In Part 1 of the DWS series, I laid out what I consider to be a theory of deformed workers’ states. That theory posited that such states came into existence under distinct conditions. Petty-bourgeois movements, usually anti-imperialist, were supported by discontented layers of workers and/or peasants and were thereby forced to smash the bourgeois state managed by the pro-imperialist collaborators and compradors; once in power, these petty bourgeois forces, if facing a heightened threat from imperialist countries, could turn to the Soviet Union as a model and source for material support, collectivizing the economy with the instituting of central planning. Lacking such a potential patron today, or a system of workers’ states that could provide support, the creation of new deformed workers’ states is not on the agenda and has not been for decades.

But sweeping nationalizations did not just occur in the deformed workers’ states. Less comprehensive expropriation of private capital occurred throughout the developing world, often as a result of newly acquired independence, from the 1950s to the 1970s. In Ethiopia under the Derg, in Burma under Ne Win, in Mozambique under FRELIMO, in Syria under Assad, and in many other countries besides, most if not all of the commanding heights of industry were brought under state control. As with the deformed workers’ states, the purpose of these nationalizations was to embark on a road of crash development for the purpose of nation building. Yet in the case of the countries mentioned above (and many others besides), the large-scale nationalizations were a part of a political program and a state apparatus firmly committed to the development of private capital for the benefit of the nation as a “stage” that was purported to be necessary before socialism became attainable. Even in cases where the existing bourgeois state had been smashed violently through an independence struggle, the ruling apparatus that emerged was one that set about quickly reconsolidating a capitalist state, albeit one managed by a party that supposedly had an interest in advancing to socialism at some future date, after the capitalist stage had been completed.

Despite the grandiose claims of the ruling parties of these states, the Soviet bureaucracy was aware that these states were neither “socialist” nor dictatorships of the proletariat (or workers’ states). The official press from the 1960s onward claimed that these were states embarking down the “non-capitalist path” or “non-capitalist road” of development, led by parties of a “revolutionary democratic” or “national democratic” nature. In the words of one Soviet theorist, governments of this type represented “a revolutionary-democratic dictatorship of semi-proletarian and non-proletarian working masses and petty-bourgeois strata all anxious to see independent progressive development” (Socialism and the Newly Independent Nations, 77). If any of this language sounds familiar, that is because it should. These supposedly “revolutionary-democratic” states abided by the default program of all Stalinist parties from 1934 onward, and which was also practiced initially by the forces that created the deformed workers’ states only after imperialist maneuvers compelled them to abandon that program. That program, of course, was the popular front, entailing as it did anti-revolutionary collaboration with capitalism.

“Proletarian Bonapartism”

Whatever the problems their analyses contained, the Soviet theorists demonstrated at least a modicum of comprehension in refusing to label these countries’ governments as workers’ states. In some of them, the industrial and urban working class constituted a tiny fragment of the population. And except in the most developed of these societies, the economy was overwhelmingly dominated by a combination of subsistence agriculture and coercive feudal-type rent-taking by landlords enmeshed in wider networks of market relations–a kind of semi-feudal transitional form of production akin to postbellum tenant farming in the U.S. South.

Such realities seem to have been of small importance to Ted Grant, an ostensible Trotskyist who lent his name to a “revolutionary” tradition marked by such practices as support for police unionization and long-term strategic entry into reformist labor parties. In his book The Unbroken Thread Grant gave his take on how to understand the creation of deformed workers’ states from the perspective of Trotsky’s theory of permanent revolution:

“Trotsky’s Theory of Permanent Revolution forms the starting point of a Marxist description of the revolutionary processes in the underdeveloped countries: the colonial revolution. But in the transitional period between capitalism and the establishment of workers’ states the picture has been enormously complicated: given the delay in the revolution in the advanced countries, the degeneracy of the world-wide Stalinist movement and the subsequent absence of mass revolutionary parties in the third world, all kinds of new social formations unforeseen by Trotsky have been possible.

