Tsushima’s Theory of “State Capitalism”
- The Limits of Wishful Theories of "Socialism"

Written by Hiroyoshi Hayashi (1992)
Translated by Roy West

Contents

• INTRODUCTION
• The “Sublation” of the Labor Certificate System And the “Determination of Value”(!?)
• Distribution According to Quantity and Quality
• Fundamental Contradictions of State Capitalism and The Direction of the System
• An evaluation of Tsushima’s Theory

Introduction

Tsushima Tadayuki's theory of state capitalism has special significance in Japan as a groundbreaking criticism of Soviet "socialism". This important historical significance lies not only in the condemnation of the Soviet Union for "not being socialism", but in firmly insisting on its bourgeois character and proclaiming a theory of state capitalism. In this sense, he was the first "leftwing" theorist in Japan to attempt to break through the internal limitations of Trotskyism, and his standpoint is directly connected to the position of the Socialist Workers Party (Japan) [Sharoto].

Nevertheless, his perspective was fundamentally unable to overcome the horizon of Trotskyism, and remained limited by it. Here we will clarify the limitations within Tsushima's theory and its "errors" (in the sense of their inevitability, rather than as something random), but this certainly does not deny the historical significance of Tsushima's theory. There is simply no comparison between his theory and the "USSR theory" of JCP leaders such as Miyamoto Kenji and Fuwa Tetsuzo in terms of its rich and serious content. Here we will examine Tsushima's criticism of the Stalinist theory of "distribution according to the quantity and quality of labor" in connection to his examination of "labor certificates"; followed by a consideration of the essential contradictions of Soviet state capitalism. Finally, we will look overall at Tsushima's theory. The quotations here are all taken from Tsushima's Soren shakaishugi no hihan [A Criticism of Soviet "Socialism"] (Tokyo: Rironsha, 1959).

The “Sublation” of the Labor Certificate System And the “Determination of Value”(!?)

The typical expression of the theoretical limitations of Tsushima's theory is his emphasis on the significance of the labor certificate system; that is, his attack on the Stalinist concept that "labor should be distributed according to quantity and quality". He argues that distribution according to the "quantity of labor" cannot occur under socialism, since this is the principle of distribution under capitalism, and will "inevitably lead to the world of value." Tsushima provides the following reason for this:

Here it must be pointed out that the Stalinists' famous anti-Marxist formula of "distribution in accordance to the quality of labor" (i.e. mental labor and physical labor, and skilled and unskilled labor) contains not even one single element of Marx's labor certificate system...According to Marx, "the distribution of the means of livelihood of every producer is determined by his labor time", and hence there is no distinction made between mental and physical labor in the sphere of distribution. This is because skilled or mental workers do not necessarily "work more in a given period of time, or continue to work longer" than unskilled and physical workers. If an objective distinction between them were to be made, this would inevitably require the introduction of the value of labor-power. Without this no objective distinction can be made. For example, compared to unskilled workers, skilled workers do not necessarily "work more in a given period of time, or continue to work longer". Nevertheless, if a distinction were to be drawn between the two, the latter is a higher grade of labor. This is because more labor time (education costs) was consumed to produce this labor, and this is taken into account on the level of distribution. Therefore, needless to say, what has to be calculated is not the worker's living labor, but the labor-power objectified in his labor-power (the labor expended in the production of the worker's means of livelihood), i.e. the value of labor-power. (Incidentally, in a society of commodity production, the products of skilled labor have a higher value than those of unskilled labor. This is because, as Marx says: "All labour of a higher, or more complicated, character than average labour is expenditure of labour-power of a more costly kind, labour-power whose production has cost more time and labour than unskilled or simple labour-power, and which therefore has a higher value. This power being of higher value, it expresses itself in labour of a higher sort, and therefore becomes objectified, during an equal amount of time." [Capital p. 305] The above distinction itself, on the precondition of the law of value, introduces the abstract human labor (value of labor-power=wage labor category) objectified in labor-power. Without this, it would impossible to introduce these elements.
[Tsushima, Soviet Socialism, pp. 29-30.]

Tsushima also quotes a passage from Engels where he argues that since the costs of training skilled labor under socialism would be born by society, instead of privately, these workers would have no right to demand extra compensation, and that this would belong to society. He then criticizes the view of Suzuki K?ichir? that Engels' passage is referring to the second stage of socialism, i.e. communism.

Despite Tsushima's good intention of pointing out that under socialism distribution should not be carried out according to skilled and unskilled labor, this is mere confusion. For example, he says that skilled labor or mental labor do "not necessarily carry out a larger amount of labor in the same time or continue for a longer time" than unskilled or physical labor. But if this were so, skilled and unskilled and mental and physical labor would not exist under socialism. However, for Tsushima their existence itself forms his premise. Engels' point is not that these categories themselves do not exist. He recognizes that such categories would naturally exist under socialism, and only denies that they would receive more in distribution.

Tsushima's insistence that the capitalist law of value would not determine socialist distribution in any sense only reveals his own misunderstanding of the law of value. The principle of distribution under socialism is basically that one gets back (that which is produced in) the labor time contributed to society (apart from the necessary deductions to society). (Or, to borrow the words from Marx's Critique of the Gotha Programme: "the same quantity of labour he puts into society in one form comes back to him in another".[Marx, Critique of the Gotha Programme, p. 213.] According to this principle, it does not run counter to the essential concept of socialism to say that skilled labor would receive more than unskilled or simple labor, but what does in fact deny such distribution under socialism is the fact that under socialism such skilled labor, or high-grade labor, itself is made possible through societal costs, not personal expenses. Therefore, the owners of such skilled labor-power no longer have a basis to receive extra payment, but this does not mean that their labor-power is not skilled labor. This occurs even though their labor-power is skilled or high-grade labor. Thus, under socialism distribution is directly and simply based on labor time, and consequently the external aspect of this society is complete and clear equality. But this is not unconditional- i.e., in a sense this is also a question of the "quality" of labor (the "quality" of labor reduced to quantity).

Tsushima argues that under socialism the concept of the value of labor-power naturally cannot exist, and that introducing the concept of skilled labor would necessitate the concept of the value of labor-power, which itself presupposes the world of value, thus leading away from the essence of socialism (since socialism is clearly the "extinction of the world of value"). But here Tsushima confuses the qualitative and quantitative aspects of value. Certainly labor-power does not become a commodity under socialism. Nevertheless, the fact that high-grade labor is high-grade labor, is similar to the fact that even though general commodities become simple products of human labor under socialism, their "value determination" (the fact or aspect that they are the outcome of abstract social human labor) does not disappear. If this were also to be eliminated, socialist society would lose all basis for a standard of distribution of products (consumption goods) as well as the basis for the "planned economy" (the concept related to the overall reproduction of society), and would become a completely random and haphazard society, an inhuman society, where people would lose sight of all social existence and activity. Under socialism, "labor-power" is an actual concept, and thus the distinction between high-grade (complex) labor and other (simple) labor is also a real one. Of course, it is true that skilled and high-grade labor substantially lose their meaning. However, to completely overcome this requires the second stage of communism which Lenin calls the "higher stage" of socialism.

Tsushima's view that abstract human labor is a concept that only corresponds to commodity production is one-dimensional. He does recognize that the concept of abstract human labor, in a certain sense, remains under socialism, but he only views this as a "remnant" or as something formal without any essential meaning. He seems to agree with the views of the Stalinists instead of Kuruma Samezo.(*) For example, he supports the view of the German Communist Party expressed in 1931 (note the date!) that, "under socialism the law of value perishes, along with abstract labor which is the substance of value."

(*) Kuruma Samezo (1893-1982), a well-known Japanese Marxist economist well known for his research on Marx's theory of crisis, and editor of the 15 volume Marukusu keizaigaku rekishinkon [Marx's Economic Lexicon].

To state my own personal conclusion: in general, the question of the role of abstract human labor in a communist social structure does not become an issue. But it is a fact, that in the distribution relations of its lower stage (socialism), it cannot avoid playing an "indispensable role". Still, this exists as a remnant of the old commodity production society, not as something communistic. As the communist social structure develops, all of the remaining categories of commodity production society are eliminated. Thus, my personal view is the following. First of all, does abstract human labor really "play an indispensable role" in the 'planned production' the communistic social structure, whether in the first or second stage? Of course, if one progressively abstracts in one's head, all people are engaged in this kind of abstract human labor, and in this sense includes the entire human world. Abstract human labor in the sense of the "content of the value determination" is certainly a fact of "natural law". However, the problem does not consist of this. The question is whether or not this abstraction plays a certain social role. In other words, the question is whether this abstraction exists or not in the sense that a certain society would not be able to exist without it-to borrow the words of Marx: "an abstraction that occurs daily in the process of social production".[Tsushima, pp. 53-4.]

After citing Engels' well-known statement in Anti-Duhring that "[p]eople will be able to manage everything very simply, without the intervention of much-vaunted 'value'"[Engels, Marx/Engels Collected Works vol. 25, p. 295.] , Tsushima says:

Here to say that "value remains even within communist society", refers to the so-called "content of value regulation" (the regulation of labor time, and the distribution of social labor to different productive sectors), not the law of value. Therefore, in this case the "useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan" [Anti-Duhring, p. 295]. Here Engels uses the expression "their production". But labor in this case is "specifically concrete labor whether that of the joiner, spinner or mason" (Marx). More than society, this presupposes the existence of a certain labor population. But the establishment of planned production is impractical from only the labor population, and already must appear as "specifically concrete labor whether that of the joiner, spinner or mason". Of course, if one abstracts from this concrete labor in one's mind, abstract human labor can appear and be included. "When labor is realized it of course has a concrete form. But prior to this it is labor-power as the potentiality which can take many forms." (Kuruma)-This is probably the case, but this abstraction itself does not play any social role, and therefore does not enter the question as a social action. The problem is whether this abstraction is necessary or not as a social action. Otherwise, there is the question of whether this society can be realized or not. This is a question of whether it is a historical category or not. But even in the first stage of communist society, not to mention the second stage, such an abstraction is not necessary. In the case of planned production, the starting point is the total concrete labor, and this is sufficient. There is no question here, as in commodity production society, of society being unrealizable without social acts as an "abstraction".
[Tsushima, p. 55.]

