First published: January 1995
The most important strategic debate in the international labour movement since Marx and Engels was that which took place between Stalin, Bukharin and Trotsky in the Soviet Union in the 1920s. The fundamental issue at the core of that debate was Stalin and Bukharin’s strategy of ‘socialism in one country’. Although Stalin resolved the debate by liquidating his opponents, he could not liquidate the real contradictions which gave rise to the conflict. Those remain the fundamental driving forces of the crisis which has unfolded in Russia since Yeltsin came to power in August 1991. As the Russian working class faces a struggle with capital today as desperate as 1917 and 1941, the starting point for a theoretical understanding of that struggle remains the issue of socialism in one country.
The issue of ‘socialism in one country’ is the most fundamental question of socialist strategy in the twentieth century. Trotsky regarded this issue – not, for example, democracy or the popular front – as the fundamental point of divide between Stalin and Bukharin; between what he called ‘national reformism’ and Marxism.
The starting point of Trotsky’s analysis of socialism in one country is the most classical position of Marxism – that each transition from one mode of production to another is made necessary by a constraint upon the productive forces. As Marx put it: ‘At a certain stage of development, the material forces of society come into conflict with the existing relations of production…’ (Preface to A Contribution to the Critique of Political Economy). One of Trotsky’s first books to be published in English, The Bolsheviki and World Peace, starts with the simple statement: ‘the forces of production which capitalism has evolved have outgrown the limits of the national state’. The present political form is too narrow for the development of the productive forces.
That contradiction, between the international division of labour and economy and the national state, manifested itself with immense violence in the First and Second World Wars – fought for the re-division and domination of the world economy between national capitalist states.
Nonetheless, the fact that this has transpired to be the most fundamental of all questions in the development of the productive forces under capitalism was not fully appreciated until the recent events in the Soviet Union.
But the disintegration of the Soviet Union confirmed that the content of the class struggle at its most fundamental level in the present epoch can be summed up as: which class will succeed in organising an international economy? Whichever class succeeds in this will come out on top.
What is the evidence for this assertion? We will look first at the negative evidence and then at Trotsky’s examination of the question of socialism in one country in its internal effects inside the Soviet Union and on foreign policy.
Consider the relationship of the countries of Eastern Europe and the former Soviet Union with capitalism. It is obvious that a major crisis developed in these states. From what did it flow?
It was not because ‘socialism in one country’ was less productive than ‘capitalism in one country’. This has been settled not merely in theory but in practice. In every case in Eastern Europe the re-introduction of capitalism has led to a catastrophic fall in production.
We will leave aside East Germany – where 70 per cent of industry has been wiped out – because the fixed exchange rate imposed when the former GDR had only 40 per cent of the level of productivity of West Germany was bound to lead to collapse.
The cases of Poland, Hungary, and Czechoslovakia are a clearer test. The impact in Poland was a 30 per cent drop in industrial production, a fall in real wages of 30 per cent, and there are similar figures for the other countries. The IMF estimated that these countries would not recover to 1989 living standards until 1996, and in Yugoslavia, Bulgaria and Romania not until the next century.
In short, there is no evidence that a workers’ state in one country is less effective than capitalism in one country.
But the decisive thing is that the non-capitalist states confronted not merely ‘capitalism in one country’, but an international capitalist economy. Since the Second World War the capitalists have succeeded in organising a rather rickety but nevertheless real world economy. It is essential to grasp the significance of this fact.
It is quite fashionable to talk about inter-imperialist competition. But it is to destroy all sense of historical seriousness to believe that what has taken place since 1945 is profound inter-imperialist competition. On the contrary the situation was characterised by the lack of serious inter-imperialist competition, a fact which was rooted in the high levels of profit, the hegemony of the United States and the loss of the Soviet Union and China in the course of two World Wars.
The type of inter-imperialist conflicts in the 1970s and 1980s, over textile tariffs, the Common Agricultural Policy, European Union or the trans-Siberian gas pipeline from the Soviet Union to Western Europe are comparatively piffling affairs.
