The Nature of the Soviet Bloc [ZACF]

We learn in Russia how Communism cannot be introduced.

Peter Kropotkin,
June 1920, “Message to the Workers of the West”,
in P. Avrich (ed), The Anarchists in the Russian Revolution,
(Thames and Hudson), p. 151. Documents of Revolution series.

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While there have been many changes in Eastern Europe, the Soviet Union and parts of Asia since 1988, it is important to state that these countries were not in any way socialist and to explain why.[1]

Since at least 1918, Anarchists have recognised that the Russian command economy was State capitalist because

  • it maintained the separation of the producers from their means of production and undervalued their labour power in order to extract surplus value for a ruling class which owned and controlled the means of production. This is the case in all capitalist countries.
  • it was also subject to the same law of constant accumulation.
  • In the case of the Soviet Union, all property/ means of production belonged to the Soviet state so all surplus value accrued to it, and, more specifically, to the bureaucratic elite which controlled that State.

The absence of internal markets in the USSR and other Marxist-Leninist countries did not mean that the capitalist mode of production was not in operation.

Surplus value is incorporated into goods at the point of production under capitalism. Value is not created in the process of distribution (e.g. the market), but by labour-power in the process of production.

In the West, this surplus value is realised as money profits by selling these goods on the market. But the surplus value is incorporated into goods whether or not they are sold. This can be used directly for providing use values for the capitalists such as weapons or extra plant or machinery.

This is the way that State-capitalism worked. Internally surplus value was realised directly as use-values (e.g. weapons, plant) which (i) kept the system ticking over (ii) maintained the bureaucracy in its privileged class position. It is also important to note that many goods were sold on the international market (particularly raw materials and arms) and the money shared out amongst the bureaucratic elite in the form of bribes, wages and awards.

In any capitalist system profit is extracted at the point of production by undervaluing labour power (remunerating the producers with less than the full value of their production). Whether or not this profit is realised as cash money on the market is not of primary importance. Much of this surplus can be fed directly into the system as means of production. A system in which all value is fed back as means of production is possible in theory. All capitalist systems tend towards this with more and more profit going into plant and machinery and less and less labour from which to extract a profit being used over time (this has been called “the tendency for the rate of profit to fall”).

The Soviet Union exemplified this, it was a night mare form of capitalism where weapons systems and heavy machinery proliferated but basic consumer needs were not met.

The absence of private property rights (e.g. individual legal ownership) is often put forward as evidence that the Marxist-Leninist countries were not capitalist but some sort of new “post-capitalist” system.

Property forms (in the sense of who owns what in law) can be a convenient legal fiction concealing the essential relations of production. For example, in the lineage mode of production, property was supposedly collective but in practice it was held “for the people” by an oligarchy of patriarchal leaders and their direct descendants. So all tributes and profits passed to them SEE POSITION PAPER ON CLASS STRUGGLE REGARDING THE LINEAGE MODE. State-Capitalism in Russia employs a similar ruse to conceal its exploitative nature.

Ownership of the means of production cannot be reduced to individual legal title to stocks. Ownership can be disaggregated into 3 components: legal ownership (title to property, and legal status as an employer); economic ownership (control over investments and resources); and possession (control over the physical means of production and over the labour power of others).

  • In the West, the ruling class are juridical owners of the means of production, and also control the accumulation process, decide how the physical means of production are to be used, and control the authority structure within the labour process, whilst the “working class” has no legal rights over the means of production (and must thus sell its labour power), and is excluded from control over authority relations, the physical means of production, and the investment process . That is one reason why top corporate executives and managers of parastatal enterprises can be classified as bosses.[2]
  • In the East, the ruling class had economic ownership and possession. It also had collective legal ownership in the sense that it was legally entitled to run the economy on behalf of the working class and peasantry, both as the ruling vanguard party and as the “legitimate” occupants of the appropriate posts in the State apparatus.