Of course, it is incorrect to say that under socialism (the lower stage of communism) abstract labor “plays an indispensable role in the distribution relations”. Marx and Engels’ repeated many times that in production labor time plays a decisive role.[See ENDNOTE 1.] In Anti-Duhring, Engels writes:

It could never occur to [society] still to express the quantities of labour put into their products, quantities which it will then know directly and in their absolute amounts, in a third product, in a measure which, besides, is only relative, fluctuating, inadequate, though formerly unavoidable, for lack of a better one, rather than express them in their natural, adequate and absolute measure, time.

Moreover, it should be clear that to "measure" this, i.e. to "express the quantity of labor in time", requires either the "reduction" to abstract human labor (social labor in which quantity is the same and only the relative difference of "quantity" is noted) or its actual existence.

Tsushima primarily discusses labor from the perspective of "abstracting" or "being abstracted". He only discusses the "reduction" or "abstraction" of abstract human labor in reality or "in one's mind", but pays almost no attention to its real existence. However, under capitalism, abstract human labor, in this sense fundamentally social human labor, is already a real existence (for example, consider the overwhelming existence of simple labor). Socialism starts from this precondition. In socialist society "there is no need, as in commodity production society, for social acts as an abstraction" since this is presupposed in reality.

Abstract human labor is certainly not just an abstracted concept within one's "head" (Tsushima should consider what this means exactly). In other words, it is not an empty concept or human fantasy or construct, but a real, existing thing. This is the reason that we can abstract from within reality the actual relations or one aspect or moment, and create this concept. This is the concept of something real. Basically, this is the nature of the relationship between a concept and reality. If an "abstraction" is considered from the materialist standpoint, no other conclusion can be reached. The labor objectified in the commodity is concrete useful labor, on the one hand, and abstract human labor on the other, and in this manner is already thoroughly social labor. This is the essential aspect of human labor under capitalist society, and socialism is based upon this realty, rather than being its simple negation or abandonment.

Tsushima would probably equivocate and say that he understands what we have just said (of course he really does not), and argue that the question is whether or not this "abstraction" is necessary for socialism or related to its real existence. He thinks that it is possible to think of socialism, i.e. conscious collective production of associated producers, without this sort of "abstraction". However, as soon as the concept of "aggregate labor" appears and the problem arises of where (sector of production) to distribute labor, the problem of the quantity of labor also arises, regardless of one's desires, and socialism cannot avoid this problem. The quantity of labor is a question of abstract human labor. Tsushima seems unable to understand the simple fact that the quantity of labor can only be comparatively measured or assessed as abstract human labor. He misunderstands Engels' use of the word "directly" (i.e. he doesn't understand the meaning of labor not assuming the form of "value"). He is unable to understand the meaning of concrete useful labor, and therefore abstract human labor as well. He confuses the two and this results in all sorts of difficulties. Tsushima says that the labor population alone is not enough for the establishment of "planned production" (what confusion!). But it is clear that in order to determine the quantity of labor to distribute as "specifically concrete labor, whether that of the joiner, spinner or mason", the problem is clearly one of the quantity of labor, i.e. the "labor population".

Under socialism, society would need to evaluate how many people are needed for "joining, spinning, or masonry", and this is only possible by evaluating labor in its aspect as abstract human labor. Tsushima, who is unable to understand this point, has an incorrect understanding of abstract human labor, as well as concrete useful labor. He basically imagines a strange, phantom-like capitalist society (and socialist society), in which abstract human labor lacks its moment, and there is only concrete useful labor. In this way, labor does not exist as social labor, but only as individual, arbitrary and unsocial labor. However, even if such labor were in fact possible, this would be completely unrelated and irrelevant to socialism. Tsushima carelessly believes that socialism is the simple negation of capitalism, but socialism is in fact the sublation (a negation that preserves its positive features) of capitalism, not its simple negation. Socialism starts from the basis of the thorough transformation of labor into social labor achieved by capitalism, and without this precondition, socialism, realistically speaking, is impossible. What did Tsushima learn from the breakdown of Soviet "socialism"? Where does he look for the basis or cause of this breakdown? Where else could this collapse be located except in the fact that labor did not become thoroughly social labor, and was hence not transformed completely into abstract human labor. In other words, there was a lack of heavy industry covering a wide-stratum of the society. Tsushima's explanation of the labor certificate system also contains serious mistakes. He criticizes the views of John Gray, Robert Owen, as well as Kuruma Samezo in the following passage.

However, one additional point concerning 'labor certificates' which merits attention is that they cannot be circulated in exchange for any kind of goods. There are probably some who think this. For example, some might think that labor certificates will be like rewriting 1,000 yen, 100 yen or 10 yen bills as 1,000 labor hours, 100 labor-hours or 10 labor hour notes, but this is mistaken. Labor certificates are literally speaking a type of certificate (translating this term as "labor securities" is not good because it calls to mind some sort of value body) As Marx said: "The individual labour time of the individual producer is the part of the working day in society contributed by him, his share of it. He gets from society a receipt [labor certificate] that he has contributed such and such an amount of labour?cand withdraws from society's stores of the means of consumption an equal amount costed in labour terms" [Critique of the Gotha Programme, p. 213]. This is a certificate for each person to recognize that they produced this amount of labor and can thus receive a certain amount of goods. This certainly cannot be exchanged for some kind of article and circulated.
[Tsushima, p. 67.]

(In criticism of Kuruma) I cannot agree with the idea that the above are "exchanged" or "that the difference is only an indication of labor time as it is"; for example the idea that labor certificates can be exchanged or circulated, or that they can be called labor time notes of a certain amount of time.
[Ibid., p. 71.]

It is a matter of course that labor certificates are not notes (i.e. currency or money" in general), but because of his fixed idea that individual labor should not be evaluated or expressed in labor time, he views Kuruma's opinion as an explanation of money. This reveals that Tsushima essentially does not understand the labor certificate system, and that he is completely unable to understand the expression of the value of the commodity in commodity production society, or the "measure" of value through money. It is complete nonsense to go so far as to say that labor certificates are different from "labor time notes". In labor certificates, the amount of an individual's is directly, and from the beginning, expressed in labor time. It is clear that when Kuruma insists on this, he is not thinking that labor certificates would circulate, etc. Tsushima, however, is unnecessarily worried that if labor time were expressed, this would be a "note" capable of circulating. But if there were no production or circulation of commodities, what would determine the circulation of "labor certificate notes", or whatever one wishes to call them? This is completely absurd. Making this sort of unintelligent statement is deeply connected to Tsushima's denial of the essence of socialism, i.e. the significance of the concept of abstract human labor. In fact, without understanding abstract human labor, one cannot avoid misunderstanding the significance of the labor certificate system. This is because the contribution of individuals to society includes a certain quantitative expression, and this is nothing but an expression connected to abstract human labor.

Tsushima writes a great deal about the labor certificate system, and insists that its realization is the criterion to determine whether socialism has been realized in a certain society or not. This is the entire basis of his criticism of Soviet "socialism". Still, one could hardly say that he has correctly understood the significance and essence of labor certificates. Therefore, in addition to stating the obvious fact that the labor certificate under socialism "is not money", he says that it is not a certificate of labor time either. Tsushima ends up spreading the upside-down idea that the labor certificate system is not the outcome of the realization of socialism, but rather its premise or cause (e.g. he says that socialism is the "labor certificate system" stage of the communist social structure). Therefore, he becomes absorbed in the "needless worry" that if one says "labor-time certificates" they will become "money". The "labor certificate system" is thus absolutized in the strange form of a fetish or dogma.

“Distribution According to Quantity and Quality”

Tsushima discussed Marx's Critique of the Gotha Programme with Sakisaka Itsuro. Naturally, the concepts of Sakisaka, who glorifies the contemporary USSR as socialism and reduces socialism to a mechanical equality, are idealistic and moralistic, not realistic or scientific. However, this does not mean that the following view of Tsushima is necessarily correct:

Sakisaka seeks the reason for "the rule of unequal principles by means of formal equality" in the idea that this "this applies to originally unequal ability and unequal need" (allotments corresponding to intensified labor in the same period of time)."But this is not the meaning Marx intended. "The right of the producers is proportional to the labour they contribute; the equality consists in measurement in terms of a common standard, labour" (Marx). In other words labor-time is the measure. When this measure is used it appears at a glance to be equal, but in fact leads to some inequality in distribution. This is because labor time is the measure of equality, but "[t]his equal right is an unequal right for unequal labor" [Critique of the Gotha Programme, p. 214], and an equal amount of time and labor are not necessarily contributed. Despite using the equal measure of labor time, or rather for this very reason, this leads to some inequality. Sakisaka totally fails to understand this. He says that it is not possible for "one person to receive more than another.
[Ibid., p. 82-3.]

Tsushima says that the equality of socialism "appears equal at a glance", but it is not true equality which can only be achieved with the "abolishment of "the rights of producers in proportion to the labor a person contributes", and when "labor is distributed 'according to need' irregardless of the contribution of labor". In other words, "true equality" cannot exist under socialism, but only under communist society (socialism appears to be no big deal?). But why did Tsushima not proceed to the realization that under communism the very concept of "equality" itself is jettisoned? Moreover, socialism is not "seemingly equal at a glance", but the very incarnation of equality, and in a sense true equality (i.e. all of the people become workers and are equal as such, and as a result all exploitation, rule, oppression and social discrimination in human relations comes to an end). Tsushima does not grasp the great historical significance of this, and this is a fatal flaw in his theory.

Tsushima is opposed to the Stalinists' distribution according to the "quantity and quality of labor" since it is in opposition to Marxism. He emphasizes that socialism is a principally equal society. Moreover, he believes without doubt that the Stalinists are the bearers of state capitalism and thus an exploiting class. Unquestionably, this is a principled position. However, he one-sidedly argues that since the law of value is sublated in socialist society, the category of skilled labor cannot exist and distribution consequently cannot be carried out according to the "quality" of labor. He exposes the Stalinists, but he does not, and indeed is unable, to criticize them correctly. Skilled and high-grade labor exist in reality in the Stalinist society? Considering this fact, shouldn't Tsushima accept the reasoning of the Stalinists that since skilled labor exists it is necessary to compensate it with higher salaries?

