Reply to a critique of the ICL (Spartacists)

 

An Essay by Michael Pröbsting, Revolutionary Communist International Tendency (RCIT), 22 September 2024, www.thecommunists.net

 

 

 

Contents

 

Introduction

 

Which class does the CPC serve?

 

“High growth” – in whose interest?

 

Do the Stalinists respect the right of private property?

 

Why do some Chinese capitalists leave the country?

 

Punishing individual “unruly” capitalists or the capitalist class?

 

Could the CPC expropriate the bourgeoisie if it would like to?

 

What makes a degenerated workers state a “workers state” – according to Trotsky and according to the ICL?

 

Can the transformation of social property relations take place under one and the same regime?

 

Is capitalist restoration possible in combination with economic growth?

 

The Stalinist state machine in face of political revolution and capitalist counterrevolution

 

Conclusions

 

 

Introduction

 

 

 

The International Communist League (Fourth Internationalist), usually called “Spartacists”, has published a substantial essay about the class character of China in the latest issue of their theoretical journal. This article contains both an outline of their analysis as well as a polemic against the views of other organisations, mainly the Grantites and the RCIT. Concretely, the ICL opposes our analysis of capitalist restoration in China and the role of the Stalinist regime in this. In the following article we want to reply to the critique of these comrades. [1]

 

Before doing so, we shall note that the ICL has certainly undergone a profound process of reorientation since 2021. Coming from an extreme sectarian and Stalinophile tradition, they have made, in certain areas, important steps to the left. They have got rid of their polemics in form of hysterical slander (for which they were notorious in the previous decades) and, more importantly, they made a number of progressive corrections on crucial political and theoretical issues (e.g. COVID Counterrevolution, national question, Permanent Revolution and Anti-Imperialist United Front Tactic). However, this process is clearly far from complete, and their analysis of China demonstrates that they are still trapped in their schematic and Stalinophile method.

 

Finally, we shall also express our gratitude to the ICL comrades for their international solidarity campaign which they have organized in defence of the author of these lines when he was brought to court and given a 6-month suspended sentence for alleged “support of terrorism” because of publicly expressing support for the Palestinian resistance. [2]

 

Basically, as the title of their essay already suggests, the ICL holds to its analysis that China is neither capitalist nor imperialist but still a deformed workers state: “… despite important capitalist penetration, China retains the basic features of a deformed workers state.” This has always been their organisations’ view irrespective of the fact that capitalist restoration took already place more than three decades ago. Still, the essay contains a new element which is both positive and negative. In the past, the comrades argued their case by claiming that China’s economy would still operate on the basis of post-capitalist property relations. Now, they no longer claim so – at least not explicitly (as it is indeed increasingly difficult to argue)! However, what is worse is that they now claim that China would be still a deformed workers state just because the Stalinist regime is still in power!

 

In the following we will not so much outline our analysis of Chinese capitalism since we did already publish a number of detailed studies on this issue in the past decade. ^[3] More recently, we published two essays in which we discussed i) the relationship between the ruling “Communist Party of China” and the new capitalist class as well as ii) the role of Stalinism in the process of capitalist restoration within the framework of the Marxist state theory. ^[4] We will therefore focus at this place on refuting the critique of the ICL and refer to our works when necessary.

 

 

 

Which class does the CPC serve?

 

 

 

While the ICL admits that there are a number of capitalists in China, it claims that they don’t constitute the ruling class but that rather “the CPC calls the shots”.

 

“Despite all the statistics that can be produced to show the prevalence of capitalist relations in China, the basic fact is that the capitalist class does not hold state power. The CPC calls the shots. The huge growth of capitalist relations in China is a product of the CPC having worked in alliance with capitalists over the past decades. This does not, however, mean that the CPC’s interests are the same as those of the capitalist class or that its policies are guided primarily by capitalist interests. Quite the contrary. The Communist Party bureaucracy continues to occupy an intermediary position navigating between the pressures of capital (foreign and domestic) and the working class. As such, it must wield the state apparatus against both these poles to maintain its position.”

 

This answer is wrong, and it tries to circumvent its contrast with reality by confusing two levels of abstraction. Saying “the capitalist class does not hold state power” does not make much sense because it is a key feature of capitalism that the bourgeoisie does not directly rule the state. In feudalism, the king was not only the political sovereign but also the largest landowner. However, capitalism is characterised by a distinct division of labour within the ruling class and a specific separation between the economic basis and the political superstructure.

 

Hence, political power is usually exercised by political parties and professional politicians – albeit it has happened in the last years that sometimes also big capitalists lead a state (like Trump, Rishi Sunak in Britain or Andrej Babiš in Czech Republic). It is such parties which exercise political power in the interests of the ruling class. Of course, such parties are usually linked with the bourgeoisie on all levels, directly and indirectly.

 

Ruling in the interest of the bourgeoisie is, by its very nature, a highly contradictory endeavour. First, the bourgeoisie is not a homogenous class and even its most powerful component – the monopoly capitalists – is often not united. Furthermore, political power does not exist withing a vacuum. Since the bourgeoisie is, numerically, only a very small class, it needs to create alliances with other classes resp. sectors of classes in order to put its power on a broader basis (middle class, labour aristocracy, sectors of the peasantry, etc.) Hence, the ruling party has to take into account, to a certain degree, also the wishes and interests of such layers. In addition to this, a government must also deal with foreign powers and, depending on its own strength, might be obliged to make more or less concessions to their demands.