Despite the claims of Stalinists and Trostkyists of various hues, there has always been unemployment in the Soviet Union, especially high in oppressed outlying regions such as Armenia and Azerbaijan. This unemployment was concealed as unpaid slave labour (labour camps), low paid work, and seasonal and migratory work in the outlying areas. There was also homelessness, poverty and all the other common features of capitalism.


Basically, after October 1917, the organised working class had expropriated most of the means of production, and most land was seized by the peasants. But before the masses could consolidate and expand these gains, they lost power to a rising bureaucratic class comprised of the remnants of the Tsarist bureaucracy and also the Bolshevik (Communist) Party. The new ruling class placed the means of production under the control of a one-party State run by the Communist Party.[3]

This was not an inevitable or an accidental development. This transfer of class power was partly rooted in Marxism. Marx had proposed the centralisation of all finance, land and means of production in the hands of the State as an essential step towards socialism. The Bolsheviks developed these views into a rigorous attack on workers self-management. Workers control was seen simply as a step on the road towards nationalisation, with socialism placed very far down the road. Such a philosophy led directly to State-Capitalism (ads predicated by Bakunin in the First International). the transition from capitalism was seen as a process in which an enlightened vanguard party would assume State power to impose “socialism” (in the sense of State ownership) on the “backward” masses. As we have discussed elsewhere (SEE POSITION PAPER, FIGHTING RACISM), nationalisation is not real socialism, it is a policy that places the means of production under the control of a State managerial elite.

By 1921, the emerging ruling class had wrested power from the workers and peasants. This process was completed in essence in 1918, and accelerated by the “war communism” of the civil war period and Trotsky’s “militarisation of labour” proposals. The civil war contributed to this degeneration of the revolution insofar as it provided an excuse to impose repressive anti-worker measures, and insofar as it weakened the working class’s ability to resist the Communist-led counterrevolution.

The process of State-capitalism was finalised by Stalin in the 1920s and 1930s, but the actual transfer of power had already been completed by the old Bolsheviks (Lenin, Trotsky and co.). The only small difference was that the “New Bolsheviks” recruited after 19171 were subjectively as well as objectively State-capitalists.


Russia and Eastern Europe have never been without workers opposition to the one-party State-capitalist regime. These reflected workers grievances with the political and economic hardships under which they lived. They were not “imperialist plots” which had to be crushed but progressive popular struggles.

Examples include Kronstadt 1921 in Russia. Also the revolts in East Germany and Hungary in 1953 and 1956. In Czechoslovakia in 1968 regime attempts to liberalise the economy snowballed into a popular revolt that had to be put down with Soviet tanks.

In Poland there were riots in 1970 and 1976 and in 1980 a mass strike movement spread out of the Gdansk shipyard. The Solidarnosc movement that developed was a mass trade union that included many left currents advocating workers self-management. However, the leadership was made up of reformists like Kurion and Walesa, These made common ground with the Catholic Church and reform-minded Communists. Demands for workers’ self-management were channelled into power-sharing in a liberal capitalist economy. Reformist and conservative currents dominated the union from the start, despite notable rank and file action such as the take-over and management of the entire city of Lodz by the local Solidarnosc in 1981. The imposition of martial law in 1981 was aimed almost exclusively at destroying rank and file opposition: while the leaders served brief terms under house arrest or in prison, the base resistance in the factories and mines were crushed. The union leaders were then released to help supervise the rush from State-capitalism to market-capitalism alongside the reform-minded Communists .

These years of struggle in Poland found an echo in other parts of the Eastern bloc. In Romania an embryonic free trade union, the SLMOR, took government officials hostage and in Russia the Free Workers Inter-Professional Association (SMOT) was formed. In China, autonomous unions played an important role in the Tiananmen Square movement that was crushed by the Communist Party.

Gorbachev inherited (sic!) a Russian economy in severe crisis. For the Communist Party to survive and maintain control, he realised that some economic liberalisation, a move towards a more market-driven form of capitalism, was needed, the threat of mass revolt and economic bankruptcy was hanging over the CP’s head.

