In the final analysis, the basic contradiction of the transitional society can only be transcended through a substantial rise in the social productivity of labour. Historical experience, in both capitalist and transitional societies, has shown that techniques which increase productivity by improving the technical level and organisation of labour ultimately give far better results than those aimed at increasing individual productivity. Moreover, such techniques call for little use of individual material incentives. They are furthered at most by collective benefits to society as a whole or the workforce of a given enterprise. Such types of incentives, moreover, have the advantage from the viewpoint of building socialism, that they favour the cohesion and internal solidarity of the working class — insofar, that is, as enterprise parochialism is resolutely combated.
However, the social productivity of labour cannot be increased without the promotion of an increase in the administrative and technical knowledge and skills of the producers. Theoretically, this education ought not to be the source of material advantages once society has taken over its expense, that is, once this expense is no longer financed by the individual producer or their family. In practice, the total absence of individual benefits for the acquisition of such skills would become counterproductive, if only because of the additional effort involved in attempting to gain them. Thus, the socialist state is compelled to maintain the capitalist system of monetary payment according to work, with skilled labour being given a higher remuneration than unskilled, and therefore to uphold inequality in access to consumer goods. However, this unavoidable difference in remuneration between unskilled and very skilled labour, between manual and intellectual labour, brings with it certain dangers, including the danger of bureaucratisation of the functionaries of the socialist state.
In conditions where the supply of consumer goods is inadequate to meet everyone's needs but sufficient to give significant privileges to a minority, there is a tendency for the functionaries of the socialist state, who are in charge of administering and enforcing the inequality of access to consumer goods that flows from capitalist norms of distribution, to become bureaucrats, i.e., privileged officials who monopolise decision-making power.
This tendency is particularly accentuated in an isolated and economically backward socialist state (or group of socialist states). Here, the lack of administrative knowledge and skills within the working class inevitably forces the socialist state to utilise the skills of former capitalists, their managers and state officials, most of whom can only be persuaded to serve the socialist state by being granted high salaries and privileged access to consumer goods. This creates the danger of corruption and bureaucratic degeneration among those revolutionary workers who become functionaries of the socialist state.
The 1917 Russian Revolution was one of the most profound and sustained mass mobilisations in history, marked particularly by the mobilisations and democratic self-organisation of the working class. The Russian Revolution was the product of a deep-going social crisis resulting from the contradiction between the objective demands of capitalist development in Russia (which in the industrial sphere had already reached the stage of imperialist, monopoly capitalism) and the survivals of Russia's feudal past, particularly in agriculture (where millions of land-hungry peasants were exploited by a hereditary landowning nobility) and in the political superstructure (which was dominated by the landed nobility headed by an absolutist monarchy). The revolutionary explosion in 1917 was triggered by the deprivations imposed on the Russian working class by the inter-imperialist war of 1914-18, itself the inevitable explosion of the objectively socialised productive forces against the fetters of capitalist private property and national frontiers.
The Russian industrial and commercial capitalists, and their political representatives, as well as the petty-bourgeois reformist parties (the Mensheviks and Socialist Revolutionaries), proved incapable of resolving Russia's social problems. Only the Bolshevik party consistently defended and championed the interests of the Russian working people.
On November 7, 1917 (October 25 in the old Russian calendar) the Russian workers, led by the Bolshevik party, overthrew the unelected landlord-capitalist Provisional Government and transferred all power to the soviets (councils) of workers', soldiers', and peasants' deputies. These elected councils represented the highest form of institutionalised democracy the world has seen. Through the soviets, and the workers' and peasants' government elected by them, the Russian workers and peasants swept away the tsarist state machine, granted the oppressed nationalities the right to self-determination, distributed land to the peasantry, established legal equality for women, and introduced workers' control over capitalist industry.
Given the general poverty and backwardness of the country, the Bolshevik leaders understood that it was impossible for the Russian working class to directly hold power for a prolonged period, let alone build a viable socialist economy, if the revolution remained isolated in a hostile capitalist world. They recognised that the long-term survival and further development of the Russian Revolution depended upon aid from victorious workers' revolutions in the more economically advanced countries of Western Europe and North America. They saw the socialist revolution as an international process — a process they sought to assist through their initiative in organising the Communist (Third) International.
Inspired by the example of the Russian Revolution, there were big workers' upsurges in the major capitalist countries of western and central Europe at the end of World War I, which brought the workers to the threshold of victory in Germany, Italy and Hungary. However, these revolutionary upsurges were defeated due to the still remaining strength of imperialism (which was able to grant concessions to the masses — eight-hour working day, universal suffrage, etc.), the class-collaborationist policies of the Social Democratic parties, and the inexperience of the newly formed Communist parties. Through these defeats, the socialist revolution was isolated within a backward country. Imperialism, and its Social Democratic allies, were thus mainly responsible for laying the social basis for the subsequent rise of the Stalinist bureaucracy.