 

As a result, it can happen, and indeed often happens, that a government makes decisions which runs against the wishes of the majority of the ruling class. Modern history is full of such examples – from the reduction of the working day in late 19^th century, against the wishes of most capitalists, in order to improve the health of young workers (and hence their fitness to serve in the army); various decisions of bonapartist rulers to start wars (which also results in disruption of business); Trump’s trade war against China (and many other decisions of his Administration) were despised by most monopoly capitalists; most German corporations prefer to have “free trade” with China in order to access its market, many European capitalists would rather have continued doing business with Russia after Western powers imposed sanctions in February 2022, etc. Another, very recent, example has been the decision of governments all over the world in spring 2020, to shut down business and, in fact, the whole society via the authoritarian Lockdown policy during the COVID Counterrevolution. [5]

 

Such a relative separation between the ruling class and the state executive is even more pronounced in periods of instability in which governments with bonapartist tendencies or even outright bonapartist regimes prevail.

 

In short, the capitalist class does never rule directly but rather indirectly, via one or several parties (or leaders) with which they are, in one way or another, linked and which, in one way or another, objectively serve their class interests.

 

Hence, when the ICL answers us that it is not the capitalist class which rules but rather the Stalinist CPC, they only circumvent the issue. The question is rather: in the interest of which class does the CPC rule? And this question is not so difficult to answer: the ruling Stalinist party serves the interests of the Chinese bourgeoisie since it is this class which has gained most from the CPC pro-market policy in the last three decades.

 

 

 

“High growth” – in whose interest?

 

 

 

The ICL claims that China has experienced “a process of high growth” taking place “in the context of general social progress”. But Marxists don’t view “growth” without analysing whose growth, which class gains primarily from such economic growth? The comrades like to point out that new cities, new “bullet trains”, etc. were built. True. But this has been the result of capitalist growth in many parts of the world in the past century. At its beginning, individual transport was mostly via horses, then came cars, and later many families in Western countries had at least one. At the beginning, aeroplane hardly existed, and later Western people travelled with such to their holiday destination, and some were sent to the moon with rockets (and in a few years they might even fly to Mars). Think about the introduction of refrigerators, radio, TV, etc. When I was young, computer, internet and mobile phones did not exist. Today, one is a misfit in rich societies without such “vital consumer goods”. But does all that negate the fact that such economic growth and technological progress was capitalist growth and capitalist progress and that it, first and foremost, served the interests of the bourgeoisie?! Certainly not! (Let’s leave aside at this point that not all developments of productive forces represent progress for humanity!)

 

As we have demonstrated in our above-mentioned studies in much detail, the CPC has created a powerful capitalist class including a huge monopoly bourgeoisie (as their global leading position with the numerous billionaires and corporations shows). It created a broad middle class and a labour aristocracy – two layers on which the ruling class has consolidated its power in the past three decades.

 

This development is, by the way, in stark contrast to periods of high growth in degenerated workers states (e.g. in the USSR after 1929 or in Eastern Europe in the 1950s and 1960s). In these cases, such economic progress did not result in the creation of a broad capitalist class.

 

It remains a stubborn fact that China’s economic growth in the past three decades was growth which, first and foremost, served the interests of the capitalist class and its domination of the society. It served their interests to increase the exploitation of the working class. Hence, the CPC served the interests of the new bourgeoisie and not that of the working class.

 

Marx stated in his Theses on Feuerbach that truth must be proven in reality, otherwise it is scholastic thinking. “Man must prove the truth — i.e. the reality and power, the this-sidedness of his thinking in practice. The dispute over the reality or non-reality of thinking that is isolated from practice is a purely scholastic question.” ^[6]

 

If the ICL wants to understand the nature of the CPC regime, it must check concretely with which class has the CPC aligned itself. It must study concretely China’s social and economic development of the past three decades and check which class did gain most of it. The comrades do not comprehend the Stalinist-capitalist character of the regime because they have failed to undertake such a concrete analysis of China’s socio-economic development. In the end, comrades, the truth is always concrete as Hegel liked to say.

 

 

 

Do the Stalinists respect the right of private property?

 

 

 

While the ICL can not and does not deny the existence of a broad capitalist class, it relativises their relevance by claiming that they have to live under the CPC's thumb with their right of private property under the sword of Damocles.

 

“A basic criterion of private property rights is the ability to dispose freely of the property one possesses. That is the whole point of the property being private. The question is, do capitalists in China control their assets? Yes…but only if they use them in a way that corresponds to the wishes of the CPC.“

 

To underline their thesis, they refer to the restructuring of Jack Ma’s Ant Group in the last years and an incident in 2004 where the ownership of the Haier corporation switched from private to state-owned (and later back). Furthermore, they claim that China’s capitalists – in contrast to other countries – fear and try to flee the “deformed workers state”:

 

“The different class basis of these three regimes can be further seen by looking at the behavior of capitalists toward them. Despite the tyranny of MBS, millionaires and billionaires flock to Saudi Arabia like moths to a flame. In Russia, the outbreak of the war in Ukraine and Western sanctions led to the departure of a significant number of wealthy individuals. However, as a whole the oligarchs have rallied around the regime. Since 2022, billionaires have repatriated at least 50 billion dollars in foreign assets to Russia. This is because the regime is a dependable pillar of support in the face of Western hostility.