Inter-imperialist or inter-capitalist competition in the nineteenth and early twentieth centuries produced the following conflicts: the war between France and Austria for hegemony over northern Italy; the war between France and Prussia to construct the German state; the war between Prussia and Austria over hegemony within Germany; the Crimean war between Russia, France and Britain; the First World War; the Japanese invasion of Manchuria; the Italian invasion of Abyssinia; and the Second World War. These are serious examples of inter-imperialist competition.
Compared to these, recent disputes are roughly in the proportion of a flea to an elephant. Serious comparison has to be quantitative. On that basis we have to conclude that inter-imperialist competition has been at such a low level that it has practically not existed from the point of view of shaping events in the post-war period.
In fact what characterised the 1970s and 1980s was the most extraordinary example of inter-imperialist collaboration to sustain the US-led arms drive against the Soviet Union. There is no doubt that the decisive thing that cracked apart the Soviet Union was the formidable pressure placed upon it by the US’s armaments build-up during the 1970s and 1980s.
The single most important class struggle in Europe in the 1980s was that over the deployment of Pershing and Cruise missiles into Western Europe.
It was the inability of the West European working class to stop that which made the Soviet leadership decide that it had to come to a deal with the west.
If the working class of Western Europe had been successful in stopping the deployment of those missiles then the course of events in the Soviet Union would have been quite different. Gorbachev only won the general secretaryship of the CPSU by one vote!
What made this US armaments drive possible? It was not the internal resources of the United States. The US is incapable of sustaining such a drive – it has neither the necessary level of savings nor investment.
But in the 1980s a trillion dollars flowed into the United States; Japan contributed $300 billion. The newly industrialising countries contributed over $100 billion. The so-called third world contributed $400 billion.
If the Soviet economy had received a subsidy of $100 billion a year for a decade it would be shooting ahead on a scale that would leave the United States far behind. Thus behind the minor inter-imperialist squabbles of this period there lay a collaboration embodied in this colossal transfer of wealth.
But this could not continue indefinitely. Indeed one of the issues posed by the destruction of the Soviet Union is the possibility of serious inter-imperialist competition re-emerging. The differences between Britain, France, Germany and the US over Yugoslavia mark a new degree of inter-imperialist conflict. But nevertheless the lack of inter-imperialist rivalry in the 1970s and 1980s had profound negative consequences.
What did this mean for the quantitative relation of forces? The Soviet economy was a big economy – the second or third largest in the world depending on how you do the calculations. The IMF estimated Soviet GDP in 1990 as of the order of $2000 billion including the service sector – about equal to the size of the Japanese economy and half that of the US.
But measured against the international capitalist economy as a whole, the Soviet economy was tiny. The net output of the world capitalist economies as a whole in 1990 was $17-18 trillion. Thus the Soviet economy was only about a seventh or eighth of the size of the world capitalist economy.
To the degree that this capitalist international economy was held together, that created a relation of forces with the Soviet economy of an entirely different order to that with any individual capitalist state in isolation.
Nevertheless, Stalin succeeded for a period in advancing with socialism in one country. Why?
It is because Stalin himself never confronted capitalism as a world system. He confronted, not an international capitalist economy, but capitalism in one country, or, more precisely, capitalism in various empires.
The history of the 20th century is divided into three big periods in this regard. The first, before the First World War, was the steady internationalisation of the world economy. This collapsed in the 1914–1918 war.
The second period, from 1918 to 1929, was one in which world trade was a much lower proportion of GDP. This collapsed even further between 1929 and 1939. For example UK foreign trade was 30 per cent of GDP in 1913, but by 1938 it had fallen to only 12 per cent, a drop of almost two thirds.
Thus in the inter-war period the world capitalist economy disintegrated into a series of warring capitalist economies with Germany, Japan, USA, Britain, France all protected by tariffs and not engaged in major transfers of capital with each other.
The third period followed the Second World War. The world economy was reconstructed under the hegemony of the US and an international market was progressively developed where gigantic flows of capital took place.
The Soviet Union was a very small economy compared to this world capitalist market taken as a whole.
