of a Soviet industrial ministry was answerable to the politburo instead of to shareholders is only irrelevant to Resnick and Wolff’s analysis because they ignore the role of property in social relations.

From the standpoint of a comprehensive conceptualization of social class, questions concerning the class character of a social system must take a different form. Were property relations in the Soviet Union like those that exist under capitalism? In a capitalist system, viewed from a historical-materialist perspective, we expect to find at least one class that privately owns and controls capital, extracts surplus value from workers in a wage-labor system, and realizes this value in a commercial market as profit. This class accumulates capital to strengthen its hold on society and increases the rate of exploitation to enrich itself. Similarly, we might ask whether collective ownership of the means of production in a society led by communists describes the Soviet Union.

In a socialist society, we would expect to find a communist party planning the economy with the goal of creating a level of productive capacity sufficient for raising social life onto a higher stage of human development. Resnick and Wolff avoid such falsifiable questions by denying the importance of property relations in determining social class and substituting an ahistorical conception of surplus labor extraction.

According to Parenti, socialist societies achieved a much greater degree of material equality than their capitalist counterparts. Soviet leaders organized the productive forces in the Soviet Union for the advancement of the proletariat, not for private enrichment or capital gain. Parenti notes that individuals could not hire other people and accumulate great personal wealth from their labor. The means of production were not privately held but were publicly owned. Human services were extensive and comprehensive. Soviet citizens were assured a minimal standard of economic survival and security, including guaranteed education, employment, housing, and medical assistance. It distorts Soviet history to suggest, as Resnick and Wolff do, that ministers were rewarded or behaved like capitalists and their managers in Western nations.

Parenti writes: “The perks enjoyed by Party and government elites were modest by Western corporate CEO standards, as were their personal incomes and life styles. Soviet leaders like Yuri Andropov and Leonid Brezhnev lived not in lavishly appointed mansions like the White House, but in relatively large apartments in a housing project near the Kremlin set aside for government leaders. They had limousines at their disposal (like most other heads of state) and access to large dachas where they entertained visiting dignitaries. But they had none of the immense personal wealth that most U.S. leaders possess.” 

What was true of relations internal to the Soviet Union—that there was a greater degree of equality in Russia than in capitalist countries—was true of external relations between Russia and its allied countries. The Soviet Union did not pursue capital penetration of other socialist countries. On the contrary, its allied countries uniformly benefited from their relationships with the Soviet Union. “Lacking a profit motive” as a motor force, writes Parenti, the USSR “did not expropriate the lands, labor, markets, and natural resources of weaker nations.” In other words, the USSR “did not practice economic imperialism.” Instead, it intended its interventions to facilitate the development of alternatives to capitalism in the periphery of the world system and to strengthen socialist governments against insurgency.

In contrast to those U.S. leftists who “say that the communist states offered nothing more than bureaucratic, one-party ‘state capitalism’ or some such thing,” writes Parenti, the Soviet Union “constituted something different from what existed in the profit-driven capitalist world.” Parenti acknowledges the fact that the Soviet Union had to expropriate the surplus produced by labor “to rebuild society and defend it from invasion and internal sabotage.” Again, this was as Marx said it would have to be after the abolition of the capitalist mode of production. As noted, because the Soviet Union faced threats to its existence both from the capitalist world encircling it and reactionary forces internal to it, Parenti characterizes its system as “siege socialism.”

