Andy Blunden, 27th March 1991

“Planned Economy and Workers Control”

To any Marxist it is self-evident that what collapsed recently in Eastern Europe and the Soviet Union was not socialism or planned economy or Marxism, but bureaucratic centralism, command economy and Stalinism.

We know that there is nothing in common between Marxism and Stalinism, and that bureaucratic-centralist command economy was imposed upon the Russian Revolution only by means of the political and physical obliteration of Marxism.

The fraudulent equation of Marxism and Stalinism is nowadays conventional wisdom, not only in the domain of the capitalist TV networks, but among the people of Eastern Europe who have had this abomination stuffed down their throats by the bureaucracy for decades. This is a real problem, and no doubt all of us devote a considerable amount of energy combatting this fraud.

However, when we say that the Marxist view of economic planning and control, under socialism or during the transitionary period under the dictatorship of the proletariat, is not command economy, “statism” and bureacratism, then we have to recognise that there is currently no Marxist theory of proletarian economic management.

Lenin’s State and Revolution, a defence of Marx’s views against reformist misrepresentation, like the originals written in the nineteenth century by Marx and Engels, is extremely abstract and indicates only the broadest outlines and principles, and does not touch upon the problems that have arisen since 1917.

Economy during the period from the insurrection in 1917 until the institution of the New Economic Policy in 1923 was totally subordinated to the requirements of Civil War. The end of the Civil War and the collapse of ‘military communism’ meant that the issues of economy under the dictatorship of the proletariat were to be confronted for the first time. The first result was the NEP.

Even before the inception of the NEP, all the conditions which led to the growth of bureaucratism and the degeneration of the revolution were already fully developed.

Trotsky’s writings over the next decade criticising the policies of the Soviet regime under Stalin are an important contribution towards a Marxist theory of economy in a workers state, but do not go further than criticisms and proposals in relation to various problems, and are all confined to the problems of developing an enormously backward and war-devastated economy.

In Revolution Betrayed, Trotsky makes a finished analysis of the social basis of the Stalinist regime and exposes the fraudulent nature of Stalinist economic theory. Again, however, this does not, and could not go so far as an actual Marxist theory of proletarian economy.

Obviously the Marxist theory of economy under dictatorship of the proletariat cannot be developed except in connection with the relevant practice of building a healthy workers state and it would be false to propose that we develop such a theory.

However, it would be equally false to suppose that we cannot go further than the abstract propositions of for instance, Engels’ Socialism Utopian & Scientific written in 1877, or Lenin’s State and Revolution written in 1917. The experience of 70 years of bureaucratised workers states, and the experience and theoretical gains of capitalist economics, and the struggle of the organised working class in the capitalist countries over the past 70 years offers us considerable scope for the development of such a theory.

The collapse of Stalinism is premised above all on the economic crisis which led ultimately to a state of economic senile dementia. It is impossible to understand or analyse this crisis, far less transcend it with a new social revolution without a counter-theory to those of Stalinism and bourgeois economic theory. To counter the restorationism of Yeltsin or Welesa or ‘market socialism’ of Gorbachev with well-known truisms from the nineteenth century would be puerile in the extreme and the shortest route to oblivion for Marxism.

Equally, it would be foolhardy to work towards the seizure of power by the working class in the advanced capitalist countries, in the hope of improvising something on the day, without a critique of all existing economic theory which will prepare the basis for a system of society more advanced than what has gone before.If we agree that we have some work to do in this area, and that no one else is going to do it, then we need to look closely at some of the concepts we use and some of the positions that the Trotskyist movement has adopted in the struggle in the workers’ movement in the past, which may have been affected by the marginalisation of Trotskyism by Stalinism.

planned economy

What is the essence of the concept of planned economy as it exists in Marxist theory?

It is certainly not state or bureaucratic regulation or command economy as found in the Stalinist and capitalist economies.

‘planned’ economy is often contrasted with the ‘anarchy’ of capitalist productin, and this tends to imply that the conception of socialist economy as equal to command economy is valid. For instance, in Socialism Utopian & Scientific: ‘Socialised production upon a predetermined plan becomes henceforth possible ... as anarchy in social production vanishes, the political authority of the state dies out.’

