Draft Theses on Imperialism and Terminal Crisis*
(1) World events are being shaped by the rivalry between Western (US, EU, and UK) and Eastern (China and Russia) imperialist powers to redivide the world at the expense of their rivals. Lenin explained imperialism as the highest state of capitalism, that of capital’s decline and decomposition, in which state monopoly capital (SMC) is engaged in a zero-sum contest, inevitably wars, to repartition the world, to extract value and hence super profits or absolute rent from labour to the point of its, and potentially, humanities, destruction.
(2) Monopoly ownership of land or any scarce commodity allows the owners to extract excess profits or rent from non-monopoly owners. Competitors are prevented from entering the market thereby allowing their share of value to be extracted as super profits or absolute rent. This transfer of value occurs when prices of production determined by the market approximating labour cost plus ‘average’ profit are distorted by monopoly power to prevent the equalization of wages and profit to its advantage, that is, low wages plus super profits.
(3) This leads to the concentration and centralization of capital in increasingly large corporations as monopoly capital. Add the nation state, which backs its own monopolies, essentially through the central bank, law and the military, and we have SMC, or, state capitalism. Henceforth SMC, in the form of imperialist states, competes on the global market economically, politically, including warfare, to expand their sphere of interest at the expense of their rivals.
(4) Ukraine is the main current fracture point between imperialist rivals where a proxy war between the US and Russia (and their respective allies) is being staged over who controls this semi-colony, and ultimately, over who controls Eurasia, the long-time key to world power. A proxy war is a war between imperialist powers regardless of the lesser dependent powers that are involved. This means that in the war in Ukraine, Russia must be understood as an imperialist power engaged in war with the US/EU powers over its partition, rather than a war between Russia and Ukraine.
(5) A similar fracture is looming over Taiwan where the US and China (and their respective imperialist and dependent allies) are preparing for a war that will repartition East Asia and the Western Pacific. Taiwan is the prize here as whoever gains Taiwan will control East Asia. Taiwan is recognised by the UN and the US as part of China, so if the US succeeds in winning a war over Taiwan this can only be at the expense of massively weakening China.
(6) While the Western imperialist powers led by the US are encroaching on Russia from Europe, the US and its Pacific and South Asian allies are encroaching on China from the East to move into East Asia. The pincer movement from East and West demonstrates that the aging Western bloc led by the US must go to war to prevent the rising Eurasian bloc of China and Russia from retaining control of Eurasia and therefore the world.
(7) The fact that the Western bloc must encroach on Russia and China to weaken and break their control of Eurasia reflects the extent to which the Western imperialist powers have declined since the early 20th century. Today they are in a terminal crisis because they can no longer restore the conditions for the production and extraction of value sufficient to maintain the rate of profit. Their only recourse is the zero-sum game of winning control of Eurasia so as to gain access to scarce and vital resources and cheap labour to maximize profits at the expense of Russia and China.
(8) Similarly, Russia and China have the capacity and interest to defend their sphere of interest, Eurasia, so as to have competitive advantage over Western imperialism globally. While all imperialist powers are capitalist, the Russia/China bloc has special advantages. These relate to their origins as new imperialist states born of degenerate or deformed workers states which underwent a qualitative restoration of capitalism after 1990. These advantages are threefold. First, both inherited their respective expansive Soviet territories. Second, they inherited ‘workers’ property’ in the form of the material wealth of science, technology and infrastructure. Third, the bureaucratic caste that formerly administered state property could use the state machine to regulate the capitalist economy as ‘monopoly state capitalism’.
(9) These special advantages account for why the Russia/China bloc is expanding at the expense of the US/EU/Japan bloc. All are state monopoly capital regimes where monopolies rely on their dominance of the market to extract super profits or rents. Prices of production which assume that the market will equalize profits according to share of the market, no longer prevail. The state intervenes with subsidies and regulations that restrict competition and allow monopolies to dominate the market. The critical difference that arises here between East and West is in the qualitative character of state intervention, often crudely reduced ideologically to the “democratic” and “authoritarian” character of their states.