 

In China, we see the exact opposite. Capitalists fear the regime more than the West, where they emigrate in droves when given the chance. Every year, China tops the list of countries that capitalists leave, even though the regime strictly limits such emigration. According to the Henley & Partners consultancy, the number of high-net-worth individuals leaving China has increased every year since the end of the pandemic, hitting a record 15,200 so far in 2024. In Mao and Markets (2022), Christopher Marquis and Kunyuan Qiao claim that “more than a quarter of China’s entrepreneurs have left the country since they became rich, and reports suggest that almost half of those remaining are thinking about doing so.” Why would this be the case if the CPC were fundamentally committed to defending the interests of the capitalists in China? Why do capitalists in other dictatorships not fear their government in such a way?”

 

Let us answer these arguments step by step. The case of the restructuring of Jack Ma’s Ant Group is not an example of “anti-capitalist” intervention by the CPC but rather a state-capitalist intervention to avoid structural problems for Chinese capitalism. A Hongkong analyst noted on this event:

 

“Ma relinquished his control of Ant Group, reducing his voting rights from 50 percent to a modest 6 percent. The restructuring ensured that no single shareholder could exert sole or joint control over the fintech giant, and the board will include an additional independent director. This corporate overhaul was completed by the end of 2023, with the People’s Bank of China now listing Alipay as a firm without an actual controller. Undoubtedly aimed at diluting Ma’s influence, these changes were touted by the government as steps toward improving transparency and accountability in corporate governance. The regulators’ stance is not without merit. As past financial scandals involving the likes of Tomorrow Group and An Bang demonstrate, companies with large shareholders and opaque corporate governance structures are ripe for misconduct. Given Ant’s magnitude and reach, Chinese regulators are rightly concerned about the potential fallout if the financial giant is mismanaged.” [7]

 

Such interventions take place when governments believe that a specific monopoly could endanger the capitalist system as a whole. To name just one famous example, we refer to Rockefeller’s Standard Oil – the then largest corporation in the U.S. – which was ordered by an American court to break up its holdings in 1911.

 

It is true that Jack Ma lost most of his voting rights in this corporation, but he was certainly not expropriated! According to the current ranking by the Bloomberg Billionaires Index, Ma has a net worth of $ 33.8 billion and he is the sixth-wealthiest person in China as well as the 51^st wealthiest person in the world. [8]

 

We can not say much about the case of Haier to which the ICL refers. At this point, we have to note that, in general, the comrades are rather shy to substantiate their theses with facts and if they do so, they are even more diffident to provide exact sources. This makes it a challenge to check their arguments.

 

Anyway, Haier is one of the famous examples of a “communist” corporation which has become a highly profitable business leader in global markets for consumer electronics (it has entered the Fortune's Global 500 list). Zhang Ruimin was its chairman from 1984 until his retirement in 2021. Representing the fusion of Stalinism and capitalism, Zhang has been a long-time member of CPC (he even joined the Central Committee in 2002, i.e. at a time when the supposed conflict, to which the ICL refers, should have happened). Simultaneously, he got praise from Western media and institutions: the Financial Times called him as one of the "50 most respected business leaders in the world" and he was the first Chinese business leader to speak on the Harvard podium in 1998. Mainstream sources do not report about any major conflict between the corporation and the regime in its history. [9]

 

 

 

Why do some Chinese capitalists leave the country?

 

 

 

On the ICL’s claim that Chinese capitalists fear the party and want to flee the country. The comrades completely misjudge these facts. Yes, a number of Chinese capitalists have left the country. The statement from the book Mao and Markets that “a quarter of China’s entrepreneurs have left the country” is based on a survey which was conducted in 2011. [10] We can not judge the conditions how this survey originated at that time – did some private business groups in China try to pressurise the regime?

 

Anyway, facts have to be seen in proportion. 15,200 “high-net-worth individuals” left China so far in 2024. But China has – after the U.S. – the second-largest bourgeoisie in the world in absolute numbers (6,190,000). ^[11] According to the same study by the Henley & Partners consultancy, 9,500 millionaires left Britain, 4,300 India, 1,200 South Korea and 1,000 Russia in the same period. If we take into account that China’s number of millionaires is larger than the combined figure of these other countries (which are certainly capitalist, even by the ICL’s standards), one can conclude that proportionally more capitalists have left these countries than China. Hence, the outflow of a certain number of millionaires does not reflect pressure by an anti-capitalist regime but rather unfavourable conditions for specific groups of capitalists like the difficulties which China’s economy has experienced since the pandemic, pressure from other sectors of the bourgeoise, or a stricter state-capitalist control. [12]

 