In Lenin’s State and Revolution, the following description of the first phase of communist society gives a picture of Lenin’s conception:

‘Accounting and control - that is mainly what is needed for the “smooth working”, for the proper functioning, of the first phase of communist society. All citizens are transformed into hired employees of the state, which consists of the armed workers. All citizens have become employees and workers of a single country-wide “syndicate”. All that is required is that they should work equally, do their proper share of work, and get equal pay. The accounting and control necessary for this have been simplified by capitalism to the utmost and reduced to the extraordinarily simple operations - which any literate person can perform - of supervising and recording, knowledge of the four rules of arithmetic, and issuing appropriate receipts.

‘When the majority of people begin independently and everywhere to keep such accounts and exercise such control over the capitalists (now converted into employees) and over the intellectual gentry who preserve their capitalist habits, this control will really become universal, general and popular; and there will be no getting away from it, there will be “nowhere to go”.

‘The whole of society will have become a single office and a single factory, will equality of labour and pay.’

It will observed that the above excerpt is in fact not at all compatible with Stalinist command economy, and has the advantage of pointing towards transitional forms by which the working class can open the way to the overthrow of capitalism.

The essence of the idea of planned economy is contained in the collective struggle of the working class to exercise its control over the capitalists .

Owing to its social position and the nature of the productive forces, there is an inherent tendency for the working class, to strive towards collective action at the widest possible level. Such a struggle inevitably leads to the expropriation of the capitalists and the abolition of capital as such, and has as its inherent aim production for need as opposed to production for profit.

Under conditions when the working class has been excluded from political power by its own state machine, the ideas expressed as in the above quote from Lenin, have been replaced with conceptions of an economy based on bureaucratic administration and regulation.

In this same chapter Lenin emphasises that it is not a question of ‘defining’ socialism, or of ‘introducing’ socialism, but of giving an analysis of the stages through which society must pass, stages of ‘the economic maturity of socialism’, ‘economically and politically inevitable in a society emerging out of the womb of capitalism’. The passing of state power to the working class marks a discontinuity in that process.

Capitalism has evolved a system of economy - the anarchy of the market, within social and political conditions guaranteed by the capitalist state, accumulation of capital, money, credit, etc. This system is the fundamental basis of the maintenance of rule by the capitalist class, and the oppression of the working class; liberation of the working class and the achievement of socialism is of course synonymous with the abolition of this system.

However, the seizure of state power by the organised working class by no means guarantees a successful transition to socialism, which cannot be facilitated by the ‘abolition’ of the market, and the ‘introduction’ of planned economy. The experience of the last 70 years must now be utilised to further develop our understanding of the stages through which bourgeois relations can be transcended.

‘If really all take part in the administration of the state, capitalism cannot retain its hold. The development of capitalism, in turn, creates the preconditions that enable really “all” to take part ...’

The greatest single barrier to the transition to socialism is the counter-revolutionary struggle of the capitalist class carried out on an international arena, isolating, blockading and in every way undermining conditions for social progress. There is absolutely no possibility of progress towards socialism without the major part of the world’s productive forces united in a single socialist economic bloc, and our strategy must be based on this fact.

workers control

There are a number of different ideas contained within the concept of workers control - workers co-operatives, as have existed in occupied factories for instance in Italy or Britain, where employees effectively act collectively as a capitalist; state control or regulation, with universal adult franchise or some other means of the population expressing its control over the state apparatus; interest group, employee or other representation on management bodies.Once the fetishistic idea of the exclusive right of the owners of capital to exercise control over the means of production is set aside, the concept of workers control may extend over the whole range of social activity. Initially, it must express the struggle of the producers to wrest control of production away from the capitalists.

The control exercised by capitalism over production comes chiefly from two different directions - from the top-down diktat of the owner or whoever holds the purse strings; and from the outside-in, via the constraints of the market, with or without the active intervention of the capitalists.

Workers control over production pre-supposes the ability of the working class to overcome the pressure of the bourgeoisie from these two directions, and deal effectively with social and political problems arising from the mediation of workers control by representative or other organisations. There is clearly no socialism without overall workers control, and workers control can only be ephemeral, partial and unstable under capitalism, Nevertheless, the struggle to establish, extend and make more effective forms of workers control under capitalism, is a necessary step towards the overthrow of capitalism and the preparation of the pre-conditions for socialism.