Under these conditions, with social and economic crisis reaching a pitch, it has been possible for the revolution to unfold, not on the lines of the ‘classic’ Russian pattern, but in the manner of a distortion of the Permanent Revolution. Based upon the already-present model of the totalitarian bureaucracy in Russia, regimes have been established on the same lines: with state ownership and planning of the economy, one-party government and the suppression of democratic rights. Moreover, these have been established on the basis of peasant-based wars, with a variety of petit-bourgeois or Stalinist leaderships, with the working class playing a relatively minor role.”

What is missing from this formulation is an explanation for why individuals upholding a thoroughly reformist and petit-bourgeois program (Stalinism sans state power) would deliberately choose to fashion a planned economy premised on the class power of the proletariat.  One only arrives at this answer later in that section of the book, in a republished article from 1978 where Grant claims that “proletarian bonapartism” (defined by Ted Grant as a bonapartist government that rests on — and the wording here is important — a “nationalised economy”) is the product of some objective force he dubs “attractive power.” Or as Grant himself put it: “Under the conditions of the decay of capitalism-landlordism in the colonial countries, all the social contradictions are aggravated to an extreme. Social tensions reach an unbearable level. Hence in one country after another in Asia, Africa and Latin America, bourgeois democracy is replaced by bourgeois Bonapartist dictatorships or proletarian Bonapartist dictatorships.”

Ted Grant, founder of the Militant Tendency, the political forebear to the IMT and CWI.

If for most Trotskyists the creation of deformed workers’ states was the product of a specific set of historical and above all political circumstances that transmitted pressures to petty-bourgeois bureaucrats wielding at least some agency in their decision making, they were in Grant’s understanding purely the outcome of international structural processes of decolonization and economic crises in the epoch of decay. The politics and program of the bureaucrats is left out, replaced instead by the “attractive power” provided by the economic successes of the fully “nationalised” economy of the Soviet Union. The passive voice in the last quote (“is replaced”), along with the choice of the words “nationalised economy” in his description of proletarian bonapartism, is not accidental. For Grant, nationalization of the strategic core of the economy simpliciter is an objective conduit for working class power, independent of how and on whose behalf that nationalization functions, just as decolonization in the shadow of “attractive power” objectively establishes, seemingly independent of the role or decisions of bureaucrats in a specific political context, “proletarian bonapartist” states. (These methodological errors show some of the objectivist tendencies in Grant’s writings and political tradition, others of which will be the subject of a later post).

In Grant’s view, then, these bonapartist states were not just pursuing some “non-capitalist path.” Neither were they class dictatorships of multi-class popular-democratic fronts of independent progressive forces, as the Soviet theorists would have it. For Grant, these states were in fact workers’ states which had been qualitatively transformed from the bourgeois variant of third-world bonapartism: “In Vietnam, Laos, Kampuchea, Burma, Syria, Angola, Mozambique, Aden, Benin, Ethiopia and as models, Cuba and China (which in their turn had the model of Eastern Europe as a beacon showing the way) there has been a transformation of social relations” (emphasis in original). The muddling together of states as diverse as Cuba, Aden, Benin, and China is only possible if one takes the position that the class line lies along the process of mass nationalizations, without analyzing the political or economic content of how those nationalizations functioned in the societies where they occurred.

Prebendal Politics

The nationalizations which swept the third world in countries as disparate as Benin and Burma are best understood not as the expropriation of capital but rather as a kind of primitive accumulation of capital. In contrast to Cuba or the Soviet Union, there was no decisive break from imperialist economic institutions. These states almost invariably maintained a “non-aligned” posture during the Cold War in order to maximize economic assistance from both blocs in the hopes of facilitating integration as an independent and formidable player in the global capitalist economy. Their nationalizations were attempts to shield domestic industry from foreign ownership while creating controlled conditions for the accelerated development of a bourgeoisie capable of competing with imperialist firms. Compensation was frequently paid either to foreign or domestic capitalists whose assets were seized. And many private businesses were simply not seized at all, in keeping with the notion that strengthening the national bourgeoisie, with whom the state sector was to work in tandem in cultivating a nationally independent industrial basis, was a key objective in the existing political stage. In the absence of the same push into the arms of the Soviet Union, the indigenization of industry could proceed apace without the creation of a planned economy.