The catastrophic decline of the productive forces in Russia due to the three-year-long civil war unleashed by the landlords and capitalists after the revolution, combined with direct imperialist military intervention and economic blockade, led to conditions of extreme material scarcity, famine, industrial and financial breakdown. The same factors led to a qualitative weakening of the already small working class in the cities, which had become dispersed as a result of the collapse of industry. In addition, large numbers of the most politically conscious elements of the working class either died in the civil war or left the factories to be incorporated into the Red Army and the state administrative apparatus.
In the life-and-death struggle against foreign invaders, domestic counter-revolutionary armies, and economic sabotage by capitalist managers and technicians, the Bolsheviks were forced to move much more quickly than they had originally intended to nationalise industry, in order to bring it under the control of the workers' state. While the extensive nationalisations deprived the capitalists of bases for counter-revolutionary activity and enabled the Russian workers to equip and supply the Red Army, many factories ceased to function due to the workers' lack of managerial expertise and technical skills. The decline in industrial output brought about a corresponding decline in agricultural production by the peasants, who were unable to find industrial goods to exchange for their crops.
In order to revive the economy at the end of the civil war, the Bolshevik party (now renamed the Communist party) was forced to allow a restoration of capitalist relations in agriculture and retail trade, and a partial restoration of capitalism in wholesale trade and industry (leasing of smaller enterprises to private investors, competition for profit between state-owned enterprises). Under this retreat, known as the New Economic Policy, while waiting for aid from victorious workers' revolutions in the West, the Soviet socialist state was to regulate the partially restored capitalist economy and direct it toward the gradual building up of a socialised, planned economy. However, in order to do this, the Bolsheviks were forced to rely on the administrative expertise of former capitalist managers and tsarist officials. Hostile to the revolution, these administrators from the old regime could only be induced to work for the socialist state by granting them high salaries and privileged access to consumer goods and services. The administrative apparatus of the socialist state thus rapidly became dominated by a bureaucratic stratum.
At the start of the NEP, a certain economic revival began. However, its immediate beneficiaries were the small peasant proprietors, private traders and small factory owners. The demobilisation of the Red Army and the slow revival of the large state-owned enterprises (which lacked the necessary injections of large investment funds for repair and renovation of expensive machinery) led to massive unemployment in the cities. The continuing shortages of goods, including essentials such as food, clothing and fuel, undermined the morale and the ability of the workers to devote attention and energy to complex political questions. This decline in the social weight and political activity of the working class deprived the democratic instruments through which the workers could have exercised control over the state bureaucracy (the soviets, the factory committees, the trade unions, and, above all, the Communist party itself) of an active and militant base of support.
Within the Communist party, a section of its leaders and cadres increasingly adapted to the petty-bourgeois outlook and authoritarian methods of the state bureaucracy. This section of the party found its leader in Joseph Stalin, the head of the party's administrative apparatus. Stalin used his administrative post as general secretary (which gave him authority over personnel assignments within the party and state apparatuses) to appoint those who would obediently serve the secretarial apparatus to leading posts throughout the party. With the exception of Lenin, the other Bolshevik leaders initially failed to recognise the danger Stalin's apparatus faction posed to the revolution, and in one way or another became complicit in its rise to power. The Stalinist faction sabotaged the measures that Lenin advocated to protect the Communist party from bureaucratic degeneration, and then, after Lenin's death, implemented policies that accelerated this process.
The Communist Left Opposition, formed at the end of 1923, took up Lenin's struggle against the rising Stalinist bureaucracy. But in the given conditions of the Soviet Union, the working class and its revolutionary vanguard were unable to block the consolidation of the Stalinist bureaucracy's hold over the Communist party.
The rising Stalinist bureaucracy, lacking any confidence in the revolutionary capacity of the workers in the capitalist countries, sought to make a virtue out of the Soviet Union's isolation. This was the meaning of its theory of ``socialism in one country.'' As the Stalinist bureaucracy gained control over the Communist Party of the Soviet Union, it used the CPSU's weight and prestige within the Comintern to convert its member parties into tools of the Kremlin's diplomacy, seeking class-collaborationist deals with imperialism. This in turn led to further defeats of the international revolution, prolonged the isolation of the USSR, and reinforced the conditions favouring bureaucratisation.
In order to maintain and expand its material privileges, the Stalinist bureaucracy increasingly restricted the democratic rights of workers. Since its ability to expand its privileged access to consumer goods depended on its monopoly of political power, the bureaucracy suppressed both soviet democracy and the internal democratic life of the Communist party. The soviets were transformed into ceremonial assemblies that rubber-stamped the bureaucracy's policies. Most of the leaders and cadres of the Communist party who had served under Lenin's leadership were expelled, jailed and eventually executed. The Communist party was destroyed as a revolutionary organisation of the working-class vanguard. It was converted into an administrative machine, a ``jobs trust'' of the privileged middle-class layers in the bureaucratic apparatuses of the state, economic enterprises, trade unions, and the party itself, which remained ``Communist'' and a ``party'' in name only.
These were the causes of the Stalinist bureaucracy's usurpation of the exercise of political power by the Russian workers, of the gradual merger of the party apparatus, the governmental apparatus, and the apparatus of economic management into a crystallised bureaucratic ruling caste, conscious that its interests were opposed to workers' democracy.