For example, in the international capitalist economy there are now only two serious producers of airliners, Boeing and Airbus, and they sell into a market of $17 to $18 trillion. The Soviet Union built its own civil aircraft, but sold into a market of only $2 trillion, a seventh of the size.
Take computers, the market for personal computers was built up in exactly ten years. One company dominates the manufacture of personal computer chips – Intel.
Production in the Soviet economy was only a tiny fraction of what was possible in the world capitalist economy.
That is the economic reality which makes the theory of socialism in one country in the most strict sense ‘a reactionary utopia’. It is a utopia because it cannot be achieved. You cannot achieve, in an economy one seventh or one eighth the size of the world capitalist economy, the division of labour and scale of production which can be achieved in the world capitalist economy as a whole.
It is reactionary because the consequences of trying to achieve it undermine the whole revolutionary process. It is a classic example of the dialectic, that you cannot stay in the same place, you either go forward or you go backward. The attempt not to go forward, to preserve the status quo rather than try to spread a non-capitalist mode of production to the rest of the world, inevitably meant going backward.
In fact, to be precise, the theory of socialism in one country is a pre-bourgeois theory: it does not even reach the level of bourgeois thought. The founding work of classical bourgeois economics published 200 years ago is Adam Smith’s The Wealth of Nations. The purpose of this book was to convince the British government to abandon the attempt to have a self-enclosed economy and instead to embark on an international division of labour buying and selling goods abroad.
From a theoretical point of view the theory of socialism in one country is a regression from that starting point of classical bourgeois economics back to the idea of self-contained production in a single state.
The whole point of Adam Smith’s book was that the division of labour acquires its greatest level of development on the international not the national scale.
If the theory of socialism in one country is utopian from an economic point of view, the attempt to apply it had extremely reactionary consequences.
Firstly, it leads to a total misunderstanding of the nature of the Russian Revolution itself, a complete failure to understand why the revolution took place in the first place and what would be the consequences of its overthrow.
The Menshevik view, which was revived after 1989 by groups like the Democratic Left, was that it was a mistake to have a socialist revolution in Russia. This view says Russia was not ripe for socialism, the productive forces were not developed enough, it was a peasant country, the proletariat was only 10 per cent of the workforce and the revolution should take place first in the most developed country.
But the revolution did not take place in Russia because people thought the productive forces were more developed than they were. As Trotsky put it in The Revolution Betrayed: ‘Russia took the road of proletarian revolution, not because the economy was the first to become ripe for socialist change but that she could not develop further on a capitalist basis. Socialisation of the means of production had become a necessary condition for bringing the country out of barbarism.’
If there had not been a Russian Revolution, Russia would have been torn apart during the First World War or after it by the two more powerful imperialisms to its west and east. Japan had already defeated Russia in the war of 1905 and would undoubtedly have seized the eastern part of Russia. Germany crushed Russia in the First World War and demonstrated in the Second World War its dynamic of expansion into the USSR from the west.
This is why the Russian Revolution was able to attract not merely socialists but democrats and even the cultural intelligentsia in Russia – because if the October Revolution had not taken place the country would have been enslaved and broken up.
As Trotsky put it in 1929, the Soviet system with its nationalised industry and monopoly of foreign trade, in spite of all its contradictions, was a protective system for the economic and cultural independence of the country. This was understood even by many democrats who were attracted to the Soviet side, not by socialism but by a patriotism which had absorbed some of the lessons of history. To this category belonged many of the native technical intelligentsia as well as the new school of writers.
One sees this more clearly when recent events are seen from a Russian point of view. For example, when people were tearing down the statue of Dherzhinsky outside the KGB headquarters, British TV showed a war veteran telling them: ‘I can tell you, I am a historian, Lenin and Dherzhinsky saved the country. This statue should be there for ever.’
That is an aspect that one doesn’t generally see. One sees Lenin as a towering figure of the international proletarian revolution, and that is his first claim to fame, but, in addition, from the point of view of Russia he is a great national figure. Because the Russian people would have been enslaved by Germany to their west and Japan to their east were it not for the 1917 revolution.