One Chinese analyst who gave voice to the concerns of those capitalists considering emigration (in the above-mentioned 2011 survey) said that many of these suffer from bureaucratic challenges and lack of loans for smaller entrepreneurs. “China's financial system essentially only supports state-owned enterprises and large enterprises. For private enterprises and small and medium-sized enterprises there exist difficulties in financing: it's difficult to get loans, and even more difficult to go public or issue bonds.” [13]

 

Another article published at that time complained about the competitive advantage for those capitalists with close relations to the CPC compared to those without such. “The princelings, descendents of former leaders of the People’s Republic, will surely use their new political clout to consolidate their grip on the economy. This means, among other things, that others, especially owners of private domestic enterprises, will have even fewer opportunities than they do today.” [14]

 

These are not unusual conditions for capitalists who are living in countries with a bonapartist regime. But this does not mean at all that the regime would be “anti-capitalist” in any way. We recall that numerous oligarchs and millionaires have left Putin’s Russia (or also Ukraine, by the way). Or think about the disadvantageous conditions for capitalists in Nazi Germany or fascist Italy who were not close to the regime.

 

If we judge the class character of a given regime, we must not look at the fate of individual capitalists but at the development of the capitalist class as a whole. It is a fundamental fact that China has seen a permanent expansion of the capitalist class for three decades. As we did show in our recent study, there has been a process of massive concentration of wealth in the hand of the bourgeoisie since the early 1990s. Today, such a concentration – the top 1% own 30.5% of private wealth – is higher than the share in Western Europe (22%) and is getting close to that of the United States (35%).

 

Furthermore, thanks to the business-friendly policy of the Stalinist-capitalist CPC regime, the super-rich face a lax tax regime. ”[P]ersonal income tax only contributes about 6.5 percent of China’s total tax revenue and is mostly borne by the middle class. Because they earn most of their income through investments, many of China’s ultra- rich are hardly affected by income taxes. Although reforming this tax system could potentially improve equality, it presents significant political hurdles. At present, the Chinese government relies heavily on indirect taxes, such as the value-added tax, rather than direct taxation in the form of personal income tax. As Changdong Zhang observes, increases in direct taxation can increase citizens’ tax consciousness, which could in turn generate social discontent and hurt the legitimacy of the CCP. Moreover, many of China’s ultra-rich hold the vast majority of their wealth not as individuals, but rather through offshore entities located in tax havens. Unless the offshore entities distribute wealth to the tech bosses and their families, these assets are technically not subject to Chinese taxes.” ^[15]

 

In short, if the CPC would really make life difficult for capitalists so that they would have to fear the regime, how on earth could it be possible that China’s number of billionaires, corporations and wealth concentration has grown so massively since years and decades?! Obviously, the majority of China’s capitalists is doing pretty well under the Stalinist regime!

 

 

 

Punishing individual “unruly” capitalists or the capitalist class?

 

 

 

This does not mean that the ICL claims about the persecution of some capitalists are completely baseless. But these cases must be understood in their true meaning. Yes, it is correct that the regime can and does persecute capitalists and bureaucrats who it considers as a danger to their political regime or to the interests of economic growth. But what the ICL wrongly characterizes as an anti-capitalist regime of a “deformed workers state”, is rather a state-capitalist bonapartist regime.

 

As we did elaborate in our works on China, the CPC has built a relatively strong bonapartist regime – also strong vis-à-vis individual capitalists and the bourgeoisie as a whole. One must not forget that China’s capitalist class is a relatively new class, lacking long-term historic roots (except in Hongkong and Macao). In addition, because of its history it is closely aligned with the state bureaucracy. Similar to other bonapartist regimes (think about Putin or Mohammed bin Salman in Saudi Arabia), the CPC has a strategic vision of developing China which it wants to become the world’s leading Great Power.

 

As mentioned above, the ICL says: “The question is, do capitalists in China control their assets? Yes…but only if they use them in a way that corresponds to the wishes of the CPC.” Now, as we have shown in our works, the capitalists own their property, can hand it down to their children, can invest the money and/or stash it in some tax havens abroad. Yes, it is true that there have been situations where capitalists publicly opposed the plans of the regime or where the regime did fear the business plans of this or that corporation.

 

But such an approach is not unique and, as we noted in a recently published essay, we have seen similar intervention in other countries. Putin expropriated and arrested several “unruly” oligarchs, Mohammed bin Salman purged some members of his royal family and in Thailand, the military overthrew and persecuted the billionaire and Prime Minister Thaksin Shinawatra, in 2006 (and later also his sister). Fascist regimes did also suppress capitalists from ethnic minorities or political opponents. In short, such an approach is a feature of capitalist-Bonapartist regimes and does not reflect any anti-capitalist bias.

 

The ICL is aware of this but claims that the case of China is different because, in contrast to the Putin and the MbS regime, the CPC came to power in 1949 by “crushing the capitalist class.” “In both those cases [Russia and Saudi Arabia, Ed.], bonapartist measures of repression served to uphold the stability of the capitalist regimes. In China, the bonapartist character of the regime is very different. After 1949, the CPC’s power was built on bureaucratic control over a workers state which crushed the capitalist class.”

 

 

 

Could the CPC expropriate the bourgeoisie if it would like to?