(10) “Democracy” in this context, is the bourgeois ideology of the market rooted in the sovereign individual and the constitutional separation of powers between legislature, judiciary and executive. Fundamentally this separation of politics from business is held to prevent business from using the state to protect monopolies. But such ‘democracy’ is merely a front for the state acting as the committee of the ruling class in all capitalist countries. In the Western ‘democracies’ the rule against monopolies is broken, and brokered, by politicians, the state bureaucracy and central banks. Yet politicians, all lobbying for their ‘special interests’ grounded ultimately in buying and selling on the ‘free’ market, will resist bringing an authoritarian regime into existence that circumscribes their special interests in the interests of ‘capital-in-general’.
(11) Capital-in-general is an abstract concept Marx used in Capital Vol 1 to describe the totality of individual capitals for purposes of exposition. However, at the complex, concrete level of reality, beyond that assumed in Vol 3, and left unfinished in the remaining planned volumes of Capital, it explains the role of the state in intervening to regulate the market to set the conditions for production that promotes the concentration and centralisation of individual capitals. Subsidies, bailouts, nationalization of failing firms, are some examples.
(12) In Western economies these interventions are usually made to counter crises and substitute for new capital formation which cannot be met by private capital. This meets the special interests of private capital, such as state provision of infrastructure, or state bailouts in times of falling profits and bankruptcies. These state interventions help create the return to the conditions of profitability and at this point private capital deems these interventions as interference in the market and lobbies to privatize and deregulate the market.
(13) In the former bureaucratic workers’ states (BWSs) (see footnote 1) however, state monopoly capital emerged directly from the centralized soviet state. China’s restoration of capitalism took the path predicted by Trotsky of a change in the class character of the state from the defense of workers property to the defense of capitalist property – namely state capitalism. Critical in this change of state character was the switch from planned prices to market prices according to the Law of Value (LOV).
(14) The bureaucracy by suppressing democratic planning botched the plan and failed to meet workers’ basic reproductive capacity by destroying labour time as measured by need. It was forced to adopt the law of value to define socially necessary labour time to increase productivity as measured by the rate of exploitation and make the transition to state capitalism. However, while the LOV became a measure of value, it did not become a free market doctrine. The state used its political authority to regulate the market to manage the business cycles and prevent the special interests of private capitalists threatening the interests of capital-in-general in economic and political stability.
(15) Thus, in Russia and China, the state machine inherited from the former bureaucratic states now uses its political ‘authority’, or popular legitimacy, to retain state monopoly ownership in key economic sectors, industry, finance, transport and communications in particular, and to regulate the market. The result is that the uncertainty and instability of the market is countered by state planning and administration. Thus, the state acts to ensure that capital-in-general is served at the expense of private capital that is devalued and incorporated into state owned monopolies. Both Russia and China have used their authoritarian central state to resist being swallowed by Western imperialism, and to out-perform it during the GFC and the economic warfare since.
(16) We have shown how Russia and China are both state monopoly capitalist regimes which differ in important respects from Western imperialism. Before we look at the likely future course of the rivalry between the two blocs over Eurasia, we want to exclude other interpretations of this rivalry and expose their political import. There are three broad positions on the left that fall short of what is expected of Marxists. First, there are those who see these two states as capitalist but not imperialist. Second, those who see them as some form of hybrid of both ‘socialism’ and capitalism where ‘socialism’ still predominates. Third, are those who continue to argue that China is still a deformed workers’ state that has not yet undergone capitalist restoration.
(17) Regarding the first category, we have shown above that Russia and China made the transition to capitalism from Bureaucratic Workers states (BWSs) under the basic laws of capitalist development, specifically the law of value. It is evident that their recent development as authoritarian SMC regimes made them rival imperialist powers to the Western imperialist bloc. There is nothing to sustain the view that Russia and or China are states dependent on imperialism.
