ERNEST Contents M A N D E L Introduction 1 Bureaucracy and Commodity Production 11 Organization and the Usurpation of Power 59 Substitutionism and Realpolitik: The Politics of Labour Bureaucracies 103 Administration and Profit Realization: The Growth of Bourgeois Bureaucracies 153 Self-administration, Abundance and the Withering Away of Bureaucracy 195 Introduction I The death agony of the bureaucratic regimes in Eastern Europe, together with the break-up of the Soviet Union, have posed in the sharpest possible way the problem of their social nature and place in history - a problem largely identical with that of the specific nature of the bureaucracy in these societies. Events have been rather cruel to most of the theories offered in answer to this question. For example, right-wing ideologues - and pseudo-left ones like Cornelius Castoriadis - consistently maintained that the Stali­ nist and post-Stalinist regimes were 'totalitarian’, in the sense that they could not be shaken internally and would reproduce themselves for an indefinite length of time. The events of 1989 to 1991 have refuted that thesis. For their part, a number of Marxists like Paul Sweezy argued that it was impossible to call a regime 'transitional’ when it had lasted for seventy years. But what about a regime which is shaken to its foundations after seventy-two years? Could that not be transitional after all? The question of the restoration of capitalism is now posed in Eastern Europe and the former Soviet lands - and that is exactly how the matter is understood by all social and political forces, both nationally and internationally. Those who identified the USSR with state capitalism are thus left in a quandary: how can capitalism be restored if the state is already under capitalism? It is of no avail to argue that state capitalism is different from private capitalism. For if the difference is qualitative, what is the point of calling them both capitalism? And if the difference is only quantitative, it becomes impossible to explain how such minor changes 1 POWER AND MONEY INTRODUCTION could have produced a profound, systemic upheaval in several East Soviet bureaucracy emerges unscathed from the momentous upheavals European countries. It would hardly seem a minor difference whether or of the last few years. The Soviet Union was a post-capitalist society, not an economy is ruled by the law of value, but in the cases of the former frozen in a transition stage between capitalism and socialism as a result GDR, Poland or Hungary that is now precisely what is at issue in the of, on the one hand, its international isolation from the most advanced transition from one system to another. industrial countries and, on the other, the negative effects of bureaucra­ All those who characterized the bureaucracy as a new ruling class look tic dictatorship in all fields of social life. It could regress towards even more misguided in the light of events in Eastern Europe. What kind capitalism. It could, if the bureaucracy’s power was overthrown by a of new ruling class is it which goes so far towards liquidating itself, which political revolution, make significant advances towards socialism. No abdicates a large part of its power with lightning speed, in Poland and coherent alternative explanation of that society and dictatorship has Hungary not even under the pressure of a revolutionary mass move­ been offered. ment? A new ruling class which proves incapable of reproducing its rule To the question of how the collapse in the East was possible, we offer a after being in existence for three-quarters of a century? A new ruling clear answer: power was usurped by a bureaucracy whose political base class which rules through no distinctive form of appropriation of the disintegrated. The point is not that the people in power were bad or social surplus product? inspired by wrong ideas, but that economic, political, cultural, ideologi­ One cannot make head or tail of the history of the USSR after 1923 cal and psychological forces interacted in ways that this book will seek to without understanding it as a three-cornered fight between the bureauc­ analyse. racy, the working class and petty-bourgeois and pro-bourgeois forces. This view of a socially distinct bureaucracy justifies our use of the term Neither in the crisis of 1928-33 nor in that of 1941-42 did Stalin restore to characterize the ruling layer in the USSR at a number of successive capitalism; and he did not maintain it in Eastern Europe in 1947-48. moments - say, 1930, 1937, 1945, 1956, 1970, 1986 and 1990. Political Paraphrasing Trotsky, we might say that the bureaucracy, in its own conditions were, of course, quite different before and after Stalin’s way and with barbaric means, tried neither to build a socialist classless bloody purges, before and after victory in the Second World War, before