Shirley Cereseto works, published in the Insurgent Sociologist, lends empirical weight to Parenti’s claims. Drawing on Marx’s theory that historically specific laws of motion govern social systems, Cereseto finds that the socialist world system rested on developmental principles fundamentally different from the capitalist world system. Under capitalism, the law of accumulation, because of its emphasis on profit maximization in the context of private property relations, inexorably leads to concentrated wealth and uneven development both in the internal structure of bourgeois societies and in the external relations among capitalist nations. Under “real, existing socialism,” the means of production were publicly owned and the imperative of profit maximization was abolished. Production was planned to meet basic human needs. The results were less inequality, falling poverty, greater economic security, and a higher quality of life. Moreover, these results occurred during periods of rapid economic growth. One should expect the opposite if capitalist laws were in operation. Cereseto concludes that “the new social formations” were “neither capitalist nor communist, but rather as being in the early stages of the long, arduous transition from one to the other.” These stages comprise what Marx called the “first phase of communist society,” which contains the deficiencies of the society from which they emerge. “They contain many other defects as well, some of which arise from errors made while traversing the yet uncharted, obstacle-laden path to communism,” writes Cereseto. “Yet, the data . . . clearly distinguish them from capitalist societies.”

Alex Dupuy and Barry Truchil mount a critique of state capitalist theory similar to Parenti’s. They contend that economic relations, such as commodity and labor markets, must be reckoned in terms of state ownership and control. Granting that the law of value continued to operate in the Soviet Union, Dupuy and Truchil argue that it was constrained by and subordinated to state economic planning. The surplus was used to achieve the goals of a socialist society, not for private enrichment. If by “commodity market” one understands a mechanism that regulates the operation of productive enterprises on the basis of supply and demand, then the Soviet Union cannot be said to have been a market economy.

Productive investments in the Soviet Union were decided on the basis of social need and not on the profitability of enterprises. As Marx predicted, where capitalistic forms of accounting were used, they were used “primarily as measures of efficiency and accountability,” serving “to modify and correct former planned projections.” The money form used for accounting purposes was not a source of accumulation. Indeed, because of state planning, Dupuy and Truchil contend the capital-goods sector had lost its commodity form. Moreover, wages served more as a rational means of distribution rather than a mechanism of exploitation.

The notion that state and party functionaries (apparatchiki) represented the functional equivalent of the capitalist class fails to differentiate accurately among various strata of the Soviet state, and to identify precisely which stratum corresponds to the capitalist class. It also fails to acknowledge the central reality that bureaucrats could not “accumulate wealth for their own private ends, viz., they [could not] accumulate wealth to purchase means of production or labor-power: the prerequisites for the existence of a capitalist class.” Directly contradicting one of Resnick and Wolff’s main contentions, Dupuy and Truchil emphasize the fact that the privileged position of state officials, which existed by “virtue of their position within the state apparatus,” did not “result from the retention of capitalist forms of distribution, i.e., the wage system and of commodity production in the consumer goods sectors.” 

Dupuy and Truchil writes: “In sum, the proponents of the state-capitalist thesis for describing the socialist countries have not demonstrated that capitalist relations of production indeed predominated in those societies. Their analyses start from a certain set of sociopolitical contradictions—namely the absence of workers’ control and the extant hierarchical social division of labor between state bureaucrats and workers. From these contradictions they then generate a theory of state capitalism by postulating the resurgence and dominance of capitalist relations of production, without ever demonstrating that this has occurred.

On the questions of the law of value, state planning, and the functional equivalency of the apparatchiki and the bourgeoisie, Dupuy and Truchil “maintain that these societies must still be considered socialist in character.” This conclusion is as relevant to the present critique of Class Theory and History as it was for those upon whom Dupuy and Truchil turned their critical eye.

Theorizing from the concrete totality is the foundation of the historical-materialist method. Marx argues in the Grundrisse that the categories of political economy become empty abstractions if conceptualization substantially removes determinant relations from concrete historical arrangements. One can only speak of production at a definite stage of social development—that is, as socially determined production. It is not the mere presence of private property or surplus appropriation that distinguishes social classes. Indeed, as Eric Olin Wright points out, the fact of property rights alone is insufficient for judging social class. For example, homeowners and the homeless would not constitute classes even though they are distinguished by property rights in housing since this division does not constitute a basis for the exploitation of the homeless by homeowners. It is rather the historically specific character of private property and the socially determined manner in which the surplus is appropriated and to what ends that surplus is put that shape the identity of the class structure. Capitalism is varied, and so therefore are the categories abstracted from its historical forms; but these categories, precisely because they are abstractions from the concrete, are not so malleable as to apply to radically different social formations. To accomplish this, one must evacuate their empirical contents in the manner of the functionalist. Resnick and Wolff’s conceptualization of social class conflicts with Marx’s method not so much in its attention to the question of social surplus as in its habit of improper abstraction and its denial of the centrality of concrete property relations. In sum, the framework of Class Theory and History is insufficiently discriminatory to support a claim that the Soviet Union was state capitalist and tightening up their method shows the falsity of their conclusion.