Understanding the sublation of the law of value as a problem of overcoming the "quality of labor" (a question of the category of abstract human labor and therefore a question of the categories of simple and complex labor), and consequently as the sublation of skilled labor, is a confused theory. Even in socialist society, in a sense, the distinction that Tsushima calls distribution according "quality of labor" remains. But this is essentially reduced to the quantity of labor, and thus follows the general principle governing distribution under socialism. Under socialism, the differences in distribution due to such differences as skilled labor become increasingly insignificant, and eventually end all together, because the cost of training skilled and high-grade labor is born by society, and the foundation for skilled labor to receive more in distribution is eliminated. There are also the cases where a person performs simple labor at one time and complex labor at another time, but, as a general principle, regardless of the "quality" of labor, everything is distributed equally. Of course, here the "quality" of labor refers is a question of quality in the sense of whether labor is simple or complex or skilled, and is not a question of useful concrete labor.

Under socialism, distribution is determined by labor time, and this is also the case for skilled labor as "intensified" labor which is theoretically included. Tsushima cannot deny that skilled labor still remains under socialism. But this is hardly ever, or never compensated for under socialism because the form of skilled labor is already completely one part of the social outlays, and therefore society, rather than the individual, receives its benefits. Of course, in socialist society distribution would be as equal as possible, but this would not mean the elimination of all distinction between workers or a mechanical equality. Socialist equality is nothing but "equality as workers".

Tsushima claims that because the "law of value does not operate" under socialism, the "reduction" of complex labor to simple labor, or skilled labor to unskilled labor would also not occur. We need to criticize this line of reasoning. According to Tsushima, the disappearance of the law of value, i.e. labor-power as a commodity, would mean the end of distribution according to the "quality of labor" (in this case the distinction between complex and simple labor and the distribution based upon this).

However, this view is incorrect, since complex and simple labor would remain even if the commodity form of labor-power were abolished (the sublation of the law of value). Even though socialism is a society with greater equality, this does not mean that the categories of complex and simple labor just disappear, or that it can be viewed from the perspective of coming close to "average-ism" [heikinshugi]. The foundation of the "average-ism" of socialism is the end of classes, and the "equality of everyone as workers"; this is the limit of equality. For human history, of course, this represents a decisive step forward and a monumental transformation. Tsushima does, on the other hand, recognize:

Even if specialists or factory managers receive 40-80% more than unskilled workers, this does not necessarily represent a relationship of exploitation. This is because the skilled labor of specialists or managers is able to produce more value in one hour than unskilled workers.
[Ibid., p. 246.]

But he doesn't think that this is in contradiction with his own theory. He doesn't understand that what he is referring to is the same as the "reduction" of skilled labor to unskilled labor, or complex labor to simple labor.

The relationship between complex and simple labor under capitalism is certainly mediated by the value of labor-power. However, even under socialism, complex labor is still intensified simple labor and is therefore "reduced" to simple labor. Of course this increasingly loses significance in distribution, because the cost of training complex labor is borne by society rather than the individual, and society in general increasingly becomes based on the principles of equality. Still, in terms of the organization of social production, this remains a necessary category and continues to have significance. For example, in social production, the evaluation of the amount of workers or technicians is done by evaluating labor-power (the labor population) according to the "quality" of labor, i.e. "quality" in the sense of the distinction between complex and simple labor.

It is doubtful that Tsushima truly understands the reason why the value (wage) of complex labor is higher than the value of simple labor-power under capitalism. The reason, as Marx pointed out, is that it contains more "training costs", that is more value is "objectified" in it. The wage is the price expression of the value, and it is natural that the higher the value the higher the price. There is no doubt that labor-power only appears as a commodity under capitalism, but the important point here is not the concept of the value of labor-power, but rather the explanation of why complex labor-power is higher than that of simple labor-power. Marx found that complex labor-power was the result of more social labor-power than simple labor power. In other words, the question is not the "law of value" as Tsushima believes, but what Marx calls the "determination of value". Thus, complex labor (power) can naturally be "reduced" to simple labor (power), and it would indeed be strange if it could not. For Marx, the relationship between simple and complex labor-power is basically the same, since the manifestation of complex labor is intensified simple labor, or labor squared.

Therefore, it is an empty "leftist" theory to conclude from the fact that the "law of value doesn't operate" under socialism that "complex labor cannot be "reduced to simple labor" under socialism, or that the concepts of complex and simple labor would not even exist". Socialism, for instance, recognizes human labor as simple labor, i.e. abstract human labor, or "only labor", and in a sense the organization of socialist production starts from this point. Furthermore, the recognition of the category of simple labor is equivalent to the recognition of complex labor. To maintain consistency, Tsushima is compelled to deny not only complex labor, but also the concept of simple labor (therefore abstract human labor) under socialism, and thus socialism is turned into something completely non-conceptual. Socialism either becomes a utopianism, or is dissolved into the higher level of communism. The essence of socialism as socialism, its particularity, is lost, and the result is confusion.

Even supposing that differences in income between skilled and unskilled labor were to remain, this would mean that the society is not socialist, i.e. that classes and class conflict remain. In this case, the fact that skilled labor is intensified labor, and thus receives a greater part of distribution, would not contradict the socialist principle of distribution of labor according to time. Of course, if skilled and unskilled workers would possess the means of production together, this would not be a situation with the bourgeoisie owning the means of production on the one hand, and the wage labors alienated from these production means on the other. However, as socialism develops and "high-grade" labor-power is no longer the outcome of individual expenditure, but rather is borne by the community, the part viewed as longer labor time would return to society, not to the individual, and thus the differences between skilled and unskilled workers would diminish, and then finally disappear. This in turn would mean that the higher stage of communism was being reached.

The fact that Soviet society was unable to establish an equal society, and instead returned to the "non-egalitarianism" where bourgeois specialists (i.e. high-grade labor power, skilled labor power!) were paid higher salaries, and a piece-wage system was even introduced, is not merely a "theoretical" error or the "transitional policy" of a workers' state, but the inevitable outcome of state capitalism. The internal systematic demand to thoroughly exploit the working people and achieve the forced accumulation of capital, made the Stalinists' barbaric and atrocious methods necessary. This is not a question of whether the Stalinists understood Marxist theory or not, or what might have occurred had they not existed. Of course, Tsushima is perfectly justified in attacking the Stalinism for being "non-egalitarian" and a tool of "state capitalism" opposed to the essence of socialism. Tsushima for example makes the following declaration:

In Anti-Duhring Engels says that "with the differences in distribution, class differences emerge"[p. 136]. Since 1931, with the implementation of a widely unequal wage system, all of the class differences appeared, and the dictatorship of the proletariat changed into a bureaucratic dictatorship. Along with these changes, the distribution of the material production conditions (distribution of means of production) also, in the name of "nationalization", automatically changed from "the possession of the workers themselves" to the "possession of the bureaucracy", and these changes in material production conditions also set the decisive conditions for changes in distribution and class differences, and led to their greater promotion.
[Ibid., pp.34-5.]

Of course, one cannot deny that class differences appear as differences in distribution, but what fundamentally determines class are the relations of production, and differences in distribution are merely the outcome of this. Here Tsushima seems to be saying that distribution, not production relations, determine the concept of class.

Stalin began to attack "egalitarian" distribution and defend a system of discriminatory wages around 1931. At the time, there was a great deal of migration of labor-power, particularly skilled workers, but since skilled and unskilled labor was evaluated in the same way, skilled workers wandered around in search of enterprises that would value their labor. In order to prevent this, Stalin held the position that the principles of equality had to be rejected. Stalin attacked the "uniform workers" and gave preferential treatment to skilled workers, and appealed for the Soviet Union to have an "intelligentsia" with "engineers, technicians, and industrial leaders". From this point, the attack on "egalitarianism" in the Soviet Union was intensified.
[See ENDNOTE 2.]

Of course, if one presupposes that the Soviet Union is a socialist state, Stalin's position appears stupid. However, this shows that skilled labor was unavoidable in the Soviet Union, and it is incorrect to only negate this inside one's own head. This cannot be denied, even if one defines the USSR as a "transitional state". Therefore, it is an even more inescapable reality in state capitalist society. Before exposing that Stalin's theory is "mistaken", the fact that the USSR is in reality capitalism must be revealed.

By insisting on the distinction between skilled and unskilled labor, and making use of the irrational and ambiguous expression of "distribution according to the quantity and quality of labor", the Stalinists (state capitalist bureaucrat bourgeoisie) were able to justify their extraordinary income (ten to one hundred times greater than that of an average worker), which was obtained on the basis of the exploitation of the workers. But one must be careful not confuse this ideological masquerade and the distinction itself. These are two separate issues, and this distinction would remain even if the rule of the state capitalist bourgeoisie were overturned, at least in the early period of socialism. This certainly would not mean the disparity of incomes that actually exists in the Soviet Union, or the extreme gap between the ruling class and workers under state capitalism, but this might, for example, mean a ten or twenty percent difference in distribution, because the principle of socialism is distribution according to labor time. As Marx pointed out in Critique of the Gotha Programme:

But one person is physically or mentally superior to another, and hence contributes more work in the same time or can work longer; and labour in order to serve as a measure, must be defined by its duration or intensity; otherwise it would cease to be a standard. This equal right is an unequal right for unequal labour. It acknowledges no distinctions of class, because everyone is a worker just like everyone else, but it tacitly recognizes unequal individual talent and hence productivity in labour as natural privileges. Therefore, in content this is a right to inequality, like all rights. By its nature a right can only consist in the application of a common standard; but unequal individuals (and they would not be different individuals if they were not unequal) are only commensurable in terms of a common standard, if they are brought within a common purview, grasped only in terms of a specific aspect, e.g. considered in a given case only as workers, and nothing else about them is taken into account, all else being disregarded.

Furthermore: one worker is married, another not; one has more children than another, etc. etc. Given equal productivity and hence an equal share in the socialized resources for consumption, one worker will in fact receive more than another, be richer than another. To avoid all these faults, rights would have to be unequal, instead of equal.
[Marx, Critique of the Gotha Programme, p. 214.]

What Marx is referring to here is mainly the "unequal labor" as the "rights of birth", but with the addition of a few necessary revisions, this proposition could also apply to the case of skilled and unskilled labor. Even if skilled workers work the same amount of hours as unskilled workers, the former can "contribute more labor in the same period of time" since their labor is "intensified labor", or "squared" simple labor. Abstracting out the question of how skilled labor is formed, it has the right to greater compensation. Of course, the "labor time" of skilled labor here is reduced to simple or unskilled labor, and thus does not directly exist as the labor time of skilled labor.