society nor to restore capitalism, but to defend and extend its own power and after Khrushchev’s initial de-Stalinization, at the beginning of and privileges. Although it had not the social or historical roots or the Gorbachev’s rule and in August 1991. But what they expressed were economic function of a ruling class, it did have a relative autonomy which various forms of rule by the same social stratum. In a similar way, the enabled it to defend itself, provided that it was not directly challenged by German imperialist bourgeoisie ruled under Bismarck in 1880, the a revolutionary mass upsurge. The real historical basis of its power was Kaiser in 1900, the Weimar Republic in 1920, the Nazis in 1935 and the first the decline and then the disappearance of independent mass activity. Federal Republic since 1948, but through very different political systems. As long as that condition prevailed, the relative autonomy could persist. Furthermore, the internal cohesion of the bureaucracy was much From the point of view of long-term historical development, the Soviet greater in the period 1950-70 than it was in 1930-39 or than it was to be bureaucracy may indeed be seen as a transmission-belt for capitalist after the late seventies. The degree of cohesion reflected, but also pressure on the Soviet Union. But this does not imply that during a powerfully interacted with, the relative stability or instability of society transitional period it acted in each grave crisis in the immediate interests as such. Thus the growing and conflictual decomposition of the bureauc­ of the international bourgeoisie. There is nothing apologetic in this racy itself increased the speed of disintegration of Soviet society and of Marxist interpretation. On the contrary: the blows that the bureaucracy the Soviet Union as a state. delivered at various points in history against bourgeois or pro-bourgeois forces came after periods in which it had itself weakened the USSR and the Soviet proletariat, and were accompanied by further heavy blows n against the workers and peasants. Terrible, unnecessary losses and sacrifices weakened the masses and the country in the long run, making When we say that the revolutionary Marxist interpretation of the Soviet impossible any fresh advances in the direction of a classless society. From bureaucracy is the only one to have resisted the acid test of events, we do that overall point of view, the globally counter-revolutionary nature of not mean to imply that it has provided an answer to every question. Far that bureaucracy appears undeniable. from it. In our approach to the transitional character of Soviet society, Only the revolutionary Marxist interpretation of the USSR and the and the peculiar nature of the Soviet bureaucracy, our focus has been on 2 3 POWER AND MONEY INTRODUCTION the rise of that social layer, and the relative stability of its power and other East European countries and are now developing on a larger scale privileges. But the problem posed today is the decline and now decompo­ in the USSR. Of course, if we leave aside what is involved in a simple sition of that same social layer. The dialectics of decline are not identical swallowing up of the GDR by the Federal Republic, the restoration of with the dialectics of ascent. Two points should be stressed in this regard. capitalism is nowhere a foregone conclusion. The process follows a The relative positions of the world bourgeoisie and the Soviet bureauc­ classical three-stage pattern. A first phase of general democratic racy were quite different in the 1930s (world economic crisis!) from what euphoria is followed by one of reactionary counter-offensive, under they are today. During the rise of Stalinism, especially after 1928, the conditions of profound political confusion and disorientation of the bureaucracy behaved as parvenus flushed with success. Even when working class. But then, in a third phase, the workers, despite their lack Khrushchev succeeded Stalin, he still felt able to declare to the US of political clarity or objectives, start to defend their immediate material bourgeoisie: ‘We shall bury you.’ Today, however, the Soviet bureauc­ interests not only against the openly restorationist forces but also against racy, like the Chinese, operates in a world context where the economic the ‘democratic’ governments which they themselves helped to elect. relationship of forces with the leading imperialist countries is actually This phase has already begun in Poland. It will develop elsewhere. worsening. It is profoundly conscious of this deterioration, even exagger­ Restoration of capitalism is possible only if that resistance is defeated, ating its depth and duration. It no longer has anything of the parvenu’s or at least so fragmented as to become practically inoperative. Such an cheek: it is marked rather by senile despair.