(18) No colony or semi-colony can accumulate capital and export capital in excess of its FDI. No dependent state can militarily challenge existing imperialist states. As some claim, there is no category of ‘independent’ capitalist state balanced somewhere in idealist space/time since their ‘independence’ can only derive from becoming imperialist. To defend Russia and China against their Western rivals as oppressed, dependent, or supposedly ‘independent’, capitalist countries, is to mislead workers into fighting wars of national defense of Russia and China rather than class war against both imperialist sides, doing massive harm to the struggle for socialist revolution.
(19) Second, there are those who view Russia and/or China as a hybrid state: a capitalist market and a state that behaves like it is ‘socialist’. They misunderstand the class character of the state. What they are confusing is a former central state that functioned in a BWS based on planned prices, with a SMC regime where prices are determined by the law of value. Michael Roberts shares this view confounding matters by suggesting China is ‘state capitalist’ as understood by Lenin. He advises the CPC to further regulate and control the market to prevent it from restoring capitalism, supposedly as Lenin would have done in Russia.
(20) Lenin’s use of ‘state capitalism’ was referring to capitalism under the control of a healthy democratic workers’ state. He used it to counter any confusion that it was not a temporary retreat necessary allowing the market to stimulate competition and bring down prices. But Xi and Putin are no Leninist leaders of healthy workers’ states. They are the authoritarian leaders of SMC new imperialist states. The failure to identify Russia and China as imperialist because state ownership dominates the market is empiricist and meets the same objections made above. The failure to understand the class character of the state is an abuse of Marxism which leads to a reactionary counter-revolutionary program.
(21) Third, those who regard Russia and/or China as surviving BWSs confuse market reforms with capitalist counter-revolution. The class character of the state reflects the social relations it defends. Under a BWS the state defends workers’ property. Workers’ property comprises state owned property that cannot be privatized by the ruling bureaucracy for fear of workers’ revolution. As we explained above, the reason that the market reforms were introduced in Russia and China in the 1980s was to overcome the stagnation of the planned economy.
(22) The introduction of the LOV to determine prices worked to increase the efficiency of the plan. But unlike state capitalist reforms in Russia under Lenin’s healthy workers state in the 1920s, by the 1990’s both Russia and China had gone from quantity to quality where market reforms turned into state capitalist counter-revolutions. As Trotsky predicted for Russia, once the LOV became dominant in determining prices, and the threat of political revolution was defeated, the BWS was transformed to defend state capitalism and the dominant capitalist social relations.
(23) Those who regard Russia and China as BWSs have to explain how they can overtake Western imperialism without the transformation of the state as the servant of capital-in-general in the epoch of imperialist SMC, thus enriching the bureaucracy as a new bourgeoisie. They may try to credit the bureaucracy with managing a BWS to enrich itself and pull millions up out of poverty, buy billions of US$ securities with excess profits, and balance the needs of workers with profits. But as we argued above, this is only possible when Russia and China outcompete Western imperialism at their own game, by converting the former bureaucratized state into the authoritarian SMC regime and rapidly expanding state-owned capital-in-general to give them a competitive advantage over their rivals.
(24) The claim that the Stalinist bureaucracy has the ability to develop the forces of production (FOP) rejects Trotsky’s position in The Revolution Betrayed that this is not possible (see footnote 2). It represents the Pabloism of generations of former Trotskyists who abandoned the political revolution to overthrow the bureaucratic caste and tail the Stalinists as ‘progressive’. Far from progressive it bears out Trotsky’s grim prognosis that the failure of the world revolution arising out of world war would give rise to a new form of bureaucratic state calling into question the socialist revolution. His prognosis was premature. The historic defeat came 50 years later when the restoration of capitalism in the 1990s created bureaucratic dictatorships in the form of SMC capable of developing the forces of production. But far from invalidating Trotsky’s program in the imperialist epoch, it vindicates it. The new SMC regimes in Russia and China joined the imperialist powers to redivide a world facing a terminal crisis of wars, slumps and pandemics destroying the conditions for capitals survival and creating the conditions for world socialist revolution.