 

 

 

The approach of the ICL is undialectical and unhistoric. Yes, the CPC “crushed the capitalist class.” But, first, this was more than ¾ of a century ago and the CPC has massively changed its character since then! As we did also demonstrate with many figures and examples, the Stalinist party has substantially changed its social composition in the past three decades. It is no longer merely a party of state bureaucrats and the labour aristocracy – as it was in the period of the deformed workers state in 1952-92. It has become a party with a majority of members from the bourgeoisie, petty-bourgeoisie and middle class. Many bureaucrats have either become capitalists themselves or members of their families have (the so-called “Princelings”). As we have shown, these are not isolated cases but rather a widespread phenomenon including all top bureaucrats – from the family of the late Deng Xiaoping and subsequent party leaders down to regional and local leaderships. In other words, the party bureaucracy has fused with sectors of the bourgeoise. Consequently, the CPC of the early 21^st century is very different from the party in 1949 which was based on radical poor peasants and workers! ^[16]

 

Furthermore, the ICL comrades forget the class nature of the Stalinist bureaucracy resp. its consequences. They admit in their essay that this bureaucracy has a petty-bourgeois character. But what are the consequences of this? It is that such a bureaucracy can serve different masters. The history of the CPC shows this very clearly. The original CPC, founded in 1921, was a revolutionary force orientated to the working class. It later became an instrument of Maoist bureaucracy, based mainly on peasants and closely aligned with the Kremlin. When it came to power in 1949, it had not intention to “crush the capitalist class” but rather wanted to collaborate with it under the disguise of “New Democracy”. However, the enormous pressure of the masses, the sabotage of the capitalists and the pressure of the Cold War (Korea War!) forced the CPC to go further than they wanted, and they subsequently expropriated the bourgeoisie in the following years. This again transformed the CPC as it was less dependent on radicalized peasants and workers but had a huge bureaucratic apparatus, based on the new deformed workers state, at its source.

 

And when the regime was in a cul-de-sac in the 1970s and in the late 1980s, it was again forced to make major turns. It consolidated the regime after the death of Mao in 1976 and opened a pro-market period. And when the social contradictions accelerated dramatically in the late 1980s, it first crushed the workers and student uprising on Tiananmen Square and then began the restoration of capitalism.

 

Hence, the history of the CPC (as well as many other Stalinist parties) shows that the bureaucracy is not bound to a degenerated workers state but – depending on the respective conditions, pressure of different classes, etc. – can serve this or that master. So, after collaborating with the Chinese bourgeoisie in the 1930s and 1940s, it crushed the capitalist class in 1952. But then it “crushed” the working class, massacred it in 1989, and reestablished its collaboration with the bourgeoisie.

 

“Crushing the capitalist class” under specific circumstances does not transform a party into an anti-capitalist force forever. As history has shown, even petty-bourgeois, non-proletarian parties can – under massive pressure from other classes – move forward to “crush the capitalist class” (e.g. the Castroite M-26 movement in Cuba or the Left Social-Revolutionaries in Russia in 1917-18).

 

Hence, it is absolute nonsense when the comrades claim: “To attack the capitalists’ fundamental interests would be contrary to the very nature of the regime. This is not the case with the CPC. Under sufficient external and internal pressure, it could expropriate the capitalist class.”

 

This statement is wrong not only because history of the last three decades has demonstrated exactly the opposite – that it is promoting and enriching the bourgeoise. More importantly, the CPC bureaucracy can not expropriate the capitalist class because it would mean that it would expropriate itself! And history shows that a propertied class has never expropriated itself.

 

Three years ago, the Harvard Business Review published an interesting interview with Weijian Shan, a Chinese capitalist who worked for the World Bank and J.P. Morgan and who is now the CEO of the Hong Kong-based $40 billion private-equity firm. The journal’s Editor in Chief asked him: “What is it that Americans don’t understand about China?”, to which Shan replied: “They don’t know how capitalist China is. China’s rapid economic growth is the result of its embrace of a market economy and private enterprise. China is among the most open markets in the world: It is the largest trading nation and also the largest recipient of foreign direct investment, surpassing the United States in 2020.” ^[17]

 

It seems that it is not only “Americans” who “don’t know how capitalist China is” but also the comrades of the ICL!

 

 

 

What makes a degenerated workers state a “workers state” – according to Trotsky and according to the ICL?

 

 

 

This leads us to another related difference with the ICL – their analysis of the Stalinist bureaucracy and the degenerated workers states. As we mentioned at the beginning, the ICL does not dispute so much our analysis of the capitalist character of the Chinese economy. But they consider it as a form of “dictatorship of the proletariat” because the Stalinist party with its army is still in power. Replying to our arguments, they write:

 

“While it is correct that the Stalinist bureaucracy has a petty-bourgeois character, it is absolutely wrong to say that the state machine it commands is “not a proletarian instrument.” This revisionist view amounts to rejecting the very definition of a workers state. In The State and Revolution, Lenin explained:

 

“Like all great revolutionary thinkers, Engels tries to draw the attention of the class-conscious workers to what prevailing philistinism regards as least worthy of attention, as the most habitual thing, hallowed by prejudices that are not only deep-rooted but, one might say, petrified. A standing army and police are the chief instruments of state power.”