At the end of this passage, Marx says that rights would have to be unequal instead of equal. It is not exactly clear from this passage whether Marx is saying that in socialist society rights must be unequal. That is, whether the compensation of all workers should be made more uniform through social considerations. However, it is certain that Marx is at least advising that some correct response should be taken, on the basis of careful consideration, to the existence of inequality even when distribution is carried out according to labor time (i.e. it is not correct to ignore this fact and behave in a completely insensitive or careless manner).

Fundamental Contradictions of State Capitalism and The Direction of the System

Tsushima's theoretical defect is characteristically expressed in his mechanical understanding of state capitalism. He abstracts the Soviet Union and other such systems as "integral" state capitalism. But what exactly is "integral" state capitalism? The issue here is the system of Soviet state capitalist and its fundamental contradictions. In other words, what is the relationship between state capitalism and crisis (or the deadlock of this "system")? This is the question of the contradictions of state capitalism, and the nature and form of their appearance. This gets to heart of the problem of how state capitalism develops and its contradictions deepen, the nature of its breakdowns, and what transformations it will undergo. In other words, what is the fate of state capitalism? Tsushima approaches this central question by first comparing the views of Tugan-Baranovsky* and Bukharin, and so we will also need to engage with their ideas for a while. Tsushima says, for example, that state capitalist society corresponds precisely with the views of Tugan-Baranovsky and is his "ideal country", and calls his mind "a reflection of the Russian economy":

Lenin said that "state capitalism is something centralized, calculated, controlled and socialized" [Collected Works vol. 27, p. 294.] and that state capitalism and socialism had something in common in terms of national calculations. In Stalinist Russia, however, "social production was organized in a planned way" irrespective of quality. This was suitable for Tugan- Baranovsky.(*) Furthermore, standards of individual consumption were extremely low, but instead of causing a crisis of overproduction, production was rapidly developed. In other words, this was the ideal state for Tugan- Baranovsky. He says that long as production is organized according to a plan, production can be developed, within the limits of productive capacity, without causing a crisis of overproduction, but this ideal state for Tugan- Baranovsky is in fact Stalinist Russia! The correctness of Tugan-Baranovsky's theory of accumulation and crisis was demonstrated by Stalinist Russia! Tugan- Baranovsky died in 1919, but what would his reaction have been had he lived until the Stalinist era!
[Tsushima, p. 262.]

(*) Mikhail Tugan-Baranovsky, one of the "legal Marxists" in Russia before the revolution.

According to Tugan-Baranovsky, Marx's mode of reproduction shows that accumulation (expanded reproduction) can smoothly progress forever without experiencing capitalist crisis. His theoretical motive is the thorough rejection of the so-called "theory of underconsumption" to explain the cause of crisis. He thus concludes from the analysis of Marx's mode of reproduction that, "an expansion of social production can be seen at the same time as a reduction in social consumption, and this does not cause a disturbance in the equilibrium between social demand and supply."(Translated from Japanese edition of Tugan-Baranovsky, Eikoku ky?fu shi ron [A History of Crisis in England] (Tokyo: Nihon Hy?ronsha, 1931), p. 124.) He even accuses Marx of being charmed by the theory of underconsumption. The typical representation of Tugan- Baranovsky's view is the following passage:

If one studies the capitalist economy from the perspective of the mode of reproduction, one invariably reaches the conclusion that "markets are not determined by the size of social consumption". Social production exists not only in the objects of consumption, but in the means of production. If machinery replaces workers, the social demand for objects of consumption will naturally decrease. However, the demand for the means of production will in turn increase. Likewise, if the income of capitalists is turned into capital rather than consumed, the demand for the objects of consumption will decrease, while this will lead to an increase in the demand for the means of production. As a general principle, when social production is relatively well distributed, the decline in consumption and demand for objects of consumption does not bring about an excess in supply over demand in the market.
[Ibid., p. 127.]

Tugan-Baranovsky is correct to say that social demand is not determined solely by individual consumption, or the total amount of social income. Certainly, as he says, social demand can be rapidly increased by capital accumulation, i.e. an increase in the demand for means of production. Still, his understanding of Marx's mode of reproduction is totally mechanical. He directly replaces machines for workers, but the theoretical task concerning the mode of reproduction is the question of how social production and reproduction are carried out overall, and for this purpose machines (means of production) must be assumed to be reproduced as machines. By raising the example of workers being replaced by machines (i.e. the tendency under capitalism for the organic composition of capital to constantly rise), he depicts a capitalism in which machinery is increased and workers decrease. This does not necessarily correspond with the reality of capitalism. In fact, the accumulation of capital and the transformation of surplus-value into profit leads not only to an increase of constant capital, but also the increase of variable capital, which means the inevitable growth the working class. Naturally, this does not lead to the expansion of department I [means of production] and decline in department II [consumer goods], but rather the expansion of both departments. Tugan-Baranovsky's view is basically nonsense, and ultimately reaches the following extreme conclusion:

If all the workers except one disappear and are replaced by machines, then this one single worker will place the whole enormous mass of machinery in motion and with its assistance produce new machines-and the consumption goods of the capitalists. The working class will disappear, which will not in the least disturb the self-expansion process of capital. The capitalists will receive no smaller mass of consumption goods, the entire product of one year will be realized and utilized by the production and consumption of the capitalists in the following year.
[Quoted in Tony Cliff, State Capitalism in Russia, p. 238.]

Therefore, he concludes that crisis cannot occur through under- consumption. Nevertheless, if a crisis were to break out, he says this "would not be because of an insufficient number of consumers, but because under conditions of capitalism, the equilibrium of distribution is completely unrealizable." Under capitalism, this equilibrium can be reestablished by weeding out the excessive expansion of companies through crisis. This is indeed the cause and significance of crisis for Tugan-Baranovsky

First of all, however, crisis does not concern the extent of consumption. Secondly, although a break in the "balanced distribution of production" is a crisis, for capitalism the disequilibrium between consumption and production is not simply an absolute disequilibrium, but rather a manifestation of the various moments and contradictions of capitalist production, and therefore only one of many kinds of disequilibrium that inevitably occur under capitalist production.

Tugan-Baranovsky claims that if equilibrium could be maintained, capitalism might continue eternally without crisis or collapse, and the accumulation of capital and replacement of workers with machinery, could also continue. For him, the exploitation and poverty of the working masses is not essential. However, the accumulation of capital and the replacement of workers with machinery are certainly not the same thing. The former is the increase of workers, while the latter a decrease, or the absolute decline of workers. If one imagines capitalist development to take the latter form, this has nothing in common with the actual process. What's more, if the ultimate figure of capitalist accumulation is a single worker operating an immense machine, and producing all of the wealth of society, this is indeed an odd concept resulting from an abnormal way of thinking. Workers would never, or could never, conceive of such an image of the outcome of capitalism, and instead imagine the future of capitalism and their own fate in terms of the continuous increase in workers and the combination of their own power.

Tsushima says that Tugan-Baranovsky's theory demonstrates that if capitalism were planned and organized, it could rapidly grow without the experience of crisis or stagnation. The low level of consumption of the working masses would in no way prevent this rapid development. This is indeed the ideology of state capitalism, and is an explanation that fits perfectly with the historical process of the Soviet Union and its relations of production. Of course, Tsushima emphasizes that Tugan- Baranovsky's theory is incorrect because production can develop in isolation from consumption only "relatively" and "to a certain degree", and ultimately is restricted by consumption.

Tsushima expresses approval for Tony Cliff's definition of state capitalism in its "Tugan-Baranovsky stage". This is the idea the Tugan- Baranovsky dogma has some meaning in economically backward countries, where the accumulation of the means of production is limited and the "the paramount need of the economy is the production of machinery in order to produce more machinery"
[Cliff, State Capitalism in Russia, p. 241.]

However, Tsushima argues that Tugan-Baranovsky's theory is mistaken, and production is ultimately restricted by consumption, hence state capitalist countries such as Russia will also be unable to avoid crisis. The reason no crisis appeared in the USSR, according to Tsushima, is that it was still in the "Tugan-Baranovsky stage" where the accumulation of the means of production is extremely low and so there is a great potential for continued accumulation. According to this argument, crisis could also break out under Soviet state capitalism if this accumulation would reach a certain limit, and the means of production arrive at the "point of saturation". For Tsushima, enormous military spending is one reason that this is avoided, but nonetheless Soviet state capitalism, like "liberal" capitalism" cannot avoid crisis. Even if a crisis were prevented, the country's economic growth, as Bukharin says, would be limited and stagnate.

Tsushima says that if development is at a low stage, or to borrow his phrase, "the saturation point of the production means" has not yet been reached, crisis will not appear. Of course, it is true that in cases of incomplete capitalistic development, the breadth and width of a crisis is not complete, and takes on something of a random appearance (e.g. crisis at the beginning of the nineteenth century), but this is still the appearance of a crisis, and moreover periodically reoccurs. To understand the problem of crisis, and thus the character of capitalist production and the basis of its contradictions, in terms of the inevitability arrival at the "saturation point of production means", reveals an incorrect understanding of the fundamental character of capitalist development.

According to Tsushima's view, overproduction is an excess over individual consumption, and appears as the "saturation point of the means of production", but overproduction also appears as the general overproduction of capitalist commodities, not merely as the "saturation point of the means of production". The use of the expression of a "saturation point of the means of production" exposes the fact that the Tsushima (=Cliff) standpoint boils down to a "theory of under- consumption". It is characteristic that Tsushima generally speaks of a "crisis of overproduction". Crisis certainly appears as overproduction, but in general overproduction is not a crisis. To say that overproduction is underconsumption, and thus to seek the cause of crisis in their direct comparison basically resembles underconsumption theories of crisis.

Tsushima also discusses the Bukharin model of state capitalism, which he learned from Tony Cliff. Bukharin's name appears here because in Imperialism and the Accumulation of Capital (1925), he argued that in the system of state capitalism (not Soviet state capitalism, but "state capitalism" in developed countries such as Germany) crisis would definitely not occur because production is organized from the "standpoint of capital" which is ultimately coordinated. According to Bukharin , in such countries "there is no particularly fast development of production"
[Bukharin, Imperialism and the Accumulation of Capital, (London: Allen Lane The Penguin Press, 1972) p. 226.]