This was also the case in 1941. The struggle to prevent the country being subjected to foreign domination was an entirely progressive struggle notwithstanding some of the methods used by Stalin to execute it.
This reality reflects the fact that taking Russia in isolation it would be impossible to understand either why the revolution took place at all or what would happen today if capitalism were to be restored there.
What is happening is that Russia is being inserted into a world market in which there is no place for its goods. Thus the IMF proposes that the Soviet Union become a supplier of raw materials to the rest of the world.
These proposals demonstrate why the October Revolution occurred in the first place – because the international pressure of imperialism would have prevented, and now would destroy, the development of the productive forces in Russia.
This dictated Trotsky’s attitude to the defence of the Russian Revolution, not merely from the point of view of socialism, but from the point of view of Russia.
As he put it: ‘In their appraisal of the possibilities and tasks of the Soviet economy Bolshevik-Leninists take as their point of departure the real historical process, its world relations and living contradictions. Only the foundations that have been laid by the October Revolution can guard the country from the fate of India or China. Without a planned economy the Soviet Union would be thrown back for decades.
‘The fall of the bureaucratic dictatorship, if this were not replaced by a new socialist power, would thus mean a return to capitalist relations with a catastrophic decline of industry and culture.’
The second objectively reactionary consequence of the attempt to build socialism in one country was that it distorted the entire economic framework within the Soviet Union.
As Trotsky put it: ‘The productive forces of capitalist society have long ago outgrown the national boundaries, to aim at building a nationally isolated socialist society means in spite of all passing successes, to pull the productive forces backward even as compared with capitalism.’
From Stalin, the official ideology of the Soviet Communist Party was that the Soviet Union could build a fully developed socialist society within its borders. This was the basis of the absurd pledge of Khrushchev that they were going to build communism in the Soviet Union by 1980. That was actually written into the programme of the Soviet Communist Party!
But in fact the more the Soviet economy developed, the more it became constrained by its isolation and the far greater division of labour in the world capitalist economy.
Even in the 1950s, let alone the 1930s, there were still half a dozen firms making aircraft in Britain. Today there are only two – Rolls Royce and British Aerospace – one producing engines and the other producing parts for Airbus.
Thus as the Soviet economy developed it ran more and more into the constraint of the limited scope of its division of labour.
The conclusions flowing from the fact that international capital cannot be overtaken by building socialism in one country are not that nothing can be done. On the political field the working class comes to power first, not where capitalism is most developed, but where its contradictions are most acute. But in order to advance it means that the most important thing is to spread the revolution, otherwise it will finally be rolled back.
This did not mean waiting for the revolution to spread. The theoretical conclusion that you cannot overtake capitalism in one country leads to definite priorities and action on the international economic field. Equally, the wrong perspective of the Soviet Communist Party that a fully developed socialist society could be built in one country led to the wrong internal economic and political choices.
The attempt to construct a self-contained socialism in one country distorts the entire economy. It means absolute priority to heavy industry – dams, steelworks, power stations and so on – at the expense of the production of consumer goods.
If it were possible on this basis to overtake capitalism, the sacrifices involved would be merely temporary and therefore rational.
If, however, the Soviet Union by itself could not catch up with, let alone overtake capitalism, then it would remain permanently locked in the phase of building steelworks, dams and coal mines. That is exactly what happened. Tremendous development of the means of production, vast heavy industries, but acute shortage of refrigerators, housing, quality foods, consumer services – of everything necessary to improve the life of the proletariat.
Trotsky, writing about the impact of Stalin’s economic priorities, vividly described these processes. He said the composers of the plan proclaimed that it was their task ‘to lift up the country to a new and hitherto unseen high level of material and cultural development. In actuality the shortages in commodities have become unbearably acute, the supply of bread has sharply decreased, meat and dairy products have become rarities, in the midst of newly constructed factories, plants, mines, electric stations, collective and Soviet farms the workers and peasants begin to feel more and more as if they are in the midst of gigantic phantoms indifferent to the fate of humans.’ That is a brilliant description of what the workers in Eastern Europe and the Soviet Union felt sixty years later.