 

The “chief instruments of state power” of the dictatorship of the proletariat in China are a “standing army and police,” just as for every other class dictatorship—slavocracy, feudal or capitalist. In a workers state that is bureaucratically deformed, these “bodies of armed men” are wielded against the political interests of the working class by the bureaucracy, but they remain organs of a workers state.”

 

This is wrong from the beginning to the end. First, the ICL approaches a degenerated workers state as a homogenous phenomenon. For them, the regime, the state apparatus and the economy all have the same character – they are institutions of the “dictatorship of the proletariat”. However, a degenerated workers state is a highly contradictory phenomenon exactly because of the contradictions between economic basis and the political superstructure.

 

For Trotsky, it was not the bureaucracy and its state machine which made the USSR a workers state. It was rather the social character of its economic basis. Such he wrote in 1936 in The Revolution Betrayed:

 

“Classes are characterized by their position in the social system of economy, and primarily by their relation to the means of production. In civilized societies, property relations are validated by laws. The nationalization of the land, the means of industrial production, transport and exchange, together with the monopoly of foreign trade, constitute the basis of the Soviet social structure. Through these relations, established by the proletarian revolution, the nature of the Soviet Union as a proletarian state is for us basically defined.

 

In its intermediary and regulating function, its concern to maintain social ranks, and its exploitation of the state apparatus for personal goals, the Soviet bureaucracy is similar to every other bureaucracy, especially the fascist. But it is also in a vast way different. In no other regime has a bureaucracy ever achieved such a degree of independence from the dominating class. In bourgeois society, the bureaucracy represents the interests of a possessing and educated class, which has at its disposal innumerable means of everyday control over its administration of affairs. The Soviet bureaucracy has risen above a class which is hardly emerging from destitution and darkness, and has no tradition of dominion or command. Whereas the fascists, when they find themselves in power, are united with the big bourgeoisie by bonds of common interest, friendship, marriage, etc., the Soviet bureaucracy takes on bourgeois customs without having beside it a national bourgeoisie. In this sense we cannot deny that it is something more than a bureaucracy. It is in the full sense of the word the sole privileged and commanding stratum in the Soviet society.

 

Another difference is no less important. The Soviet bureaucracy has expropriated the proletariat politically in order by methods of its own to defend the social conquests. But the very fact of its appropriation of political power in a country where the principal means of production are in the hands of the state, creates a new and hitherto unknown relation between the bureaucracy and the riches of the nation. The means of production belong to the state. But the state, so to speak, “belongs” to the bureaucracy. If these as yet wholly new relations should solidify, become the norm and be legalized, whether with or without resistance from the workers, they would, in the long run, lead to a complete liquidation of the social conquests of the proletarian revolution. But to speak of that now is at least premature. The proletariat has not yet said its last word. The bureaucracy has not yet created social supports for its dominion in the form of special types of property. It is compelled to defend state property as the source of its power and its income. In this aspect of its activity it still remains a weapon of proletarian dictatorship.” ^[18]

 

This quote from Trotsky’s main work on the Stalinist state shows very clearly the meaning of his concept of a degenerated workers state. The USSR was a still a workers state exclusively because of the social character of its economic basis. It is “the nationalization of the land, the means of industrial production, transport and exchange, together with the monopoly of foreign trade” which lend the state such a character. It is “through these relations, the nature of the Soviet Union as a proletarian state is for us basically defined.”

 

The Stalinist bureaucracy and its state apparatus are, in essence, anti-proletarian as it oppresses the working class. This is why Trotsky said that the “society’s socialist base” must be freed “from its bourgeois-bureaucratic and Bonapartist superstructure”.

 

“[T]he process of bourgeois degeneration among the leaders of Soviet society has gone a long way. At the same time they show that the further development of Soviet society is unthinkable without freeing that society’s socialist base from its bourgeois-bureaucratic and Bonapartist superstructure” ^[19]

 

The Stalinist state apparatus “remains a weapon of proletarian dictatorship” only insofar as it actively defends the post-capitalist property relations. Trotsky repeated this statement in a number of works. In his debate with the opponents in the U.S. section of the Fourth International, who did not understand the contradictory nature of the political superstructure and the economic basis, Trotsky wrote:

 

“[I]f the bureaucracy becomes ever more powerful, authoritative, privileged, and conservative, this means that in the workers’ state the bourgeois tendencies grow at the expense of the socialist; in other words, that inner contradiction which to a certain degree is lodged in the workers’ state from the first days of its rise does not diminish, as the “norm” demands, but increases. However, so long as that contradiction has not passed from the sphere of distribution into the sphere of production, and has not blown up nationalized property and planned economy, the state remains a workers’ state.” ^[20]

 

It is because of such an analysis of the Stalinist state apparatus that Trotsky said that the political revolution of the working class would have to purge many more bureaucrats than a capitalist counterrevolution.

 

The ICL considers it as an unresolvable contradiction to characterize, on one hand, the Stalinist state apparatus as a “bourgeois-bureaucratic and Bonapartist superstructure” and, on the other hand, to say that it was “a weapon of proletarian dictatorship” insofar as it defended the USSR against counterrevolution. But, as we explained in our above-mentioned essay on the Marxist state theory, history has seen such contradictory phenomena already before. Think about the feudal state apparatus in various European monarchies in the 19^th century which enhanced the creation of capitalist property relations and a bourgeois class.