Tsushima highly regarded Bukharin's theory, and said that it could be applied at a certain stage of state capitalism. Tsushima does say that under capitalist relations of production the fundamental cause of crisis is underconsumption, but he is not necessarily free from the spell of this theory. By saying that production is ultimately limited by consumption, and explaining crisis and social development from this perspective, he claims that state capitalism is generally a "stagnant (dormant) society". "I think that the Soviet bureaucratic state capitalism, principally or originally speaking, internally possesses the nature to become like the Bukharin model."[Tsushima, p. 276.] Tsushima says that the "Bukharin model" (dormant model) comes into being at a "certain development stage" of state capitalism". On the other hand, however, he claims that state capitalism in general is this Bukharin model of dormant capitalism. For Tsushima, crisis under state capitalism is avoided because of the planned economy, and up to a certain stage it is possible for "production for the sake of production", i.e. production isolated from consumption, to expand. However:

The development of the means of production also has a limit, and if this limit is surpassed it can be predicted that surplus production will necessarily occur and the tempo of the "plan" will drop, In short, this would come close to the Bukharin type of state capitalism (dormant state capitalism). Cliff says that "Bukharin's description applies to state capitalism which reaches saturation point in the means of production" [Cliff, p.242]. At this point, the contradiction between productive power and the relations of production emerges and is intensified.
[Tsushima, p. 274.]

Tsushima then sums up the views of Tugan-Baranovsky and Bukharin in the following way:

Tugan-Baranovsky seeks the "solution" of the contradiction between production and consumption in the separation of the two sides. Accumulation is seen as being able to develop rapidly and unlimitedly in complete independence from individual consumption (as long as it is organized and within the limits of productive capacity). This is the exact opposite of Bukharin's view of accumulation under state capitalism. He seeks the "solution" in slowing down the tempo of accumulation. For him, accumulation is possible, but its tempo is relatively slow. Production must therefore be "planned" in order to keep pace with individual consumption (of workers as well as capitalists). However, since this level of individual consumption for the working class as wage workers cannot extend beyond a certain limit, even if this is increased it will generally be low. A rise in the "consumption of capitalists", and increase in their purchasing power, can be "the motive power for production and for the production plan", but since "the number of capitalists is small", one cannot expect too much. Therefore, unlike the Tugan-Baranovsky model, "there is in this case not a specially rapid development of production" (but the ideal models of Bukharin and Tugan-Baranovsky both concur that crisis can be eliminated.
[Ibid., p. 272-3.]

By indicating the prospect of general stagnation in Soviet society, Tsushima makes an insight into the contradictions of state capitalism, but instead of concretely explaining these contradictions on the basis of the particularities of state capitalism, he only "applies" a theory of capitalist contradictions in general (from the one-dimensional viewpoint of the theory of underconsumption) to state capitalism. In other words, he "dissects" Soviet state capitalism with a type of underconsumption theory. His theory is essentially defective since it fails to evaluate the salient characteristic of state capitalism as capital, i.e. the fundamental limitations as capital. In state capitalist society, capital exists as state capital. In other words, it does not exist as "free" capital under conditions of general competition, and this shows, in a sense, it lacks something essential for capital. This is a decisively important point for the evaluation of state capitalism.

Tsushima basically clings to an evaluation of the tempo of state capitalist development on the basis of the criterion of whether or not it will reach a "saturation point" at some point in time. In other words state capitalism is seen as being essentially "production for the sake of production" and able to develop productive power without restrictions from consumption, but this "production for the sake of production", as Lenin points out, is ultimately restricted by consumption, and is thus necessarily relative. Nevertheless, this is the theory that even though a limit will be reached at a certain stage (this will lead to either crisis or general economic stagnation), this "saturation point of the means of production" is still quite far away since the Soviet Union is a developing country and it will therefore be able to carry out rapid economic development. The idea is that once this "saturation point" is reached, state capitalism will likely fall into general stagnation. This sort of theory regards capitalist development as being determined by the reciprocal relationship between the accumulation movement of capital (production for the sake of production), on the one hand, and the limited consumption of the working masses, on the other. In this sense, Tsushima is standing upon the theory of underconsumption.

Tsushima criticized the underconsumption theories of Sismondi and Rosa Luxemburg for directly juxtaposing the accumulation movement of capital with the underconsumption of the masses. He thinks this juxtaposition is necessary, but should not be made directly, and ultimately should be viewed as an indirect, or "ultimate" problem. Consequently, the contradictions and limitations of capitalism, according to Tsushima, clearly stem from the consumption limits of the masses, and this is also said to be the case for Soviet state capitalism. In fact, these contradictions are said to appear even more pronounced under state capitalism since it signifies the exploitation of even more of the working masses.

The Tugan-Baranovsky model, for Tsushima, was a type of state capitalism necessary in the Soviet Union because the USSR "began on the basis of a low level of productive power", but this model is viewed as inevitably running into the deadlock of overproduction. (This overproduction is said to not be the "panic" particular to capitalism, and is conceptually defined as a strange sort of constant and systematic overproduction). For this reason the Tugan-Baranovsky model became impossible, and the tempo of the "plan" was forced to slow down, leading to "stagnant state capitalism" (the Bukharin model of state capitalism). For Tsushima, Bukharin-style state capitalism appears as the typical "model", whereas the Tugan-Baranovsky model appears under certain conditions and is only a particular form.

Although superficially this may seem to account for the history and current situation of the Soviet Union, Tsushima's view is in fact a dogma. Certainly, Soviet state capitalism did turn into "stagnant state capitalism", but this was not due to the emergence of systematic overproduction (we do not know what this means exactly), the consequent "slowing of the tempo of the plan", or the suppression of the impulse towards the unlimited development of the productive power of state capital. Rather, it would be closer to the truth to say that the result was the exposure that state capitalism did not have such an impulse. State capitalism fell into general stagnation because state capital's impulse as capital was weak and fundamentally suppressed. Therefore, the "only" solution was not the direct shift to Tsushima's forced socialism, but rather "economic liberalism", i.e. the emancipation of state capital as capital.

An economy of state control is more functional and effective than a "liberal" economy when it is necessary to mobilize all of the economic, social and human power latent within a country to achieve certain goals within a short period of time, for example war or rapid economic development. In the case of Soviet history, such periods were the civil war (1918-1921), the economic construction of the thirties, and the war in the first half of the forties to defeat Hitler. However, such economic systems are inherently impermanent. "Wartime communism" could not avoid dissolution under the passive and active resistance of a wide stratum of the peasantry (i.e. petty bourgeoisie). The historical role of the Stalinist forced economy of the thirties came to an end along with the end of the Second World War, but its life was extended by the "Cold War". The shift from the state capitalism of the Stalinist system to a different system was already an objective necessity at the end of the fifties with Khrushchev's rise to power. Khrushchev began to "liberalize" a number of sectors, starting with agriculture, but this was nothing more than a beginning.

The system of state capitalism became a barrier to the further development of capital because it denied the free movement of capital, and thus prevented a lively and rapid development of thorough bourgeois "rationalization". The consequent naked exploitation and repression of a wide stratum of working people also leads to the development and intensification of class struggle. A system that was advantageous under certain conditions can become reactionary and anachronistic under a different set of conditions.

However, this is a conclusion that could certainly not be reached by means of the Tsushima (=Cliff) theory. Our conclusion exposes the fundamental failure of the Trotskyist call for a "supplementary revolution" (a purely political revolution), since this sort of "supplemental revolution" was in fact not the origin of the revival of proletarian rule or the shift to socialism, but instead the starting point of the movement of Eastern Europe countries and the Soviet Union towards becoming typical bourgeois states.

An evaluation of Tsushima’s Theory

The basis of Tsushima's criticism of Soviet "socialism" is seen in the following passage:

What is the standard with which to discuss the "revolutionary transitional period"-the "transitional period" to real socialist society (first stage of communism)? Politically this is the end of classes and class differences, and therefore the dissolution of the dictatorship of the proletariat; economically this is the appearance of the "labor certificate system" in distribution.
[Ibid., p. 18.]

It is one-dimensional to say that the "labor certificate" is the economic "index" of the appearance of socialism. The economic "index" of socialism, fundamentally, is the overthrow of the rule of capital, the abolishment of private property, the establishment of social communal ownership of the means of production, the elimination of the wage labor system, the sublation of class, and therefore the abolishment of commodity production and money. Only as a result of this does the "labor certificate" system come into operation in distribution. In other words, even though it isn't incorrect to say that the appearance of the "labor certificate" is an economic index of socialism, this is a trivialization of the meaning of socialism. Understanding socialism simply (or primarily) in terms of distribution relations, rather than the relations of production is a petty bourgeois viewpoint. Moreover, although it is not incorrect to say that the extinction of class is just a "political index", this is problematic because it blurs the fact that the essence of socialism lies in the social and production relations. Tsushima, at times, is aware of this. For instance, in many places he emphasizes that socialism in the "sublation of the law of value". For instance, he writes:

The fundamental characteristic of a socialist economy is common labor relations on the basis of the common ownership of the means of production, therefore the abolishment of the law of value and its replacement with a socialist planned economy. Anyone who doesn't recognize this is certainly not a Marxist.
[Ibid., p. 23.]

Tsushima also recognizes that socialism requires a high developmental level of productive power:

In terms of the common ownership of the means of production, the relations of common labor, and the abolishment of the law of value and wage labor relations (the commodification of labor-power), there is no difference between the first and second stages of communism. Consequently, they both can be included within the same communistic social structure. But the biggest difference between them is that in the first stage (socialism), this system of labor certificates is used in distribution. This is the reason that we say that this labor certificate system is the greatest economic index of socialism. The shift from wage labor or a transitional stage of the labor certificate to the system of labor certificates is, along with the dissolution of the dictatorship of the proletariat, the decisive indication that socialism has arrived.
[Ibid., pp. 24-5.]