In terms of economic restructuring (“Perestroika”), his initial aim was probably to bring about some form of limited internal market in consumer goods while maintaining bureaucratic planning and power and arms in heavy industry. However, this form of hybrid capitalism proved impossible to maintain and there was a rapid move towards a market form of capitalism. At first, these reforms had substantial mass support.

In order to achieve support for Perestroika, Gorbachev had to allow a large amount of political liberalisation (“Glasnost”). This opened space for the expression of popular dissent and thus increased the opportunities for popular resistance to attempts to reimpose a one-party State.

The reforms in the Soviet Union prompted a massive popular response in Eastern Europe, with Gorbachev unwilling or even unable to intervene to crush dissent as had happened previously. In Czechoslovakia, East Germany, Poland and Romania mass demonstrations and (in the Romanian case) armed insurrection swept the ideology of Marxism-Leninism into the dustbin of history, and led to the establishment of parliamentary regimes. In Yugoslavia, Bulgaria and Hungary the change over to a multi-party system, was brought about gradually by reform Communists thus avoiding mass demonstrations.

In all of these countries there has been a rapid shift towards more market-based forms of capitalism. This was often far from the intentions of the masses who were demanding more political rights and economic well-being.

While many of the enterprises in the formerly State-capitalist countries have been closed or privatised to foreign investors, others are now “owned” rather than merely “managed” by their former directors.

Neither of the two ridiculous orthodox Trostkyite notions that (1) the reforms were the vital injection of workers democracy that would transform these countries into socialist paradises or (2) that workers would actively defend the so-called “post-capitalist” property forms has been borne out in fact.

However, there have been strikes and other working class actions in defence of some of the welfare and employment measures of particular State-capitalist countries, such as greater access to abortion (East Germany), cheaper transport etc. We absolutely support workers in defence of jobs and better facilities if these exist. This in no way commits us to the defence of State-capitalism any more than, for instance, a defence of greater freedom of speech and freedom of movement in the West commits us to defending market-capitalism. Our criteria and concern here is whether these facilities and rights are in the interests of the working class. If they are, we are for their defence and enhancement through mass struggle; the niceties of different forms of regulating the capitalist economy are not our concern. we are here to fight capitalism and the State, not to give them tips on how to run things better.


  1. A useful discussion of the theory of State-Capitalism is J. Crump and A. Buick, (1986), State Capitalism: the Wages System under New Management. Macmillan.
  2. See, for example, E.O. Wright (1978), Class, Crisis, and the State, New Left Books. London. Although Marxist, this book develops a model of the class system which is fairly similar to the Anarchist model outlined in an earlier section (except it fails to deal with the position of those who occupy military and bureaucratic positions separate to production, strictly defined). See POSITION PAPER ON CLASS STRUGGLE, CAPITALISM AND THE STATE.
  3. On the degeneration of the Russian revolution, the classic studies are still Voline, The Unknown Revolution. Black Rose; A. Berkman, The Russian Tragedy; P. Archinov, (1987), The History of the Makhnovist Movement; G.P. Maximoff, Bolshevism: Promises and Reality; E. Goldman, My Disillusionment in Russia. More contemporary accounts can be found in WSM, Stalin Did Not Fall From the Moon!, Ireland.; WSF, 1997, What is Anarcho-Syndicalism?, Johannesburg. On the history of the Russian Anarchist movement is outlined also in P. Avrich, The Russian Anarchists. P. Avrich (ed.), The Anarchists in the Russian Revolution is very useful as it brings together an uneven collection of Russian Anarchist literature from the time of the Revolution. Also useful is J. Westergaaard-Thorpe, “The Workers Themselves”: Revolutionary Syndicalism and International Labour, which looks at the conflicts between the international Anarchist movement and the new Russian Marxist State in the 1920s.