Just another signpost on another important question. Again, no citations and very rough. Special thanks to Jehu for asking the question in the first place via Twitter.
To what degree does the state control capital? Originally, the state was conceived in these terms – it was the instrument of capitalist exploitation (Engels) and the executive committee of the bourgeoisie (Marx). Many other Marxist theories of the state been developed since. Bob Jessop is one the of leading Marxist authorities on the state, just as an indicator.
Leaving that point aside, if monetary or exchange control is examined then the relationship of state to capital becomes a little more clear. The United States of America enjoys a privileged position in world politics due to the USD being effectively the world reserve currency. Many smaller states use the USD as their own currency, and the USD is traded and accepted globally as legal tender even in nations where this is not the case. US economic preponderance owes a lot to this development, and the US takes a dim view to states attempting to challenge it directly (e.g. China).
The EU is another case, where the Euro acts as the effective reserve currency of Europe and is legal tender in almost every member state integrated into the internal market (the UK being a notable exception). Similar to the US, some smaller states use the Euro as their own currency. The EU differs from the US in that it is a supranational arrangement where no one state, officially, dominates the agenda. In reality, the old Continental powers of France and Germany, particularly the latter, exercise inordinate influence in the EU. The Euro developed out of the European Economic Community, set up in 1957 with the Treaty of Rome, which paved the way to the creation of a single internal market (the Eurozone).
The difference between the USD and the Euro is that the latter is a global reserve currency whereas the Euro is mainly, but not exclusively, regional. The Euro is the second most important currency in the world, which is nothing to dismiss. All other nations in the world are subject to the two reserve currencies according to various regimes – floating exchange rates and other monetary policies. In this sense, the difference between a superpower or a supranational union and a single state is significant indeed.
So what this means about the state and capital is this: in a superpower the state and capital are bound tightly together, control over monetary policy is ironclad, a cornerstone of its economic preponderance. Other states who cannot hope to match the superpower on their own must band together into supranational unions and develop a single internal market with a single currency. Lesser states who join that arrangement are subject to the influence of the larger states within, but aren’t as vulnerable as they would be on their own. The relationship between state and capital is diffused into a bureaucratic mechanism which mimics (unsatisfactorily) the arrangement of a superpower – tight monetary control. Other states, struck out on their own, have less control over their monetary policy and as a result less control over their own economies. More controversially, this melding of state and corporate power in the US and EU has distinct fascist overtones.
Consequently, a superpower and a supranational union are less subject to the whims of nominally ‘free’ market forces. However, when crisis grips their economies it effects the entire world; it threatens to collapse the global economy. This explains why Russia has made moves to construct its own Eurasian Union, though without much success, and why China seeks to construct its own international organizations which parallel the World Bank and the IMF. Both are attempts to secure greater control over their own economic conditions.
It can also be seen how the EU was an attempt by the national bourgeoisies of Europe to a) avoid another disastrous Europe-wide war, b) counter the economic preponderance of the US and thus the US bourgeoisie, and c) provide an economic bloc counter to the Warsaw Pact and the USSR. The relationship between state and capital is tightest where the greatest capital can be found. This should be possible to demonstrate in empirical terms.
I wrote this up in order to consolidate a few threads that have been dragging behind me for a while. I’m still far from being able to demonstrate all of this satisfactorily, and it’s undoubtedly wrong in some areas since this is constructed entirely from memory of sources I read (some of them years ago), but with those caveats in mind I decided to post it here as a kind of signpost of where I am in regards to the question of the USSR and the Cold War. It is extremely rough, and lacks citations, and I make no apologies for that seeing as it basically would have been hidden away in one of my notebooks if it weren’t posted here.
Lets nail something down first: the USSR’s ‘state capitalism’ != capitalism in the West. That’s a point so-called value form critiques ignore. It’s character was fundamentally different, i.e. there was a quantitative difference. Value form critiques ignore the significance of this because all they see is qualitative similarities, and thus capitalism in the form of the ideal total capitalist embodied in the Soviet state.
Another point: far from consolidating a new ruling class, the purges weakened the USSR to the point that, if Stephen Kotkin is to be believed, Stalin did not receive foreign intelligence reports for over 100 days at one point. I.e. he was effectively blind. In a roundabout way, the purges effectively set back the development of a semi-autonomous class by decades. It wasn’t their purpose, but that’s what it accomplished. This goes heavily against the accounts of a united and consolidated ruling class in the USSR from the time of Lenin onwards.
This doesn’t make Stalin a positive force in the USSR. Quite the opposite. Everything he accomplished could have been accomplished without him, and a lot more good Bolsheviks like Bukharin could have lived and achieved their full potential. Lenin set the whole thing in motion, all Stalin could do was run with it and set himself up as Lenin’s natural successor as the good student of the master. In turn, Stalin’s successors had to deal with this legacy. It was an endless accumulating weight of tragedy and historical inertia away from Lenin and the original Bolsheviks.
Case in point: the 1928 Five Year Plan was the last major attempt at economic reform in the USSR’s history until Gorbachev. It’s difficult to overstate the significance of this. Everything outside of heavy industry (which incl. the military) was conducted on a shoe-string budget – even the space race. Light industry and agriculture suffered the worst, with well-known results: a crisis of overproduction in heavy industry and underproduction and underdevelopment everywhere else, which trading in hard currencies bartered from oil etc. could not change. In other words, the same ‘capitalist’ crisis with a different character.
So the label of ‘state capitalism’ obscures more than it explains. Indeed it functions as a way to shut down debate about the USSR’s true significance and history. It cannot explain the Cold War. It’s classification of the USSR as a form of capitalism is correct, but it ignores fundamental differences and incompatibilities between the USSR and the ‘original’ form of capitalism in the West. Very early on in the Cold War, the US State Department, influenced by George Kennan, shut down the idea of economic cooperation between the two superpowers. Not only was it Russian “neurosis” that stood in the way but the fundamental fact that communists were “traitors”. The Marshal Plan was partially rejected by Stalin for the simple reason its multilateral economic features were incompatible with the Soviet economy; and in hindsight, it’s clear the US deliberately constructed the Plan in this way so it would be rejected. Containment, advocated by Kennan, was in motion from 1946 onwards.
Here we can see why the Cold War started between two ‘capitalist’ superpowers. From a fundamental economic incompatibility, which saw the Ruble remain worthless outside the Bloc states, to an ideological incompatibility – the USSR was rightly considered a form of Marxism, even with a particularly neurotic character. Value form critiques cannot account for this as they don’t consider Marxism-Leninism as legitimate. If the object of your analysis is a priori illegitimate, then any kind of conclusion will be shaped by this view – it’s bordering on the tautological.