Far from being the result of Lenin's conception of the revolutionary party, the usurpation of power by the Stalinist bureaucracy was the result, in the extreme conditions facing an isolated socialist state in a backward country, of the disappearance of a decisive component of this concept — the presence of a broad layer of worker cadres, schooled in Marxist politics and supported by a politically active working class.
The political counter-revolution carried out by the Stalinist bureaucracy in the 1920s and '30s did not overcome the resistance of the Soviet working class to the point where private property was restored in the means of production. To the contrary, in order to expand its consumption privileges the Stalinist bureaucracy centralised the social surplus product in its own hands through the forced collectivisation of peasant farming, the nationalisation of all retail trade and light industry, and the subordination of production to a super-centralised system of bureaucratic planning.
Although the rise and consolidation of the Stalinist dictatorship in the USSR was the product of a political counter-revolution, the bureaucratic caste introduced reactionary tendencies in all fields of social life, including in the economy, in the social position of women, in the relations between nationalities, and in science and culture:
In the wake of the Soviet Union's victory over German and Japanese imperialism in World War II new socialist states were created in Eastern Europe, China and North Korea. But due to the Stalinist nature of their leaderships, privileged bureaucratic castes consolidated power in these newly formed socialist states and blocked the formation of a system of workers' democracy from their inception. In Vietnam and Cuba socialist states came into being in the late 1950s and early 1960s, respectively, that were under revolutionary leaderships. While bureaucratic deformations developed in these two socialist states due to the relative backwardness of their economies and to the influence of the Stalinist regimes upon them, they have not led to the usurpation of political power by a bureaucratic caste.
While the nationalised, planned economies provided the means for a rapid process of industrialisation and urbanisation of the Stalinised socialist states, all of which had been relatively backward countries before the overthrow of capitalism, this process of extensive growth of the productive forces was accomplished at the cost of tremendous and unnecessary waste of economic, social and natural resources.
Without a deepening of the workers' socialist consciousness and their active involvement in economic planning and management there is no way to produce quality goods in the transition from capitalism to socialism. But bureaucratic planning and management methods destroyed rather than encouraged working-class initiative, and undermined socialist attitudes to work. Thus, bureaucratic planning and management methods increasingly came into conflict with the task of modernising production in industry and agriculture to produce high quality goods, leading to a slowing down of economic growth, a deepening social crisis, and an erosion of confidence in the effectiveness of the nationalised, planned economy within the population as a whole.
In the face of this accelerating crisis, the bureaucracy sought to preserve its privileges by introducing more and more capitalist features into the nationalised, planned economy: organisation of the economy on the basis of profitability of individual enterprises; tying of incomes (of factory managers and even of workers) to enterprise profitability; a wholesale market for exchange of producer goods between state enterprises; autonomy of enterprise decision-making in matters of price, investment, and orientation of production; selling of shares in state enterprises through stockmarkets; auctioning off of state enterprises to private buyers. The bureaucratic caste thus began to dismantle the nationalised, planned economy, to wipe out the socio-economic foundations of the socialist state, and to prepare the way for a restoration of capitalism. Increasing elements of the bureaucracy sought through corruption, black-marketeering and embezzlement of state property to accumulate capital in their hands and, in open alliance with imperialism, set out to transform themselves into a new capitalist ruling class.
Stalinism was not a distorted, bureaucratic form of ``socialism,'' but rather a stage on the road to capitalist restoration. The Stalinist bureaucracy was a petty-bourgeois social stratum with interests hostile and opposed to those of the working class. It was bourgeois in its attitudes and aspirations, and was the chief transmission belt into the socialist states of capitalist ideological values: contempt for workers; desire for private enrichment; servility toward established authorities; racism and national chauvinism; reactionary views on women and the family; fear of unfettered debate; anti-internationalism; and even open anti-communism. It preserved socialised property only to the extent that it feared that the economic chaos and decline in living standards resulting from its abolition would lead to a revolt by the working class against the bureaucracy's monopoly of political power.
The longer it preserved itself in power the more the bureaucracy undermined any identification of the workers with the nationalised, planned economy, and thus weakened their ability to resist its inevitable attempt to transform itself into a new capitalist ruling class. However, once the bureaucracy made an open turn toward restoring capitalism it began to create the social conditions in which the working class could start to overcome its political atomisation and develop independent organisations of struggle.
In the course of struggles to defend their social and democratic rights, the workers can rapidly regain an understanding of the need to defend socialised property forms. However, the indispensable condition for a successful defence and revival of socialised property is the revolutionary overthrow of the political rule of the petty-bourgeois bureaucratic stratum and the establishment of a workers' democracy. This cannot be accomplished without the leadership of the most politically conscious and experienced workers, organised into a mass revolutionary party built upon Leninist lines.
The experience of Stalinism demonstrates that workers' democracy is not merely one ``model'' of political organisation of post-capitalist society; it represents the only effective means to consolidate working-class rule and to build socialism.