Consequently, there is reason for us to re-look at the tendency of many of us Trotskyists to look askance at the struggle for workers control under capitalism. It seems that if we cannot expose and wage a fight against spurious forms of workers control under capitalism in favour of more thorough-going workers control, then we have no hope of progressing towards genuine workers control in the event of a siezure of state power by the organised working class either, nor for that matter of explaining to the workers why they shouild sieze power.

Also, I think we need to have a discussion around some of the issues raised mainly in the USec around the concept of ‘workers self-management’, and different demands that have been raised in the past both in Eastern Europe and countries gaining their liberation from imperialism, and seeking more democratic forms of economic control and some point in their development.

How is rule by the organised working class reconciled with the need for large scale economic planning and co-ordination, if we accept that mediation of this process by a state bureaucracy can be problematic? Here we have the intersection of the political and economic problems at its sharpest.

I think it is possible to say that we must pre-suppose a conflict between any local or sectional grouping of the working class, with the workers state, and that we have to think in terms of democratic forms of struggle within the class, which are as applicable to straight economic questions as they are to political questions of less obvious economic content.

the market

The market, i.e. the exchange of commodities between independent producers, cannot be abolished by a political act. Transcendance of market relations will take a comparatively long drawn out historical period.

During this time, the market plays a vital role, not least of which is its role as a mechanism of democratic control by the mass of consumers over the minority of producers. At the same time, as the transmission medium of bourgeois social relations and thus of bourgeois ideology, it is the ever-fertile breeding ground of counterªrevolution.

Gorbachev, in typical Stalinist fashion seeks to simply abolish the bourgeois nature of the market with words. Needing a market, the Stalinists only discuss how to create a new bourgeoisie, or whether imperialism can do it for them.

We need to discuss how the market can be overcome by workers control if the workers hold state power. We have the benefit of many decades of the negative experience of price fixing, the monetary and fiscal policy of various reformist and other capitalist governments as well as the corrupt methods of self-deception usually practiced in the deformed workers states.


How is the explosion of initiative and enterprise that a social revolution makes possible to be made the foundation of an economy controlled by the working class? What is the essential reason for ‘public enterprise’ being so conservative in the cuurent world situation, as opposed to ‘private enterprise’?

We need to think about economic forms which can give expression to the creative capacity we see in the organised working class when it mobilises, and maintaining that creative energy indefinitely.

In Marx’s day, he wrote withering criticisms of the economic theory of political opponents such as Proudhon and F. Lassalle and these works have formed vital components of Marxist theory. We need to do popular and comprehensive criticisms of the economic theories of orthodox Stalinism, the ‘market socialism’ — Stalinists like Gorbachev, the Greens with their neo-Proudhonist theories, and develop economic criticisms of reformist governments such as Hawke’s. We must produce criticisms which give expression to our intention to challenge them for power.

Australia had a Labor government in Queensland in 1899, before the British Labour Party had even been formed; a basic ‘family’ wage has been guaranteed by law since 1907. While there can be no workers control of the economy other than that made possible by the seizure of public political power by the working class, this certainly cannot be taken for granted. We should perhaps pay more attention to agitation against the usurpation of power from the working class by reformist governments, and find practical ways to lead struggles to gain greater control. Only out of such struggle can the need for and possibility of social revolution arise.

We need to pay some serious attention to some of the transitional problems. Having rejected ‘socialism in one country’ and ‘peaceful competition between different social systems’ a la Khrushchev, we obviously cannot just leave it at ‘world revolution or bust’. The contradiction between the need of the productive forces to develop on an international arena, and the need for the masses to gain political control at a national level is probably the principle contradiction of today. We should start thinking about this.

Capitalist social and economic relations presume the constant revolutionising of the techniques of production. To what extent is the conception of socialism as a state of society in which such revolutionising has ceased and production and distribution reduced to a process of simple reproduction relevant or valid?

I have here asked many more questions than I have even attempted to answer. If we all address ourselves to questions like these I believe Trotskyism may become a powerful force. If however, we confine ourselves to truisms, slogans and cliches, then we shall rightly be left behind, as a curiosity for the amusement of future historians.