(25) The rivalry of the Russia and China bloc with the US led bloc is now taking the form of inter-imperialist proxy war. Russia backed by China has fought NATO to a nuclear standoff in Ukraine. The CPC run state accommodated itself to imperialist FDI yet accumulated surplus capital requiring capital export and purchase of US Treasury bonds. Its ‘win-win’ deals with its semi-colonies extracting super profits from its ODI is a ‘revolutionary’ foreign policy only insofar as it ferments revolution. Its SOE’s and JVs are accountable to the LOV, rather than the planned control of prices and wages. Such startling developments, it is claimed by these fantasists, are all accomplished by a BWS. Who needs a socialist revolution when the CPC proves Pablo rather than Trotsky right!
(26) Social imperialists who claim Russia and China are progressive to defend these states, disarming the workers in the class war and sending them to fight wars on behalf of imperialist powers. Workers act on the war policy of Lenin and Trotsky to turn imperialist war into civil war, that is, class war. Inter-imperialist war is the highest stage of class war. Workers have no interest in fighting such wars. Our position is dual defeatism, for the defeat of both sides. Nor does it make a difference if one or other is fascist since this is the political expression of imperialist finance capital.
(27) National liberation wars are subordinated to inter-imperialist wars because no oppressed country can be free. Whether the outcome is a victory to one or other imperialist power, or a ceasefire, this reflects a division of the spoils between imperialists while the dependent countries involved remain oppressed by one or both powers. Since the national question is subsumed by the class question, it is the obligation of workers in the imperialist states to defeat the enemy at home in a civil or class war. In the oppressed countries workers and peasants fight to overthrow their national bourgeoisies.
(28) The Marxist revolutionary program on war is critical to the success of socialist revolution. The social imperialist camp followers of the ruling classes take a counter-revolutionary stand on war and join forces to support their own imperialist motherland. Their national chauvinism becomes an objective force in the counter-revolution. Exposing and defeating the pro-war left mobilizes the subjective factor of class-conscious workers for international class war and socialist revolution. Dual defeatism renounces national chauvinism and turns its guns on the imperialist ruling class and its national bourgeois lackeys. Defeat of inter-imperialist war creates a revolutionary situation and the class forces capable of overthrowing capitalism and making the transition to socialism.
(29) Only the overthrow of capitalism and the building of socialism can resolve the terminal crisis of capital and what drives it, the contradiction between capital and nature. Marx insisted that Capital’s destruction of nature, including humanity, would destroy the conditions for its existence as a mode of production. To avert the inevitable destruction of the terminal crisis, the compounding economic crash, climate breakdown, plagues and nuclear war, the workers led by the new world party of socialist revolution, must overthrow capitalism, build socialism, and thereby create the conditions for communism.
1. Here we use Bureaucratic Workers State (BWS) to include degenerated and deformed workers states as the bureaucracy was mediating capitalism and workers property in both cases.
2. The stagnation and decay of productive forces (due to the inherent waste of capitalist economies and inefficiencies of the Stalinist bureaucracy in the DWSs ) does not mean new technologies and advances in the FOP cease, rather it is understood that without the world revolution the social relations act as a fetter on the advances of the FOP relative to what is possible in world liberated by the socialist revolution. The stagnation and decay of productive forces (due to the inherent waste of capitalist economies and inefficiencies of the Stalinist bureaucracy in the DWSs ) does not mean new technologies and advances in the FOP cease, rather it is understood that without the world revolution the social relations act as a fetter on the advances of the FOP relative to what is possible in world liberated by the socialist revolution.
* These Draft Theses have been written as work in progress to open further discussion on the rise of Russia and China as imperialist states that form part of the BRICS entering into an escalating rivalry with the declining US led imperialist bloc. We anticipate comments and criticisms that develop our understanding of the current world situation.
International Leninist Trotskyist Tendency (ILTT), 11/18/2022
Can China Rescue Global Capitalism? The Terminal Crisis Unfolds from Sri Lanka to South Africa and Beyond
BRICS Around the Neck of the Proletariat
http://www.cwgusa.org/wp-content/uploads/2016/05/2014-07-JUL-Class-Warrior-Vol-001-No-6.pdf
Why Russia and China are Imperialist Powers
2014-07-JUL-Class-Warrior-Vol-001-No-6.pdf (cwgusa.org)