But not without the nationalization of large portions of industry. The class nature of these nationalizations can be seen if we take a single example: Burma.  The “Burmese Way to Socialism” was introduced following the coming to power of General Ne Win, via a coup d’etat staged with the assistance of the rest of the Burmese military. In 1963, a year after taking power, Ne Win’s “Revolutionary Council” proceeded to implement a law on nationalization that stipulated in minute detail how compensation was to be paid to the owners of seized property (including foreign owners). Through the duration of the Ne Win regime, Burma maintained good relationships with the economic instruments of Western imperialism (GATT, the IMF, the World Bank). It also did brisk trade with the firms within those countries. Between 1966, the year after the largest foreign firms had been nationalized, and 1969, the volume of Burmese trade with Western Europe was three times what it was with the Soviet Union and states aligned with it (see page 812 of Stifel’s “Economics of the Burmese Way to Socialism”). By the end of the decade, toward the height of nationalization, 54% of the workforce continued to be employed by the private sector (Brutents, National Liberation Revolutions Today, Vol. 2, 101). And by 1984, seven years after the Right of Private Enterprise Law was enacted, three quarters of the primary sector of the economy was in private hands (Trade and Economic Development of Myanmar, p. 103). These facts have led Cho Cho Thein, now a professor of applied economics at Yangon University, to conclude that despite proclamations to the contrary, “there was no comprehensive socialization of property, and private property ownership remained substantially intact in the main economic sphere of agriculture which supported two-thirds of the country’s population.” At the same time, “[p]rivate property also occupied a large role in the smaller scale manufacturing and the tertiary sector” (Ibid.). Contrary to claims by the IMT that Ne Win “nationalised all land, industry and commerce,” the program of nationalization pursued by Ne Win’s junta/party was to stimulate domestic private enterprise by creating hothouse conditions, not to obliterate it through full collectivization and the institution of socialistic planning.

Ne Win, bonapartist capitalist ruler of Burma from the 1960s through the 1980s

Such a program is evident in how, throughout all these years, the public sector was replete with bribery, skimming, back-channel deals and kickbacks involving black markets, and other forms of corruption were endemic — so much so that they literally structured the state itself. This phenomenon was aptly described by Donald Seekins, a professor of Southeast Asian Studies at Meio University in Okinawa, Japan, in his State and Society in Modern Rangoon (pp. 143-144): “[N]etworks of patron-client relations suffused the society; these, too, were hierarchical, but they also implied reciprocity. Both superior and inferior needed each other, and prospered from their mutual long-term collaboration. The state could not be completely self-sufficient: it needed to extract resources from society in order to continue in power. Tax revenues were not sufficient to fund its programs.” As a result, Seekins continued, “the military elite was obliged to establish mutually supportive relationships with the most successful black market dealers, giving them official protection and information about the state’s periodic crack-downs on smuggling (vital information that was not available to less well-connected black marketers)” in exchange for cash. According to Seekins, this sort of activity was not abnormal. Rather, “all members of the elite (and their wives) dealt in the black market.” And the black market was so extensive that, in an estimate of several scholars that would have shocked even Gorbachev, it accounted for as much as 80% of actual economic activity (Maureen Aung-Thwin, Thant Myint-U and Thant Mynt-U’s “Burmese Ways to Socialism,” p. 73). The result was that the purging of a high-level official had profound economic consequences throughout the country. Instead of being a bureaucrat who sat atop a planned economy, where patronage networks operated on the basis of scaling up the bureaucracy to enjoy a few extra perks but primarily political prestige and authority, Ne Win was a dictator precariously perched above rival clans and networks of military and government officials who had been using and would continue to use their offices to pocket as much as they could — patronage networks that predated Ne Win and opted to place him power.  Beginning in the 1970s, these nationalizations were gradually undone, and the military junta that had placed Ne Win in power remained in control of the country for over a decade even after they had renounced any pretensions to socialism. So much for the Burmese “transformation in social relations.”