Tsushima introduces labor certificates from the perspective of the distinction between the first and second stages of communism, rather than in terms of the importance of distinguishing between capitalism and socialism-communism. In other words, the labor certificates are necessary in the first stage, but in the second stage they would already be abolished, and thus the main characteristic of the first stage of communism, i.e. socialism, is the labor certificate system. However, Tsushima should first raise the question of how to distinguish between capitalism and socialism. This is the necessary way to raise the question, because the pressing issue today is capitalism or socialism, not the first stage of communism or the second stage:

Lenin held the view: state capitalism first, and then the transformation of state capitalism into socialism. Did Stalin's government achieve this transformation? This is generally being declared, but this is a complete lie and political myth. The truth is the exact opposite. Stalin only achieved the construction of a massive state capitalism. Moreover, what merits the greatest attention is that whereas state capitalism in Lenin's period promised to naturally develop into socialism, in Stalin's period this transformation could not be expected without a "second supplementary revolution" (Trotsky's expression). Stalin succeeded in constructing a gigantic state capitalism, while at the same time suffocating socialism to death.
[Ibid., p. 43.]

Of course, there is a great deal of confusion in what Tsushima is saying here. First of all, he dogmatically says that in Lenin's period, state capitalism promised to turn naturally into socialism, but what exactly does "promised" mean? Lenin saying this, and this being objectively "promised" are two entirely different things. No one would say that the fullest development of commodity production and capitalism would "promise" a natural transformation into socialism, because the opposite case would be more naturally assumed. Even adding the phrase "under the dictatorship of the proletarian", does not amount to a historical materialist theory. In history the fundamental thing is not human (or party) will or desire. To grasp the main motive force of history as will or desire is the characteristic of idealistic conceptions of history, not Marxism. The construction of Stalin's state capitalism and the "suffocation" of socialism was a necessity, not simply the result of Stalin's actions. One cannot say that this would not have happened if Lenin had been around. One could probably say that another type of state capitalism might have been built, but one cannot say that Lenin would have been able to build socialism

For Tsushima, one major reason that the possibility for Soviet state capitalism to turn into socialism was "cut off" was due to Stalin calling state capitalism "socialism". It is a truism to say that the advance from state capitalism to socialism was completely extinguished because state capitalism was called socialism. However, this sort of logic is formalistic, and is only idle talk that stems from an inability to understand and recognize the internal necessity of state capitalism even while employing this term. This is the idea that state capitalism was established by chance, and could turn into socialism depending on the will of Lenin or Stalin. Tsushima draws a clear line between himself and Trotsky, but on the most fundamental questions he reveals his own neo-Trotskyist nature.

Tsushima says that "there is no possibility that the Soviet Union would revert back to private capitalism" because it already was capitalist and would thus have no reason to turn into capitalism again. According to him, the USSR is state capitalism, and moreover capitalism advanced to an extreme. This is an insufficient understanding of the particular historical character of state capitalism. He doesn't consider the fact that while the Soviet Union is capitalism, it is "state capitalism", and therefore there is the possibility that it will progress or shift, although not "revert", to "private capitalism". Tsushima says that the bureaucracy in the Soviet Union "under the mask of 'communism', were a state capitalistic bourgeoisie as the product of the final stage of capitalism". For him, the USSR is a "thorough and complete state capitalism" a "completed state capitalism", a "100% state capitalism", in distinction from the typical sense of state capitalism developed from private capitalism. For example, he claims that the United States and other countries are "incomplete state monopoly capital", but the Soviet Union is "more complete state monopoly capital" . This view only blurs the distinction between state capitalism and state monopoly capitalism, and reduces it to simply a difference of quantity or degree. Tsushima's representative view is the following:
[Ibid., p. 208.]

In Russia, overall nationalization was certainly a product of the October socialist revolution, which made it possible and determined its content. Furthermore, the content of this initial overall nationalization was the communal ownership of the workers. Consequently, the October revolution was a socialist revolution. However, how did this change under the Stalinist regime? In the case of overall nationalism, this was probably intensified. But, at the same time this was substantially changed, with the communal ownership of the workers being weakened.

The state capitalism as the final stage (of capitalism) which Engels’ refers to (in Socialism: Utopian to Scientific) is something which is formed from a gradual development from ordinary monopoly capitalism. Therefore, in this case 100% state capitalism is difficult. The Stalinist regime, apart from a few differences and particularities, conforms to so-called 100% capitalism, or what Trotsky calls "integral state capitalism". This is formed in fact in the transitional period of a proletarian revolution in backward countries, under certain conditions as a decisive transformation (counter-revolution).
[Ibid., p. 210.]

Tsushima argues that in the internal development of private capitalism, a "100% state capitalism" cannot occur, but "if a counter-revolution occurs after a proletarian revolution (especially in an economically backward country), there is a full likelihood that this will occur in the counter-revolutionary process." Thus, the establishment of state capitalism in the USSR is viewed as the result of "counter-revolution". He says that Marx and Lenin were not able to predict this metamorphosis, which was a completely new phenomenon. Of course, the arbitrary judgment that the Stalinist socio-economic system was the result of "counter-revolution" amounts to a denial of the historical inevitability and foundation of state capitalism, and runs counter to Tsushima's theoretical premise and other positions. He often recognizes the historical inevitability of state capitalism to a certain extent.

Since state capitalism was necessary in the Soviet Union, the Stalinist system cannot be said to be the result of "counter-revolution". Due to the low productive power, a lack of heavy industry, the overwhelming power of the peasantry and the underdevelopment of the working class, state capitalism was unavoidable, and a victorious Stalinism was formed as its so-called "superstructure". But Tsushima, together with Trotsky, raises the notorious "wishful" outlook of history, according to which state capitalism in Russia could have been avoided had Stalin been defeated in the factional struggles and the counter- revolution not victorious.

According to Tsushima, there was a possibility for Stalin to be overthrown. In other words, "counter-revolution" in the USSR was not inevitable, and the "workers faction" might have been victorious. This period is said to be around the 13th Party Congress in May 1924. Already the year before he died, Lenin had fought against Stalin and expressed a decision to banish him, but Zinoviev and Kamenev opposed the "outsider" Trotsky and refused to cooperate with him since they feared him too much, and let the decisive moment pass, resulting in the victory of Stalin. Later Zinoviev and others said that cooperating with Stalin against Trotsky was the "biggest mistake of their lives", but it was already too late, and Stalin's power was established. Bukharin also supported Stalin during the debate over "socialism in one country", but in 1928 he finally became aware of the bureaucratic danger, called Stalin "Genghisk Kan" and turned against him, but the opportunity had already been lost and the victory of Stalin was ensured. Here Tsushima is repeating the views of Trotsky verbatim. This reduces the transformation of the Soviet Union to Stalin's personality, and is similar to Miyamoto Kenji's conception of history. Tsushima writes:

Trotsky insisted that the backwardness and isolation (defeat of European revolution) of the workers' state "heightened the danger of a return to capitalism". I also agree with this. But another reason for this transformation, and the decisive one, was the inner-Party struggles after the death of Lenin. That is, the fact that the Left Opposition was defeated by Stalin in the 1925-27 inner-Party struggles. The addition of these subjective conditions made this transformation total and inevitable?cThe victorious Stalinist faction replaced the Bolshevik Party's internationalist revolutionary policy (the historical materialist theory of socialist revolution) with the influential theory of "socialism in one country", but even more importantly was the fact that their main leader, Stalin did not understand Marx's theory of socialist society.
[Ibid., pp. 184-5.]

I think that if the Left Opposition had not been defeated, and socialism in one country had not been constructed, the Soviet Union would have been basically able to follow a transitional period. At least this possibility would have been great. Even if errors had arisen, they probably would have been limited to adjustments.
[Ibid., p. 187.]

We don't object to the idea that Stalin didn't understand Marxism, but we do raise a clear objection to the vulgar historical viewpoint that Soviet "socialism" was distorted and transformed because Stalin could not understand Marxism.

Although it is not true in every case, Tsushima basically juxtaposes a theory of socialism with the reality of the Soviet Union, and points out that the latter does not correspond to the principles or theory of socialism. For example, he frames the question in terms of "how the bureaucratization of the dictatorship of the proletariat might have been prevented". He often raises the [French] "Commune-model" principles that Lenin emphasized in State and Revolution, and says that Stalin threw out these principles, and they were completely eliminated in the Soviet Union. (E.g. "In Stalinist Russia, the important principles of the Commune state were completely crushed under foot.")
[Ibid., p. 127.]

Tsushima generally discusses the problem abstractly using one-dimensional terms. To prove that the USSR is not socialism, he uses the method of contrasting the reality of the Soviet Union with an abstract theory of socialism. This is a formalistic, exterior theory that uses the method of juxtaposing an abstract theory and "principles" of socialism with the reality of the Soviet Union, and then deciding whether they are different or not. Such criticism is necessary and unavoidable, as Hegel emphasized, as the initial criticism (cognition) of an object. This is what Hegel calls "cognition as understanding" [Verstand] in contrast to his dialectical cognition of "reason" [Vernuft]. The former sort of cognition is formal and external, and does not grasp something internally in its historical necessity. Tsushima declares that the Soviet Union runs counter to the theory of socialism, but the question how this was historically inevitable or why the USSR was not a socialist society, remains outside of cognition. The Soviet Union is simply distinguished from socialism, and posited externally. This is precisely the limitation of cognition that Hegel indicated. According to Hegel, this is Kant's epistemology, and the standpoint of limited "understanding". Tsushima merely says that state capitalism is "not socialism", without indicating its historical necessity or foundation. At best, this is explained as the outcome of some random historical "mistake", such as the Stalinists' "betrayals" or "mistaken", or as a defect in Marxist thought. Therefore, the solution to the problem is seen as a return to some sort of "correct" method or thought. This type of cognition is impotent compared to greater scientific cognition.

Tsushima does often raise the problem historically (dialectically), but his underlying tone remains at this stage of "understanding". It is therefore reasonable for him to introduce the "labor certificate system" as the theoretical basis for his criticism of Soviet "socialism". For Tsushima, this is the "ideal type" of socialism. Once this ideal type has been established, all that remains is to determine whether the reality of the USSR corresponds with it or not. This is Tsushima's main theoretical concern. His formalistic and undialectical method is expressed in his criticism of Stalin for failing to understand the fundamental difference between reproduction on the basis of the wage system and reproduction in a system of labor certificates. Basically he is only saying here that the USSR is not socialism and does not match the ideal of socialism, without commenting on the historical necessity of Soviet society. He has the following to say about the "labor certificate system":

We should think about what the labor certificate system is. When we look at the reality of the Soviet Union, this system is nowhere to be found, and moreover there is nothing heading in that direction. This cannot even be found in the realm of theory. What has appeared instead is a non-egalitarian system of piece-wages that is given the name socialism.
[Ibid., p. 35.]

