Basic Economic Precepts of Stalinist Socialism

“It was not Stalin’s malevolent personality or his repressive and sectarian policies that created the bureaucratic system of “state socialism,” but the other way around.”

Pedro Campos*

Proletarian Futures

HAVANA TIMES, June 20 – What was called “state socialism,” “former socialism of the 20th Century” or “real socialism,” was derived from the deviations of the Russian Revolution of October 1917.  The economic goal of this system, which Stalin and his successors described inappropriately as “Leninist,” had several cornerstones: state ownership of the means of production, the continuation of wage labor, the concentration of all surpluses in the state, and the centralized and planned use of these surpluses in the state’s interests.

The logic of capitalist development, tending to concentrate resources and finances, led the Russian communists of that time to believe that greater concentration of the appropriation of property and surplus by and within the state would necessarily give advantages to “socialism” and make it superior over capitalism, which dispersed its resources and wealth among all capitalists.

In addition, this Stalinist framework based itself on considering anarchy of production to be the primary cause of the crisis of capitalist overproduction. (In truth, anarchy itself is no more than a consequence of the drive for profit from the exploitation of wage-labor, while exploitation is responsible for anarchy, economic crises and environmental crises as well.)  This is why they believed that centralized planning would prevent such anarchy and “avoid the crises of capitalism.”

As this precept was faulty, so was the solution they found.  What was needed to definitively solve the crises of capitalism was to change the wage-labor production relations for other ones, those discovered by Marx in the form of freely associated labor in cooperatives that workers had created with their own efforts within the core of the capitalist system. (Capital, Vol. 3, Chap. 27). The essence of those relations is collective ownership or usufruct, democratic administration and the equal distribution of earnings.

This was a form of “socialism” formulated from the vantage of capitalism, not in terms of the full abolition of it as a system.

Furthermore, it was indeed inappropriate to call all of this “Leninism,” because Lenin left a clear testimony in a host of writings.  He had noted that the Bolshevik state had begun bureaucratizing, he opposed Stalin’s appointment to the post of general secretary, and given the concrete situation of Russia he had conceived of state monopoly capitalism as a necessary stage – but never as socialism in itself.  One year before his death, he pointed this out in one of his most important works on socialist theory.  Writing on “cooperativization,” he put forward the idea that the path to socialism was in the generalization of the system of labor by members of developed cooperatives.

It is known that when Lenin became ill, the Party and the State were victims of a factionalist struggle.  Soon after his death, this culminated in the victory of Stalin’s wing and his allies over those who they confronted and eliminated to the degree that they were becoming the minority. The lifeless body of Lenin was mummified to evade the funeral of his legacy.

Wage earners would remain

For Stalinism, the role of the hyper-centralized Party would be to direct “the dictatorship of the proletariat” —in which wage earners remained, but now under the government— and where the role of the “worker’s state” would be to administer the economy in a centralized manner.  All of this was opposed by those deviations of Marxism that would be branded as revisionist, anti-socialist, counter-revolutionary, an enemy of the people and other stereotypes.

For Marx, the new state would be a democratic republic of the workers.  It would be the workers, not any sectarian party in particular, who would be in charge of directing it.  The economy would be administered by their cooperatives and their unions, as well as by associations of free laborers, while the state would increasingly take charge of lesser matters as it would tend towards its withering away.

Marx’s culminating work, Capital, had as its main purpose to demonstrate that capitalism’s characteristic wage-labor form of the exploitation would be superseded by achieving its abolition (just as slavery and servitude were previously abolished and transcended).  This superseding is something that Stalinism obviates in its entire program.  Obviously, this is not accomplished by decree.  It would be achieved through a series of workers’ struggles at different stages until achieving a socialist revolution, which at some moment would be responsible for abolishing exploitation legally, a prevailing aspiration of Marxist communism and other tendencies.

Socialized production, privatized appropriation

Those faithful to Stalinist precepts, which had little to do with Marx’s socialism, forgot that the fundamental contradiction of capitalism is well defined in the classics.  It asserted that its production was increasingly social, while appropriation was increasingly private (concentrated), and for which the solution to crises of production could never be the greater concentration of appropriation, but instead its socialization.

The Party Is the People's Guarantee.

The socialization of appropriation implies de-concentrating it, decentralizing the appropriation of ownership and surplus.  This turns all workers into collective owners or usufruct owners of the means of production within which they work, in each center of production or service.  This would allow everyone to directly participate in the direction, management, administration and democratic distribution of the output.  For that, power would have to be taken by the workers.

The surplus value that was previously appropriated by the capitalist is appropriated by the state under “state socialism.”  However, the Stalinist system functions in a centralized and bureaucratized manner in deciding upon wage rates and new allocations of capital.  The totalitarian state is not satisfied with surplus value, it also appropriates part of the payment for the labor power of the worker.  In addition, it appropriates some of what capitalists generally dedicated to the extended reproduction of companies.