If, conversely, you believe it is utopian to aim to build socialism in one country, then the most important task becomes to raise as rapidly as possible the living standards of the working class. This is exactly the way that the Cuban leadership, for example, is responding to the attacks on Cuba. Not by saying you must tighten your belt so we can produce ten thousand more machine guns. Because what motivation will the working class have to use the machine guns if their living standards are given no priority?
The contrast between the destruction of Saddam Hussein’s 3,500 tanks, compared to the total mobilisation and final victory of the Vietnamese over the US, shows the difference which the morale and commitment of the workers and peasants makes even on the military field.
Again, Trotsky put it: ‘Socialist construction is a task for decades. One cannot guarantee the solution of this task except by a systematic advance of the material and cultural living standards of the masses. This is the principal condition more important than the gain in time in the construction of a Dnieprosstov, a Turksib or a Kusbass, [big projects of Stalin’s industrialisation – ed.] because with the fall in the physical and moral energy of the proletariat all the gigantic enterprises may lack a tomorrow.’
That was indeed what happened in the Soviet Union. Instead of trying to raise their living standards the consequences of socialism in one country alienated the working class from production. It made the economic situation worse and worse. It was not neutral or indifferent.
Nowhere was this clearer than in the consequences of socialism in one country for agriculture – the catastrophe created by forced collectivisation started in 1929 by Stalin. It is often claimed that Trotsky favoured extreme administrative methods and was no different to Stalin in this respect. But Trotsky’s total opposition to the forced collectivisation of agriculture is the clearest refutation of this.
There is a view, among even some of Stalin’s critics like Isaac Deutscher, that forced collectivisation was a step forward. What Trotsky said at the time was: ‘An exaggeratedly swift collectivisation took the character of an economic adventure. Twenty-five million isolated peasant egoisms, which yesterday had been the sole motive force of agriculture, the bureaucracy tried to replace at one gesture by the commands of 2,000 collective farm administrative offices lacking technical equipment, agronomic knowledge and the support of the peasants themselves. The dire consequences of this adventurism soon followed.
‘Fifteen million peasant farms have been collectivised and ten million private enterprises have been deliberately placed under such conditions so as to hide the superiority of primitive small-scale farming over purely bureaucratic collectivisation. Thus by means of combined methods the bureaucracy succeeded in weakening if not killing all stimulus for work amongst the peasantry. The harvest of crops even previously extremely low began to drop ominously. From season to season the supply of raw materials to industry, of food to the cities worsens catastrophically.’
This was Trotsky’s view of the forced collectivisation, and 60 years later the Soviet economy had still not recovered. Just to give an indicator, in 1990 97 per cent of all Soviet farms were collectivised, while peasant plots accounted for only 3 per cent, but that 3 per cent of the land produced 50 per cent of the total agricultural output by value.
Even making allowances for the fact that more value-added crops were cultivated on the peasant plots, this illustrates the scope of the disaster caused by forced collectivisation.
For the economy as a whole, socialism in one country was an attempt on an adventuristic basis to supersede the laws of economics. Competition in the world market, the dominant world economy, takes place on the basis of prices. This is merely the application of the labour theory of value. What determines relative prices is the socially necessary amount of labour time to produce something.
In conditions other than communism, where there is an abundance of everything, commodity relations can no more be administratively suppressed than the family or religion. The labour theory of value cannot be abolished by decree.
If an economy tries to isolate itself from the world market its pricing system will be totally distorted. That was the great problem of the Soviet Union: nobody knew what anything cost. That undermined planning because without knowing what things cost it is impossible to plan rationally. In Marxist terms labour time is wasted.
The most striking example of this was oil pricing. The Soviet Union under Gorbachev had a shortage of oil to export – the one thing it can sell on the world market.
That sounds like a problem of physical production. But in fact it had nothing to do with technical problems. It was because the price of oil in the Soviet Union was set at one fifth of the world price. This then influenced the entire economic structure of the country. For example, the price of transport was so ridiculously low that it was cost-efficient for a farmer in Georgia to get on a plane with two baskets of peaches, go to Moscow to sell them on the open market, fly back to Georgia and make a 100 per cent profit on the airline ticket.