Instead of historically considering why the wage system existed in the Soviet Union and took such a brutal form of exploitation, Tsushima simply attacks it for running counter to the principles of socialism. It is certainly true that the piece-wage system runs counter to the principles of socialism, but the question is why this occurred. Without exposing its necessity, the workers' criticism of Soviet "socialism" will never "be raised" to the level of historical materialism.

But we must recognize that Tsushima's critical method, in a sense, is historically justified and inevitable. Personally, I first came to the realization that the Soviet Union should be viewed as state capitalism after reading Tsushima's book in the summer of 1960. From the fifties to the sixties, those who abandoned the "common sense" view that the Soviet "system" was socialism, in favor of the theory of the transitional state ("degenerated" workers' state) or state capitalism, reached this position via the works of Tony Cliff and Tsushima Tadayuki. Despite their faults, it would be a mistake to not recognize their enormous significance. Even while relying on Trotsky, they had the insight and courage to criticize Soviet "socialism" for not being socialism. On this point, they have nothing in common with complete philistines like Miyamoto Kenji and Fuwa Tetsuzo.

Let me relate one personal episode. I don't recall the exact month or year, but some time in the early sixties, I visited the house of Tsushima in Tokyo and we talked for two or three hours. At the time, I didn't have the slightest interest to visit Kuroda Kanichi, but I had been greatly impressed by Tsushima's Criticism of Soviet "Socialism". The result of our conversation, however, was disillusioning. I could almost overlook Tsushima's statement-borrowed from Kitakoji Satoshi who was saying such stupid things then-that since he was a scholar and revolutionary intellectual, not an activist, "the elaboration of the strategy of economic struggles is his greatest practical task today". But he began to irritate me with his view that the cause of the "transformation" of the Soviet Union was the Left Opposition's failure to unite internally in 1925-26 and their defeat at the hands of Stalin. This turned out to be my only visit to his house-Tsushima, for his part, probably considered me to be a disrespectful young man.

Tsushima's theory of the Soviet Union explains the Soviet Union's "transformation" from its "backwardness", on the one hand, and the decisive moment of the Left Opposition's defeat due to the "tactical" mistake of waiting too long to fight against Stalin or not fighting correctly. According to Tsushima, the Thirteenth Congress of the Soviet Communist Party was the decisive moment, and since they could not topple Stalin at that time, there was no way to crush him in the future. Tsushima claims to refuse arbitrary evaluations of history or Stalin's "theory of force", and to be faithful to the materialist conception of history, but where, exactly, is the consistent historical materialism in such a view of history? If Soviet history could have been changed depending on the struggles of Trotsky and others and advanced in the direction of socialism, then this same possibility cannot be denied for Stalin. Even though Tsushima criticizes Stalin's "theory of socialism in one country" for being a "theory of force" where the state "jumps over" the real conditions by means of violence in order to build socialism, there is little difference between this and Tsushima's own theory that the Soviet Union might have shifted to socialism and not "transformed" depending on the outcome of the struggles of the anti-Stalinists. Both are arbitrary theories of history.

Tsushima was critical of Trotsky and Trotskyism, but his historical significance was as a transitional existence incapable of breaking through these limitations. This is typified by the fact that like Tony Cliff, he understood Soviet state capitalism, in the extremely "Trotskyist" manner, as the "outcome of counter-revolution". He also shared the Trotskyist illusion of a "supplementary political revolution", and argued that the revival of the "labor certificate system" and "correct" socialist policies would make it possible for the Soviet Union to be socialist again. The position of Trotskyism, neo-Trotskyism, as well as Stalinism is the standpoint that seeks to "reform" the Soviet system. They all converge on the point of reformist opportunism, and as the bourgeois essence of the Soviet Union is exposed all real difference between them are disappearing (what they call "reform" or political revolution ultimately boils down to capitalism).

When we say that Tsushima essentially does not understand capitalism, we mean that he blurs, or basically "forgets", the fundamental point that capitalism is a society founded on the private ownership of the means of production. Trotsky at least understood this, and therefore thought that as long as the private property system (private ownership and the exchange of products) was not resurrected, the Soviet Union would not be capitalist. Trotsky also maintained that as long as the collectivized (nationalized) means of production inherited from the October revolution were preserved, the USSR would remain a workers' state and transitional society. Tony Cliff and Tsushima, who broke through some of Trotsky's theoretical limitations by developing a theory of state capitalism, would have done well to discard Trotsky's weak points, but they end up going to the opposite extreme with the abstraction of an "integral" state capitalism without the element of private property.

The idea of an "integral" state capitalism is a dogma. First of all, a wide stratum of peasantry, i.e. private property owners, existed in the Soviet Union, and this fundamentally determined the policy of NEP (a type of capitalism including commodity production and a market economy) in post-revolutionary Russia. Even after the agricultural collectives were organized, the principle governing the means of production was collective, not social, ownership. The land was formally nationalized, but was possessed by the cooperatives under their collective ownership. The logic of private property functioned, within certain limitations, state enterprises were managed under an independent accounting system (khozraschyot), and the rights of the enterprise directors were strengthened. Of course, in one aspect the enterprise directors were state bureaucrats, but on the other hand they were industrialists (i.e. bourgeoisie) and functional capitalists. The state bureaucracy was charged with the mission of capitalist development in the form of state-organized capitalism (state capitalism). In this sense, they were an organ to unite and organize private property owners. The general fantasy that the state is a community, or what Marx calls an "illusory community", was even more pervasive in the Soviet Union.

Contemporary capitalism, with its highly socialized mode of production, interwoven with stock-capital like the mesh of a net, is based on the principles of private ownership and there is always a deep contradiction between the highly developed production relations and productive power and the system of private ownership. Stock-capital, for example, is not the negation of private property, but rather the combination of capital (i.e. private ownership). State capital is also merely capital organized by the state. In terms of external relations, it is obvious that capital organized by the state follows the logic of private property.

It is correct to say that state capitalism, generally speaking, moves, unfolds and develops within a constant contradiction between the essence of capital as capital and its nationalized form. This contradiction predominates under the form of national ownership and remains in full force, continuously unsettling the foundation of Soviet "socialism" (consider the example of China after the revolution with its repeated history of flux between "liberalization" and strengthened state control). State capitalism is the "nationalization" of the means of production, on the one hand, and "capitalism" on the other hand. Capital wants to develop as private capital, and is unable to "forget" its nature as capital. We have emphasized this point in opposition to the views of Trotskyists, as well as Tsushima and Tony Cliff. But to give Tsushima his due, we must introduce the following passage from his book:

The fact that the system of wage labor was dominant, surplus-value was created and appropriated, and state power became bureaucratic, is ample indication that property was bureaucratically owned (owned by the bureaucracy as a group). Moreover, this bureaucratic ownership took the form of an independent accounting system (business principles), and despite the nationalization of the means of production, it corresponded with the wage system and the creation and appropriation of surplus-value, rendering each other mutually possible. The wage system and the creation and appropriation of surplus-value is not possible under all forms of the ownership of the means of production, but only under conditions of capitalistic private ownership, and the bureaucratic ownership in the form of independent accounting (principles of business) can be said to be one variation of this. At any rate, as Max Shachtman has pointed out, nationalized ownership in Stalinist Russia is "pseudo-common".
[Ibid., pp. 213-4.]

However, Tsushima only says this in passing, and does not develop this idea. Generally he treats the Soviet system in the abstract form of an "integral" state capitalism. From this viewpoint, he retreats to the abstract discussion of the mode of accumulation, and falls into the line of reasoning that state capitalism is essentially the "Bukharin-model" of declining accumulation, but since Russia was an extremely backward country with little accumulation of the production means, it was able to rapidly develop without easily reaching a "condition of saturation", and the abnormally high proportion of military production had great significance for this purpose. Even supposing that it were true that state capitalism could turn into this sort of stagnant society due to its nature, this is less a question of the "mode of accumulation" of state capitalism, than the contradictions arising from capital as state capital. These contradictions are what determined the decline of state capitalism, its constant impulse towards private capital, and its inclination and shift towards this in reality. Tsushima is unable to explain this impulse of state capitalism towards private capital, its actual shift, or the necessity of this. Tsushima does, however, emphasize that the nationalization of the means of production does not directly equal socialism:

It has become common knowledge that the nationalization of the means of production is the starting point of socialism. Still, this is the case for both socialism and state capitalism. The question in this case, first of all, is the nature of the state, and, secondly, whether this includes the sublation of the law of value and the wage=labor relationship (the commodification of labor-power). No matter how much a state may claim to be a "workers' state", without being organized along the so-called "Commune-model", it will in fact return to a bureaucratic dictatorship, and without any advance towards the second point, this will completely negate its socialist nature. Those who uncritically equate national ownership with socialism, end up moving from Marxism to petty bourgeois socialism (i.e. revisionism). But there are many people who equate nationalization with socialism!
[Ibid., p. 24.]

Here Tsushima offers the ambiguous concept of whether a transitional period "has an inclination to develop" towards socialism or not. One could point to NEP in the twenties, for example, and say either that it did or did not have an "inclination to develop" towards socialism. One could say that in a transitional period there are remnants of commodity production and capitalistic elements, and to overcome this requires a "long and painful" step-by-step process, or even that the temporary development of "commodity production and capitalistic elements" could be an "inclination to develop" towards socialism (Lenin in fact positioned NEP in this manner). If one accepts Tsushima's concept of a transitional society towards socialism, the question of whether it has an "inclination" towards socialism is connected to the evaluation of the Bolshevik government. Trotsky thought that even the Soviet Union under Stalin's rule had such an "inclination", whereas we reject this idea. Tsushima thus proposed the following form to "solve" the solutions of state capitalism:

Will the Stalinist regime be able to free itself from the above-mentioned principle contradiction? There is only one answer to this question. This, as I have already briefly mentioned, is the change from capitalist accumulation to socialist accumulation. Bukharin says: "In socialist society, advancing mass consumption is a motive force to increasingly develop industry itself. In our country, production already is not carried out for the self-augmentation of wealth, but as a means to increase consumption." This is not a falsehood, but something that must be accomplished in reality. And in order for this to be fully accomplished, the change from a wage labor system to a system of labor certificates is crucial.
[Ibid., p. 277.]