 

Hence, the Stalinist bureaucracy “remains a weapon of proletarian dictatorship” only if and insofar as it defends the post-capitalist property relations. When it does no longer defend the proletarian relations of productions, it is no longer “a weapon of proletarian dictatorship” but rather a weapon of capitalist dictatorship.

 

And this is exactly what has happened in China in the past three decades. The CPC has systematically destroyed the social conquests of the workers state, privatised large sectors of the economy, imposed the law of value in state-owned enterprises and created a broad capitalist class.

 

The ICL objects against our analysis: “To establish the class character of China, the key criterion is not the degree to which market relations or the planned economy prevail, although these are certainly important factors. Rather, it is whether there has been a qualitative change in the nature and function of the state apparatus.”

 

But the fact that the CPC regime implemented a capitalist transformation of the economy – after crushing the working class in June 1989 – shows that there has been such a “qualitative change in the nature and function of the state apparatus.” The ICL does not recognise this fact because it has a wrong analysis of the nature of the Stalinist bureaucracy in degenerated workers states and because it has no analysis of the social character of the Chinese economy.

 

 

 

Can the transformation of social property relations take place under one and the same regime?

 

 

 

The ICL strongly rejects our analysis that the CPC itself implemented the restoration of capitalism.

 

“In a different way, the various socialists claiming that China is capitalist make the same mistake. Instead of positing that capitalism and socialism can cohabit as the CPC does, they argue that there was a gradual and seamless transition from China being a workers state after 1949 to being a capitalist state in the 1990s. According to them, this transition took place without a period of acute crisis in which the state structure of the PRC was broken up and replaced by a new one. In other words, they think that the same state apparatus, the same bureaucracy and same regime can defend the dictatorship of two antagonistic classes.”

 

This argument is wrong in two respects. First, it ignores the historical experience that indeed one and the same regime can implement the transformation of social property relations. In our essay about the Marxist state theory, we provided a number of cases for such developments – the Byzantine Empire in the period of transition from slave-holder society to feudalism or various European monarchies in the period from feudalism to capitalism, to name only two of these examples. ^[21]

 

Secondly, as we pointed out above, the ICL also ignores the fact that the Stalinist bureaucracy has always been a class-alien element within the workers state. This is why Trotskyists speak about “degenerated workers states”! If that is not the case, what would be social contradiction within degenerated workers states?!

 

 

 

Is capitalist restoration possible in combination with economic growth?

 

 

 

Another argument of the ICL is that the developments in China can not have been a restoration of capitalism since this process went hand-in-hand with spectacular growth – in contrast to the experience in Russia and Eastern Europe.

 

“In China, however, we see the total opposite. The 1990s saw the most astounding development of productive forces in history, an unrivaled reduction in poverty and a general improvement in socio-economic indicators. (…) In Russia, inequalities exploded and billionaires emerged in the context of general social decline. In China, this process happened in the context of general social progress. In the first case, we have a rotting society being pillaged by foreign capital and oligarchs. In the other, we have capitalists and bureaucrats taking a disproportionate share in a rapidly developing society. In both cases, the Gini coefficient rises, but this occurs through fundamentally different social processes—counterrevolution on one side, on the other high growth based on fusing foreign capital with economic state control.”

 

Obviously, it is true that the process of capitalist restoration in Russia and in China had very different consequences for the economy. Collapse in one case, spectacular growth in the other. However, one has to look at these developments more concretely.

 

First, one must not forget that the capitalist restoration process had also many negative consequences for the Chinese working class. Today, nearly 20% of China's youth is unemployed. The workers lost their “iron rice bowl”, i.e. job security with all the consequences for social and health insurances, etc. As we did show in much detail, millions of workers lost their jobs in state-owned enterprises and those who could stay had to work under worse conditions. It is this process – as well as the liberalisation of the agricultural sector – which created a huge “class” of so-called “migrant workers”, i.e. those hundreds of million workers who are forced to look for a job in other provinces without basic social rights.

 

Second, true, China experienced a period of spectacular economic growth. But was it growth of a proletarian, post-capitalist state-economy? Or was it rather growth of the rapidly expanding capitalist sector? Obviously, the latter has been the case. As a result, China’s monopoly capitalists are among the leading in the world (number of global billionaires, top corporations, etc.). Or do the ICL comrades want to claim that China’s long-term growth would reflect the expansion of a “socialist sector” of the deformed workers state? If yes, we are curious to learn more about such an explanation! (But for this, the comrades would first need to elaborate a concrete analysis of China’s economy!)

 

Third, while China’s long-term growth is indeed spectacular, such a development is not unique. As we did show somewhere else, other capitalist countries have experienced similar periods of long-term economic growth in the second half of the 20^th century (e.g. Japan, South Korea, Taiwan). [22]

 

What is the reason for China’s economic success? As we explained in our works, it is, basically, the combination of several factors: the subjugation of the working class and the successful exploitation of huge surplus value; the process of primitive accumulation in a big country with a large peasantry (i.e. a large potential market); the opening of the capitalist world market in combination with the influx of large foreign investments; and the continuing existence of a strong state-capitalist and bonapartist regime which ensured stable conditions of capitalist super-exploitation.

