One of the popular interpretations of the Soviet system by socialists is that it was a form of state capitalism in which the bourgeoisie class was replaced with a statist class. Some of the proponents of this view include Charles Bettelheim, Stephen Resnick and Richard Wolff, but each with their own slightly different take. The common version of this view is that the top officials of the communist party became a new capitalist class which appropriated surplus value from employees of the state. Beginning with Bettelheim’s version of this analysis, from his book Class Struggles in the USSR, he suggests that the Communist party came to dominate the working class, thereby becoming a “new” bourgeoisie class. Bettelheim’s analysis, however, suffers from some problems. In the Soviet system, there was no private ownership of the means of production, no real enterprise competition, and no production for profit. Soviet elites (or nomenklatura) had no drive or even means by which to accumulate capital. Rising within the ranks of the Communist Party or government administration was the only means by which to obtain greater status in the society, and the only way to do that was to perform well in your position — that is not to say government officials (apparatchiks) did not enjoy certain privileges; although elites were at the front of the queue for consumer goods in times of shortage, only a select few had a higher standard of living than, say, the average American middle manager. Furthermore, workers had guaranteed jobs; they could not be fired as it was against the law, so party members could not use unemployment as a disciplining device for labor as is the case under capitalism. And since most basic needs were met through the provision of public goods, workers were not dependent on any one elite for subsistence. This analysis also runs counter to Marxist theory which argues the bourgeoisie class exerts influence over the political class, and thereby state policy. In the Soviet system, there was no bourgeoisie class to offer patronage, and state policy was determined within the party. Therefore, the description of state capitalism appears to be inconsistent with what we know about how the Soviet system functioned.
Given these inconsistencies, Resnick and Wolff’s, in their book Class Theory and History, make a similar case by examining the relational structure of appropriation of surplus value. Workers contribute value above what they needed for their own subsistence, thereby creating surplus value. If the Soviet system were a communist class system, workers would have control over the distribution of the surplus. Since the Communist elite had control over the surplus, they argue that this was exploitation. Resnick and Wolff also argue that the Soviet system had some similar features to capitalism. Labor was free to move between enterprises. Industrial ministries were organized similarly to corporations. There was some competition among enterprises, and profit rates were one criterion to evaluate performance. However, this appears to be a dubious attempt to apply the label of capitalism to the Soviet system. For one, there was no real competition between enterprises. When an enterprise failed to consistently meet quota, it did not go bankrupt or out of business. Management would be punished or replaced, scrutiny would increase, but nothing like the consequences of competition we see in a market-based system. When a firm was able to consistently meet or surpass quota, workers were rewarded with bonuses; “profits” were otherwise retained earnings. That was the extent of competition in the Soviet system. Furthermore, Resnick and Wolff are arbitrarily narrowing the descriptive options of class relations — slavery, feudalism, communism or socialism, and capitalism — and exclude the possibility of a hybrid or mixed system wherein a new exploitative class could arise unaccounted for in traditional Marxian analysis.
Paul M. Sweezy attempted a more refined argument of a new class system in his article, a “Post-Revolutionary Society”, published in Monthly Review back in 1980. Sweezy claimed that the Soviet system did transform into a statist mode of production in which the Communist party elite were the new ruling class, but admitted that the system lacked the key features of capitalism such as commodity production and competition. However, it is not clear the party-state elite where a class, at least not in the way we would define it in Marxist theory where this argument originates. It is also not clear the party-state elite appropriated a surplus from workers. Profits were the first source of investment by enterprises, which were also taxed for government expenditure. Only a small portion went towards workers as a bonus for surpassing objectives. Party-elites had no mechanism by which to appropriate portions of those profits, or surplus generally in the aggregate. Furthermore, capital accumulation was not a measure of social status, nor could it be. Money did not equal power, only position. And, as noted above, the only way to increase social status in the Soviet system was to rise up through the ranks of the party and government positions. It is also telling what the later generations of Soviet party-elites truly thought of the system given they did little if nothing to defend it before its dissolution in 1991. Many party-elites thought they had more to gain from capitalism. And many of them went on to become the oligarchs in former Soviet Union countries.
But if the system was not capitalist, was it socialist? The claim that the system was socialist was made both by Soviet officials and Western specialists. The reasons they agreed upon were based on state ownership of the means of production and central planning. Some socialists argued that the system was socialist at first, then mutated into a deformed workers’ state by Stalin and later leaders — this was the position taken by Trotskyists for example.
Nominally, one might regard the Soviet system as socialistic in some respects; there was after all social ownership of the means of production through the state — not the only means of social ownership possible mind you — which engaged in economic planning and production for use, not profit. The system had many of the trappings desirable of a socialist system — the right to a job, full employment, wide provision of public goods to meet basic needs, absence of property income, and relatively low levels of inequality. The non-socialist features, on the other hand, were substantive departures from the ideal socialist system. The two central tenets running through all ideals of socialist transformation is the social ownership of the means of production, and the democratic control of those means. But while democratic on paper, workers had little democratic rights in the Soviet Union. The state was governed by a single party which was ruled by a select privileged elite that revolved around the General Secretary of the Central Committee of the Communist Party. The state was highly hierarchical and authoritarian, and planning authorities and enterprises were as well. Civil rights and liberties were extremely limited throughout the Soviet Union; particularly during the Stalin era. Given these shortcomings, the description of socialism seems to be a stretch as its invocation suggests of a system which embodies both the central tenants of social ownership and democratic control (which cannot be emphasized enough particularly in today’s discourse). However, it is also a stretch to consider it capitalist for the reasons noted above. It is more persuasive then to characterize the Soviet system as a uniquely mixed system with both socialist and non-socialist features.
By convention the mixed system of the Soviet Union has been regarded as ‘state socialism’. But many socialists rightly cringe at the notion of conceding any invocation of the term socialism to the Soviet system because it failed to extend democracy so miserably in both its political and economic spheres —which is also, at least in part, the motivation of many theorists, especially those discussed above, to categorize the Soviet system as an aberrant form of capitalism . Capitalism for its part has managed to maintain democracy, or a form of it, in the political sphere, and to a degree in the economic sphere as consumers do have more choices in products.
The goal of socialism, however, is to extend democracy to additional spheres of human relations particularly that of production. In imagining a truly state socialist system, it is possible to conceive of a democratic state that owns the means of production, but is internally organized in a participatory, cooperative fashion that would achieve both central pillars of social transformation desired by socialists — social ownership and workplace democracy. Thus any conceit of the label of state socialism to the Soviet Union suggests socialist systems need not be democratic first and foremost in the political sphere, but also for economic and productive relations, and makes it that much more difficult to rid socialism of its Soviet baggage.