Will the Stalinist bureaucracy be able to accomplish this task? The answer is definitively no. This is because they are counter-revolutionaries who have in fact denied Marx's system of labor certificates, and attached the name "socialism" to the extremely exploitative system of piece-wages (norm system). Moreover, in order to change to a system of labor certificates, they would have to give up the special rights they possess (the appropriation of surplus-value, etc.) which is an unthinkable action.[Ibid., pp. 277-8.]

Tsushima's solution is the "change from capitalist accumulation to socialistic accumulation". However, what do these two terms mean exactly? "Capitalist accumulation" is the conversion of surplus-value into capital, and "production for the sake of production" which takes place under conditions of constant disequilibrium and oscillation, and is expanded production within crisis. On the other hand, "socialist accumulation" is expansion for the sake of consumption, and the corresponding expanded reproduction of social production under the conscious control of people. However, "capitalist accumulation" is the outcome of capitalist relations of production, while the later is the result of the triumph of socialist relations of production. If one discusses "capitalist accumulation" and "socialist accumulation" by abstracting and separating them from their determining relations of production, this becomes empty talk. It is a silly illusion to think that socialism can be realized in the Soviet Union by means of some "policy change" without revolution.

Tsushima calls the Stalinist "counter-revolutionary", but his criticism is based on their "denial of Marx's system of labor certificates", i.e. their failure to implement this Marxist policy in the Soviet Union. However, if the Stalinists are a state capitalist bureaucracy it is natural and inevitable that they would not realize a labor certificate system, and this only shows that they are faithful to their class position and consistent. To criticize the bearers of state capitalism for "betraying" Marxism or being "counter- revolutionary" represents the substitution of class-based historical criticism, for moralistic anger, and is a step away from Marxism. This is essentially the level of Trotsky and Trotskyists, and Tsushima is the same:

I analyzed the nature of the accumulation of capital in the Stalinist regime above, and indicated the principle contradiction between productive power and the relations of production. The fundamental solution of this contradiction is impossible without the elimination of the commodification of labor-power and wage labor system that forms the fundamental basis of capitalism. But I simply said that the Stalinist bureaucracy would be unable to voluntarily do this. The fact that the Stalinists themselves cannot voluntarily act to solve this principal contradiction (between the productive power and relations of production) is the economic basis for the "second supplemental revolution" in the Stalinist regime. This would topple the basis of the various political contradictions and conflict due to the bureaucratic dictatorship, and could also be said to form the basis of the "second supplementary revolution" (premised on the development of productive power within the Stalinist regime).
[Ibid., p. 278.]

While defining the Soviet Union as "state capitalism", he ends up relying on Trotsky's concept of a "supplementary revolution". Trotsky also used the term "political revolution" to express this prospect of revolution. He used this term because he thought that the Soviet Union had already achieved the nationalization (common ownership) of the means of production, and hence established the "foundation for socialism". The Soviet state had "degenerated", but as long as it retained its foundation of the nationalized means of production, it was still a workers' state. As long as the means of production are in the hands of the workers' state, he felt there was no reason or necessity for another "social revolution", and advocated a "political revolution" to wipe out the autocratic rule of the Stalinist bureaucracy, and restore proletarian democracy. Following this revolution, it was thought that socialist relations of production would appear. On the basis of this fantasy of a "political revolution", Trotsky and the Trotskyists have continuously called for the "defense of the Soviet Union", thereby essentially denying the bourgeois, reactionary and imperialist character of the Soviet state. Even Tsushima, who raised the theory of state capitalism and criticized Trotskyists, emphasized this "second supplementary revolution". Tsushima's standpoint may have been inevitable considering his transitional role and shortcomings. He is representative of the generation of "leftwing" intellectuals in Japan who tried to overcome both Stalinism and Trotskyism, while being caught at the level of Trotskyism.

Why it was necessary for the Soviet Union to move to "free" capitalism, instead of state capitalism being able to shift directly to socialism as the Trotskyists and Tsushima assumed. Why did their assumptions amount to nothing but an illusion? What made the shift from state capitalism to "free" capitalism inevitable? The answer to these questions can be found in the essence of state capitalism. The Soviet Union and China are not the "completion" of capitalism, the end of capitalist development, or the highest development of capitalism. Rather, they are one form of capitalist development, determined by the given historical conditions and a certain position in the world, is unavoidable, to an extent, for economically backward countries. Rather than representing the "completion" of capitalism, the Soviet Union was a distorted capitalism in which the existence of capital as capital was extremely suppressed and limited. Without understanding the particular characteristics of state capitalism, it is certainly impossible to understand state capitalism today and its "liberalization".

Endnote 1

"It is true that even then it will be necessary for society to know how much labour each article of consumption requires for its production. It will have to arrange its plan of production in accordance with its means of production, which include, in particular, its labour-powers. The useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan. People will be able to manage everything very simply without the intervention of the much-vaunted "value".* [Engels' footnote: *As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the politico-economic concept of value. (Deutsch-Franzosische Jahrbucher) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital." (Engels, Collected Works Vol. 25, p. 295.)

Endnote 2

In a 1931 speech delivered at a conference of economic executives, Stalin spoke of the introduction of a "discriminatory" wage system:

"What is the cause of the fluidity of manpower? The cause is the wrong structure of wages, the wrong wage scales, the 'Leftist' practice of wage equalization. In a number of factories wage scales are drawn up in such a way as to practically wipe out the difference between skilled and unskilled labour, between heavy and light work. The consequence of wage equalization is that the unskilled worker lacks the incentive to become a skilled worker and is thus deprived of the prospect of advancement; as a result he feels himself a 'visitor' in the factory, working only temporarily so as to 'earn a little money' and then go off to 'try his luck' in some other place. The consequence of wage equalization is that the skilled worker is obliged to go from factory to factory until he finds one where his skill is properly appreciated. Hence, the 'general' drift from factory to factory; hence, the fluidity of manpower.

In order to put an end to this evil we must abolish wage equalization and discard the old wage scales. In order to put an end to this evil we must draw up wage scales that will take into account the difference between skilled and unskilled labour, between heavy and light work. We cannot tolerate a situation where a rolling-mill worker in the iron and steel industry earns no more than a sweeper. We cannot tolerate a situation where a locomotive driver earns only as much as a copying clerk. Marx and Lenin said that the difference between skilled and unskilled labour would exist even under socialism, even after classes had been abolished; that only under communism would this difference disappear and that, consequently, even under socialism "wages" must be paid according to work performed and not according to needs. But the equalitarians among our economic executives and trade-union officials do not agree with this and believe that under our Soviet system this difference has already disappeared. Who is right, Marx and Lenin or the equalitarians? It must be assumed that it is Marx and Lenin who are right. But it follows from this that whoever draws up wage scales on the 'principle' of wage equalization, without taking into account the difference between skilled and unskilled labour, breaks with Marxism, breaks with Leninism."
[Stalin, "New Conditions, New Tasks in Economic Construction", in Problems of Leninism (Peking: Foreign Languages Press, 1976), pp. 537-8.]

"And what does promoting them to higher positions and raising their wage level mean, what can it lead to as far as unskilled workers are concerned? It means, apart from everything else, opening up prospects for the unskilled worker and giving him an incentive to rise higher, to rise to the category of a skilled worker. You know yourselves that we now need hundreds of thousands and even millions of skilled workers. But in order to build up cadres of skilled workers, we must provide an incentive for the unskilled workers, provide for them a prospect of advancement, of rising to a higher position. And the more boldly we adopt this course the better, for this is the principal means of putting an end to the fluidity of manpower. To economize in this matter would be criminal, it would be going against the interests of our socialist industry."
[Ibid., p. 539.]

"True, our worker does not suffer from unemployment; he is free from the yoke of capitalism; he is no longer a slave, but the master of his job. But this is not enough. He demands that all his material and cultural requirements be met, and it is our duty to fulfill this demand of his. Do not forget that we ourselves are now making certain demands on the worker - we demand from him labour discipline, intense effort, emulation, shock-brigade [Stankhovite] work. Do not forget that the vast majority of workers have accepted these demands of the Soviet government with great enthusiasm and are fulfilling them heroically. Do not be surprised, therefore, if, while fulfilling the demands of the Soviet government, the workers in their turn demand that the Soviet government should fulfill its obligations in regard to further improving their material and cultural condition."
[Ibid., p. 540.]

"We must now ensure the supply of three times, five times the number of engineering, technical and administrative forces for industry if we really intend to carry out the programme of the socialist industrialization of the U.S.S.R."
[Ibid., p. 546.]

"No ruling class has managed without its own intelligentsia. There are no grounds for believing that the working class of the U.S.S.R. can manage without its own industrial and technical intelligentsia."
[Ibid., p. 547.]

Endnote 3

“State Capitalism: Is an accumulation possible here? Of course. The constant capital grows, because the capitalists’ consumption grows. New branches of production, corresponding to new needs, are continually arising. Even though there are certain limits to it, the workers’ consumption increases. Notwithstanding this ‘under-consumption’ of the masses, no crisis can arise, since mutual demand of all branches of production, and likewise consumer demand, that of the capitalists as well as of the workers, are given from the start. Instead of ‘anarchy of production’?a plan that is rational from the standpoint of Capital. If there is a ‘miscalculation’ in means of production, the surplus is stored, and a corresponding correction will be made in the following period of production. If, on the other hand, there has been a ‘miscalculation’ in means of consumption for the workers, this excess is used as ‘fodder’ by distributing it amongst the workers, or the respective portion of the product will be destroyed. Even in the case of a miscalculation in the production of luxury articles, the ‘way out’ is clear. Thus, no crisis of over-production can occur here. The capitalists’ consumption constitutes the incentive for production and the plan of production. Hence, there is no particularly fast development of production (small number of capitalists).”
[Bukharin, Imperialism and the Accumulation of Capital (London: Allen Tate and the Penguin Press, 1972), p. 226.]