That is an example of irrational pricing. As a result Soviet industry used 2.5 times as much oil per unit of production as the West. The inability to export sufficient oil was an inevitable result of an absurd pricing system. Furthermore once such a system was set up it was incredibly difficult to escape from it.
An irrational pricing system also made proper accounting impossible. There was virtually no accounting system in the Soviet Union. Without accounts it is impossible to decide what is a rational use of labour time. It is impossible to say whether a firm is profitable or not, and therefore to plan the efficient use of resources.
With no adequate accounting and no basis for determining a rational use of resources quality inevitably deteriorated dramatically.
Another aspect of irrational pricing was interest rates. These were fixed in the 1950s at 0.5 per cent and remained unchanged for decades. When inflation was more than 0.5 per cent that meant that interest rates were negative. In those circumstances firms logically borrowed gigantic sums of money to accumulate stocks. Bourgeois firms don’t carry very high stocks because they have to pay for them, which gives them an incentive to develop techniques like ‘just in time delivery’ whereby firms may maintain stock level sufficient to keep production going for a few hours or even less.
But negative interest rates made it rational for a Soviet factory to typically keep months’ supplies of stocks, immobilising the country’s resources.
That is why Trotsky opposed the distortion of the pricing system. Instead he called, for example, for direct and transparent subsidies in the form of social security, pensions and higher wages.
But the possibility of rational pricing, accounting and therefore planning is inextricably bound up with relations with the international economy. The only way to develop a coherent price system is by an orientation to compete in the world economy, which means prices of commodities being set in terms of the labour time socially necessary to produce them, while at the same time taking the necessary political measures – state monopoly of foreign trade and planning – to ensure that its development is not subordinated to international capital.
Trotsky argued, in opposition to trying to outdo world capitalism on the impossibly narrow basis of one country, that the highest priority was to raise the living standards of the working class and thereby also its moral and political commitment.
That would pose problems such as consumer goods production running into shortages of steel to make fridges, or cement and bricks for housing or of fuels. But in the Soviet Union the shortages were of the exact opposite character. In the context of endless amounts of steel and coal there were no televisions, no quality food, no consumer services and so on.
In other words the Soviet economy was not run to improve the living standards of the working class. This had the effect of catastrophically demoralising the Soviet working class.
Trotsky’s views on this, that the working class’s living standards and morale took precedence, were attacked by Stalin as economism. But Stalin by embarking on something which was objectively impossible – overtaking the productive forces of capitalism on the basis of a single economy – inevitably had to violently attack the working class to hold back its living standards.
In most Western economies, even Japan, private consumption averages of the order of 60 per cent of the economy, compared to 40 per cent in the Soviet Union. The difference was explained not by welfare provision, but by the massive compression of the wages fund in the Soviet Union. That destroyed the incentive to work and the commitment to the society.
Stalin’s policy was not just brutal Realpolitik. It was a theory. If it were possible for the productive forces of the Soviet Union to outgrow capitalism then Stalin would have been correct. If the Soviet Union could have achieved higher living standards than the West, then the bourgeoisie would be incapable of restraining the world proletariat.
But, in fact, the consequences were the reverse. Economically utopian, its political consequences were reactionary, treating the international working class not as the Soviet Union’s fundamental ally to extend the revolution but as a sort of border guard to stop intervention.
Every other struggle of the international working class was subordinate to Stalin’s diplomacy. For example, what Stalin feared in Germany in 1929–33 was that social democracy would come to power in an alliance with Britain and France and attack the Soviet Union, so Stalin preferred Hitler to come to power.
It leads to the most brutal type of chauvinism. The two most striking examples were the treatment of Yugoslavia and China.
Tito had an independent base: when he went to Rumania after the Second World War 500,000 people turned out to greet him. Stalin did not see this as a second leader of the proletariat with great authority able to inspire the masses, but as a threat and therefore excommunicated Yugoslavia and attempted to crush it.