In that way, statist socialism can concentrate huge sums of material and financial resources with certain aims; in fact, this is because it takes them from the wages of workers and from extended reproduction (and sometimes from simple reproduction) of “non-prioritized” companies.  These decisions allow the state to demonstrate tremendous achievements in some spheres, but at the cost of depressing real nominal wages and de-capitalizing other companies and branches.

Worker sacrifices

The Stalinists argue that those sacrifices by workers are necessary to develop the economy, as if this were a sector separate and different from development and human well-being.  They constantly sacrifice the present for a socialist future that never comes, with this based on a developmental philosophy that prioritizes investment in means of production and technology over the well-being of the workers (just as capitalism allocates more in fixed capital than in variable capital in its fundamental objective to obtain more surplus value and to maintain competitiveness).

In truth, the over-exploitation of labor and the foregoing of extended reproduction by less productive companies require “state socialism” to sustain its insatiable bureaucracy.  This force is constantly enlarged as the only way to “control and stimulate production” using large amounts of concentrated resources and millions of wage-laborers.  This is done in accordance with the internal and external interests of that bureaucracy, whose propaganda presents these actions as being in the interests of all citizens.

That new bureaucratic class, “unforeseen” by Marxist socialism, is a natural consequence of the statism that appeared with the appropriation of property and surplus value (or surplus labor) concentrated in the state.  The bureaucracy, whose members decide everything in the economy, believe themselves the owners of the means of production and sees themselves as needed to create all supra-structural mechanisms (ministries, laws, the police, security and many others) to establish their effective control over the laborers and to guarantee that their wage workers produce.

There later appeared other forms of class struggle: those between the bureaucracy and the workers for the control of surplus.  This demonstrated the fundamental historical factor that has always moved history and that has compelled the deprived and exploited classes to struggle for their emancipation. This factor has always been outside the existing system, and with the emergence of new production relations it gives rise to the appearance of new classes.

State monopoly capitalism, which became socialism of the Stalinist type, could have been an initial transitional phase toward socialism, as Lenin considered it.  However, with its continuation over time and its subjection of wage labor, its essence is maintained in the division of social classes between the exploiters and the exploited, the owners (now the bureaucrats/leaders) and wage-labor workers for the state.  This has led to the reproduction of capitalism.

Boy on Havana's Malecon Seawall.

It was not Stalin’s malevolent personality or his repressive and sectarian policies that created the bureaucratic system of “state socialism,” but the other way around.  It was this system of statist concepts that gave Stalinism its marked tendency for political deviations and violations of all liberal, democratic, human norms, despite these having been in the tradition of socialist ideas since their emergence.

The communists who feared the concentration of economic and political power in a bureaucratic state apparatus were right.  These should have been confined to a few basic functions to guarantee defense, continuity of the revolution and other general methodologies, while tending to decline in favor of local powers.

Failed attempts “Communist parites”

All of the “communist” parties and governments that applied the basic economic precepts of Stalinism —although with difference of shades and for different reasons— failed to advance the socialization and democratization of economic and political power, and they all ended up the same way.

Cuba?… It’s no secret that these same precepts have been applied and that many Cuban revolutionaries and communists are working so that the situation here does not wind up the same.  In Russia, those who (like us) struggled because the system had not yet transformed itself into a monster were persecuted, jailed and physically eliminated by Stalin.

These included Bukharin, Trotsky, four other members of the Politburo and thousands of murdered communists, who were accused in fake trials for treason, sedition, conspiracy against Soviet power and other atrocities.  Here in Cuba the repression is subtler and without those same levels of aggressiveness.

The international situation has changed and our revolutionary process has other particularities characteristic of our history.  We have not been able to overcome the sectarianism of the Communist Party up to now, and we know that the enemy seeks to foster internal conflict within the revolutionary breast.

The stifling sector of the bureaucracy tries to prevent the changes necessary, but now immobility is ceding terrain before the weight of reality.  We hope no one underestimates the experiences of the disaster that led to “state socialism” in Europe, and that between all of us we will be able to find the path, without great fractures.

The struggle continues, and I’m convinced that the only battle lost is the one that is abandoned.

* Pedro Campos Santos. Former Cuban diplomat in Mexico and at the UN Human Rights Commission in Geneva. International political analyst.  Head researcher of the Center for United States Studies project the University of Havana. He is currently retired. His articles can be read at the following site:

Contact Pedro Campos at: [email protected]

3 thoughts on “Basic Economic Precepts of Stalinist Socialism

  • To Sam: I take issue with your assertion that Stalinism has retarded socialism around the world. Yes of course it has, but you seem to miss the irrefutable fact that Stalinism is the direct, inevitable result of the economic formula for socialism presented by Engels and Marx in the Communist Manifesto, and never rescinded by them.

    The capitalist Engels and his well-to-do bourgeois intellectual cohort Marx dished up a formula of full state ownership of the land and all the means of production. Stalin merely followed this absurd formula, word for word, and that formula is what has destroyed the reputation of socialism around the world.