 

 

 

The Stalinist state machine in face of political revolution and capitalist counterrevolution

 

 

 

The ICL’s theoretical mistakes about the nature of Stalinism confuse them also when it comes to the nature of the political revolution and capitalist counterrevolution. Such they write:

 

“What the Tiananmen events showed is that under the impulse of the proletariat, the state apparatus itself started to waver, with whole battalions of the PLA, including top commanders, refusing orders. In the face of strong social conflict, the Stalinist bureaucracy is suspended in midair and starts to disintegrate. The various outbreaks of political revolutions, whether in China, the DDR or Hungary, all show that a working-class uprising in a deformed workers state has a real possibility of bringing over to its side the bulk of the state apparatus. This outcome in China would render the expropriation of capitalists a simple administrative affair. Such a fracture of the state is impossible in any capitalist country and is a key distinguishing factor between a political and a social revolution.”

 

It is certainly true that in the process of political revolutions, it was possible to bring elements of the state apparatus over to the side of the insurrectional workers. But this was not something unique about the Stalinist state apparatus – it is rather in the nature of all revolutionary processes. The February Revolution in Russia 1917, the revolutions in Germany 1918, China 1925-27, Iran 1979, the Arab Revolution 2011, etc. – in all these events did soldiers change the side.

 

As the ICL does not recognize the “bourgeois-bureaucratic and Bonapartist superstructure”, it ignores the fact that the Stalinist state machine did not disintegrate in the political revolutions 1953, 1956, 1968, 1980/81 and 1989. In every single case did the bureaucracy succeed in violently crushing these workers uprisings.

 

In contrast, the Stalinist state machine did disintegrate in the face capitalist counterrevolution as we saw in Eastern Europe and the USSR 1989-91! And in those cases where it did not disintegrate, it carried out the capitalist counterrevolution itself!

 

If the Stalinist bureaucracy would have been a “weapon of proletarian dictatorship” by its nature – and not only temporary under specific conditions – why did it always resist the working class but not the capitalists?!

 

It is because of such a theoretical confusion that the Spartacists were surprised by the peaceful capitalist counterrevolution in 1989-91 and this is why they still hope that the Chinese bureaucrats would do better than their loser colleagues in Europe. [23]

 

The coming Chinese revolution will possess a proletarian and social character. It will have to smash the Stalinist-capitalist state apparatus and to expropriate the bourgeoisie. The ICL wrongly hopes that large sectors of the Stalinist state apparatus will join the working class in a revolutionary crisis. In fact, the proletariat will face both the CPC bureaucrats as well as the capitalists as enemies. The task of Trotskyists is to prepare the working class for such a crisis and to build a revolutionary combat party which can intervene in the coming class battles.

 

 

 

Conclusions

 

 

 

Let us finally summarise the main differences between the RCIT and the ICL on the Stalinist regime in China and its role in the capitalist restoration in the past three decades.

 

1.           The ICL rejects our analysis that capitalist restoration has taken place in China in the 1990s because this process has taken place under the continuous rule of the Stalinist regime. They consider this as impossible and in contradiction to the Marxist state theory. Why? Because they think that the Stalinist bureaucracy is a proletarian force which is, by its very nature, hostile to and incompatible with capitalism.

 

2.           The ICL ignores that the Stalinist bureaucracy in the degenerated workers states has always been a class-alien element. They do not recognize the deeply contradictory character of such degenerated workers states, and that this contradiction was based in the relationship between the nature of its economic basis and its political superstructure. Since they view the Stalinist state apparatus as proletarian, they think it could not survive the capitalist transformation of the property relations. They forget that the Stalinist bureaucracy also collaborated with the bourgeoisie before as well as after the creation of workers states.

 

3.           They think that the fact that the Stalinist bureaucracy was forced to defend the post-capitalist features of the degenerated workers states (in order to keep their positions and privileges) would mean that the Stalinist regime itself was a feature of the “dictatorship of the proletariat”. In reality, the features of the “dictatorship of the proletariat” were not the bureaucratic-bonapartist state apparatus but rather the socio-economic achievement – the nationalized property, planned economy, state foreign trade monopoly, etc.

 

4.           They believe that one and the same regime can not initiate the transformation from one set of property relations to another. In fact, this is possible and there exist a number of historical examples for such.

 

5.           Trapped in such dogmatic thinking, the ICL ignores the all too obvious fact that, in the past three decades, the CPC has served the creation of a broad capitalist class which plays a leading role in the world market. The party and state bureaucracy has not only served this class but also fused with it.

 

6.           The coming proletarian social revolution in China will have to smash the Stalinist-capitalist state apparatus and to expropriate the bourgeoisie. The ICL wrongly hopes that large sectors of the Stalinist state apparatus will join the working class in a revolutionary crisis. In fact, the proletariat will face both the CPC bureaucrats as well as the capitalists as enemies. The task of Trotskyists is to prepare the working class for such a crisis and to build a revolutionary combat party which can intervene in the coming class battles. In order to play a role in this process, the ICL will have to get rid of their old schematic and Stalinophile dogmas.