The Sino-Soviet dispute was the most criminal act of all. On the field of foreign policy this was the most catastrophic thing for the Soviet Union, because there is no doubt up until the 1970s the United States and the capitalists, despite the strength of their economies, were losing the class struggle internationally. For there is one thing that is even more powerful than the world capitalist economy and that is the world proletariat.
Prior to the 1970s the United States had to fight on two fronts. It had to fight against the Asian masses, in the Chinese, Korean then Vietnamese Revolutions, and it had to prop up Western Europe militarily and economically against the Soviet Union. And the US was losing. It was fought to a draw in the Korean War, it lost the Cuban Revolution, it lost the Vietnam Revolution, it lost the colonial revolutions. Like Germany in the First World War, fighting on two fronts, it lost.
This dynamic was broken by the consequences of the Sino-Soviet conflict. Krushchev, in line with socialism in one country, had embarked on his policy of greater power chauvinism towards China, for example refusing to help it develop nuclear weapons in the 1960s when the Chinese were directly threatened by the United States. He withdrew Soviet economic advisors from China to teach Mao Tse-Tung a lesson. The Chinese leadership turned in desperation first to an ultra-left course and the Cultural Revolution and then to an accommodation with the United States against the Soviet Union.
The United States was enabled to split the world’s two most powerful workers’ states and to concentrate all its resources against the USSR in Europe and win.
In conclusion, therefore, if one had to reduce the programme of the proletariat in Russia to two things it would be: one, total priority to light industry and secondly, reverse the relations with China.
Total priority to light industry, including the consumer service sector, means giving pre-eminence to raising, as rapidly as possible, the living standards of the working class.
That was Trotsky’s position, as against both the supporters of Stalin or Brezhnev and the theorists of the free market – who both seek a solution at the expense of the working class – Stalin by forced industrialisation, the bourgeois theorists by unemployment and the capitalist market.
Trotsky’s position, to raise the living standards of the working class, combines the political and economic because, as Marx said, the greatest productive force is the rising class itself. The greatest productive force in the revolution against feudalism was the bourgeoisie, the way the bourgeoisie organised production. The greatest productive force in the world today, which even the bourgeoisie acknowledges in its own distorted way, is the working class.
We have witnessed how a country, Germany, in which the physical capital stock was almost destroyed could rebuild itself as the primary economic power in Europe in the space of ten years on the basis of its highly skilled labour force. Skilled labour is a much more valuable productive force than physical capital, although, evidently, you also need physical capital.
This explains the emphasis of modern capitalist economies on education and training. It is often quicker and cheaper to re-equip a factory physically than it is to re-train the workforce. Many of the features of modern capitalist production are a distorted acknowledgement that the most fundamental productive force is the working class.
Hence the priority to raising the living standards of the working class as rapidly as possible is not merely politically correct but also the most rational economic course.
Trotsky argued that no investment pays greater economic dividends than investment in the proletariat. That is why one of the two most necessary things in the Soviet Union was total priority to the development of light industry and the service sector.
The other key goal, to reverse the Sino-Soviet split, so that imperialism is faced by a united force of the proletariat in Russia and China, needs no further explanation. It is utterly obvious.
This issue of the alternative to the failed strategy of socialism in one country remains the most important question in world politics because the outcome of the struggle in Russia is far from resolved. We are going through a period today which only happens once in a generation. There have only been two crises like this in the 20th century, in 1917 and 1941.
The objective economic content of the modern epoch is the following: which class will organise and international mode of production. It is not an issue of which class will finally triumph – eventually the proletariat will win if the world is not annihilated in a nuclear holocaust first. But the struggle in this century has turned on that question. And on this fundamental issue of the class struggle in our epoch, since 1917, Stalin and his successors oriented away from the objective of organising an international mode of production and that led inevitably to catastrophe.
The point is not to claim that to have embarked upon an internationalist course would inevitably have led to success – although even with distorted policies a united Soviet Union and China were probably enough to crack the United States. But simply that the road of socialism in one country inevitably led to defeat.