    Look at the last pages of the 2nd chapter of the Communist Manifesto. You will find the bourgeois duo’s 10-point formula for a socialist economy. This is the wellspring of Stalinism, and Stalinism therefore is synonymous with Marxism.

    In retrospect it is impossible to conclude that the program set forth by those two men in 1848 was designed to turn the socialist movement away from worker-owned cooperatives, and to derail and destroy it from within.

    Guess what! It has done precisely that!

    From what you say it seems that you draw a distinction between Stalinism and Marxism. This is a refusal to see what is before your very eyes.

    When all the instruments of production are concentrated in the hands of the state, per the Marxian 10-point formula, private property rights and the trading market are abolished. When they are abolished the only way to run a modern economy is with massive bureaucracy, bureaucratic planning and control, and one-party political absolutism. This is Marxism incarnated and this is Stalinism.

    Nothing you or anyone else can do or say will ever refute this.

  • More brilliant writing from our dear comrade Pedro Campos! But this is only a beginning statement in a discourse that must proceed on a national and international level. This article is full of ideas and assertions, and it would take a massive amount of work and time to respond to them all. Please permit me therefore to offer but a few quick lines to begin a decent response before the national and international readers.

    1) Pedro is hamstrung by the fact that he only wrestles with the questions of socialist transformation with regard to his own, Cuban-soil problems. What could liberate his revolutionary genius from this crippling “narrowness” would be to recognize–and utilize–one hard, objective fact. The central problem of socialist transformation in Cuba is the same for the United States and every other country in the world. What this means is that Pedro–like the rest of us–must begin again from the standpoint that the correct program for a truly authentic, workable socialist republic is not specific to one country only. What is true for Cuba is also true for the U.S.

    2) The Cuban revolutionaries who are struggling against the bureaucratic, state socialist form of socialism are not the Lone Ranger. They are the same as those of us in the U.S. who are struggling against the monopoly capitalist regime and empire. This means that a) our struggle is the same struggle, and b) the program that can reform the Cuban form of socialism–and save the Cuban Revoluton and the PCC–is the same program that we in the US and other countries must put forward in order to win the people and defeat world capitalism.

    3) The bottom line for Pedro and for us all is “the program.” What is the correct program for an authentic, workable socialist republic? Pedro and we can rant and rave all we wish against the demons of Joe Stalin and all other horrid bureaucrats, but in the final analysis this is just letting off steam. The relevant question is: “What the hell is the correct program”?

    4) Our movement in the U.S. answers that the core formula for an authentic, workable republic is abandonment of the concept of “concentration of all the instruments of production in the hands of the state” per the last pages of the second chapter of the Communist Manifesto. In its place should be “direct ownership of the major instruments of production by employee-owned cooperative corporations on the Mondragon model, with pluralistic private ownership of small enterprise by individuals & families.” This sort of modern cooperative republic therefore would retain the historically evolved institutions of private property rights and the trading market, & the leading vanguard party would use them adroitly for socialist construction.

    Continued best wishes to Pedro Campos and all the Cuban patriots.

  • What kind of reforms are necessary for the system?

    Many people here in America talk about Cuba undergoing Chinese-style reforms, perhaps in the misguided hope by said Americans that the Communist system might be subverted. China’s Mercantile State Socialism has created economic growth, but widened the poverty gap and only entrenched the party bureaucrats. Instead of destroying State Socialism in China and replacing it with a free market as America hoped, it merely corrupted too many of the bureaucrats for the system to respond to the needs of its people.

    Many in Venezuela, on the other hand, talk about a more Democratic Socialism being developed. But can Venezuela serve as a successful model when the leader of Venezuela himself looks more to Cuba as his own model?

    It saddens me how every Communist regime in the world has stagnated. Marx and Engels never saw State Socialism as a protracted system, and this is a system which inevitably leads to the working class being “alienated” from the conditions of their production, just as much as Capitalism.

    I suppose the assumption is that a “worker’s party”, can avoid its nature as a political party and not resort to political class conflict and domination. But this is on its face value an absurd argument. A “worker’s party”, unless it automatically includes any worker in society, is wholly transparent, and entirely democratic, will inevitably fall victim to the petty self interest of its collected members. This leads to stagnation, as the party leadership naturally seeks to maintain its status. Instead, real Communism, as the democratic management of the Commune’s economic structure, offers liberation to all people to work where they want, manage their cooperatives as efficiently as they need to, and invest as much surplus value as necessary to increase productivity, and use and share information freely to exchange ideas and technology with other cooperatives.

    Anyways, I feel that Stalin, and Stalinism, has retarded the progress of Communism around the world. Imagine how much more popular Socialism would have been in Europe were it not for the invasion of Hungary and Czech, ect. If it wasnt for Stalinism, perhaps Marx’s prediction about the overturning of Capitalism would have already occurred?

Comments are closed.