What happened in Burma points to the functional role of the nationalizations in protecting domestic industry from foreign competition and in facilitating the accumulation of private wealth through the symbiotic interlocking of state offices and unofficial economies. Nationalized industries performed the same function after the collapse of the Soviet workers’ state — but before the major means of production were privatized — where shady bargains struck through patronage networks were the order of the day. So widespread was this phenomenon that some scholars have taken to calling the process “nomenklatura privatization.” To this day, a similar process is still underway in Belarus, where major portions of the economy remain nationalized under the notoriously corrupt bourgeois state headed by Alexander Lukashenko, estimated in one Wikileak to have amassed a fortune upwards of nine billion dollars. As noted about the way Lukashenko presides over “rent-seeking” (as economists often call such looting) relating to energy resources, “Belarusian observers agree in seeing Lukashenka as playing a central role in this division of rent-seeking areas, as in Belarus ‘it is possible to make good money only on the basis of one’s closeness to the president’” (Living the High Life in Minsk: Russian Energy Rents, Domestic Populism and Belarus’ Impending Crisis, 111). Oddly enough, in keeping with the Grant tendencies’ equation of mass nationalizations with the creation of a workers’ state, there is at least one person in the world, to my knowledge, who despite not being affiliated with those tendencies nevertheless claims that Belarus is a deformed workers’ state by virtue of the survival of much of Soviet-era nationalization there.

Similar use of offices to accumulate private fortunes has also taken place throughout countries in the developing world that Grant would leave off of his list of “proletarian bonapartist” states. The most closely examined case would be that of Nigeria, to which Richard Joseph has devoted an entire book and about which Festus Iyayi has crafted an enlightening article regarding the applicability of the concept of primitive accumulation to this form of politics. The concept has enjoyed such usefulness that a term has been coined to describe it: prebendalism. Derived from the “prebends” (state offices) that in Medieval Europe were given as a reward for service to a lord or king, the concept has been defined by the man who coined it (Richard Joseph) as a political system, “not only one in which the offices of state are allocated and then exploited as benefices by the office-holders, but also as one where such a practice is legitimated by a set of political norms according to which the appropriation of such offices is not just an act of individual greed and ambition but concurrently the satisfaction of the short-term objectives of a subset of the general population.” In other words, prebendalism is more than just corruption; it is the systematization of political power on the basis of said corruption, the end goal of which is accumulation of private wealth that serves as a form of capital waiting for investment openings as privatization ensues. The ubiquitousness of this practice in Africa is captured nicely by a quote from historical sociologist Jean-François Bayart’s essay “Civil Society in Africa”:

“The state is the dominant economic agent in Africa whether the regime is single-party, pluralist or socialist. Everywhere the state’s integration into the world economy has proceeded apace. Everywhere there has been primitive accumulation, that is, over- exploitation of the peasantry. State accumulation is intimately connected with individual accumulation at all levels (including the highest) and in all countries (including the most ‘socialist’). Power in whatever form is inevitably an instrument for the accumulation of wealth. . . . It is, therefore, otiose to seek to establish a conceptual difference between the private and the public sector. Both are the instruments of a dominant class striving to establish its hegemony.”

Prebendalism can be thought to include not just the corrupt use of political office for personal enrichment of the office holder, but also the corrupt use of political office for the enrichment of participants in the private sector (including informal economies). There, too, the nationalized industries in the developing states of the 1950s-1970s can best be thought of as the primary accumulation of capital–whether for use by the office holders themselves, hoping as they might to transform themselves into a nascent bourgesoie, or by an existing bourgeoisie, including a potentially “informal” bourgeoisie operating through black markets.

Interestingly, Soviet ideologists also understood how this corruption functioned in tandem with nationalization in countries on the misnamed “non-capitalist road.” As one author explained it, “The years of independence have been marked by the emergence of a new privileged section, the so-called bureaucratic administrative bourgeoisie, which has been growing in virtually all the emergent countries, and in some of these is the chief, if not the only, social representative of the bourgeois or pro-bourgeois forces.” The bureaucratic bourgeoisie, the author noted, “is a term usually applied to definite elements of the civil service who make use of their official position to enrich themselves, to engage in all manner of dishonest machinations and pursue a political line hostile to the national interest” (Brutents, National Liberation Revolutions Today, Vol. 1, 233).

Rejecting this assessment, Ted Grant was even more giddy in his estimation of the developing world than the Soviet bureaucracy. But there were other self-styled “Trotskyists” who erred in the opposing direction, rejecting the possibility of deformed workers’ states altogether. These groups have been briefly touched upon, and they will be the subject of part three.