Ultimately, Class Theory and History feigns historical materialism, just as did Economics before it. Consider these representative statements: “The Soviet victories of collective over private property and of planning over markets altered how workers continued to be exploited [but] did not eliminate the worker’s exploitation” (page 91). “The personnel changed (no doubt a significant event), but the exploitative juxtaposition of producers vis-à-vis appropriators of surplus labor did not” (page 162). These statements exemplify the level of abstraction at which the authors operate. While such statements may be true on their face, they are irrelevant to the question the book poses, namely, was the Soviet Union a state-capitalist socia formation? Does anybody really argue that the Soviet Union was a communist society? Pre-capitalists societies were exploitative, as well. Were they capitalist? The appearance of historical materialism in the book is achieved through the appropriation of Marxian terminology in phrases such as, “the rate of surplus value appropriation (exploitation) inside state capitalist industry” (page 239). Surplus value, the form social surplus takes under capitalist relations, is thus “discovered” in various places in Soviet society. Each such discovery is prefixed with the term “state capitalist” to validate its alleged character. The practice of assuming what must be demonstrated cannot pass for Marxist class analysis.

Unlike those who avoid anti-Communist flak with such rationalizations as “the communist or socialist alternative to capitalism never prevailed,” Parenti confronts history, acknowledging that Communist countries suffered from major system deficiencies, while at the same time confirming the stubborn fact that socialism transformed desperately poor countries into modernized societies. 

To be sure, capitalism comes in many forms. Modern Sweden is different from Nazi Germany, and the U.S. system differs from either of these societies. Yet, these social formations—all capitalist—share in varying degrees the following features: capital is privately owned and controlled; commodity production is conducted primarily for exchange in markets and the generation of profit, not for personal use-values to be consumed by immediate producers; profits are reinvested to generate more profits for private individuals, not for generating public goods and services benefiting the whole population; a labor market exists wherein labor power is exchanged for wages under conditions of structural coercion; decisions concerning investment, production, and distribution are for the most part made by private entities not collectivities; the owners of capital and their managers ultimately control the labor process; the money-commodity is the near-universal medium of exchange; and the state and law are organized as the executive committee for the whole bourgeoisie. 

Returning to the Krugman-Wolff debate, in a 180-degree reversal, we see Wolff now defining social welfare under capitalism as “socialist,” whereas in his previous work fundamental socialist relations are defined as state capitalist. Were only those programs and systems that appeared as social welfarism in the Soviet Union socialist? Wolff rationalizes in the Democracy Now debate: “There is no agency, neither public nor private, that defines what a socialist is. If you follow the socialist movement for the last 150 years, you would discover that it has been a contested terrain from day one. There were different interpretations and different meanings.” Yet Wolff seems certain enough about the definition of socialism in previous writings as to determine that the Soviet Union was not socialist. To be sure, this was a crackpot definition. So why stick with it? Now Wolff defines socialism this way: “It’s the government having a big role in offsetting some of the awful qualities of capitalism.” If the Soviet Union was anything, it was this! But, of course, all of that is progressivism. Ironically, from his own assumptions, the United States fully decked out in social democracy would not be socialist. Yet Sanders, a social democrat, is a “socialist.”

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Andrew Austin

Andrew Austin is on the faculty of Democracy and Justice Studies and Sociology at the University of Wisconsin—Green Bay. He has published numerous articles, essays, and reviews in books, encyclopedia, journals, and newspapers.

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