Marx used the terms socialism and communism interchangeably and would not have recognised state capitalism as a 'socialist' stage, as claimed by Lenin.
The Russian Empire - by which term we include the seven members of the Council for Mutual Economic Assurance (Comecon) - was a group of countries which exhibited all the features of capitalism.
As scientific socialists, we shall explain what we see as the two main defining characteristics of capitalism and will then proceed to demonstrate that these exist within the Russian Empire.
Firstly, capitalism is a system in which wealth takes the form of commodities. i.e. objects produced for sale on the market. Commodity production is not unique to capitalism, but the commodity nature of labour power is.
So, capitalism is defined by the fact that the mental and physical energies of most people have to be sold on the market for a price called a wage or a salary. Where there is wage labour there is capitalism.
Secondly, capitalism is defined by the law of value. Value is a social relationship which exists in property society where commodities are exchanged. Where there are no commodities, because production and distribution have advanced beyond the stage of buying and selling relationships, there will be no need for the concept of value or for prices and money. As Marx pointed out, "Value is the expression of the specific characteristic nature of the capitalist process of production" (quoted in T. Cliff, Russia A Marxist Analysis, p.148).
Most early socialists, including Marx and Engels, accepted the logical supposition that the abolition of capitalism would necessitate the ending of commodity production, wage labour and the law of value, including prices and profits. In short, they were under no illusion that socialism - which is to be the antithesis of capitalism - could exhibit the social features of the capitalist system.
For example, Engels pointed out that "With the seizing of the means of production by society, production of commodities is done away with. .," (Socialism: Utopian and Scientific). Marx, replying to a German writer called Wagner who thought that the law of value would exist in socialism, rejected explicitly "the presupposition that the theory of value, developed for the explanation of capitalist society, has validity for socialism".
It is often imagined that the Bolshevik revolution of November 1917 (October according to the old Russian calendar in force at the time) was the most significant event in Russia that year. In fact, this is far from the case.
In March (February) 1917, a far more significant revolution took place. This was not led by any party or faction but resulted from the spontaneous indignation of Russian workers and peasants who were suffering huge losses in the imperialist war, were starving in the towns and deprived of land in the vast peasant areas.
The workers of Petrograd and Moscow set up soviets (councils) without any help from the Bolsheviks who later claimed credit for these bodies - in fact, Lenin was living in exile in Switzerland when the revolution broke out and did not return to Russia until April.
The workers and peasants of 1917 were not interested in ideas about socialism - their demands were for peace, land and bread. When Lenin turned up in April 1917 he told the Bolshevik party that they should turn the revolution into a socialist revolution - in a country which had only developed capitalism in a few cities and in which three million industrial workers were overshadowed by over a hundred million peasants.
Listening to Lenin's impractical scheme, Bogdanov - a fellow Bolshevik - described such ideas as "the delirium of a madman". Bogdanov had a point. The Bolsheviks won power mainly by offering everything to everyone, even though many of the promises conflicted.
Using the anger of the workers and peasants against the provisional government which was set up in March and insisted in pursuing the unpopular war, the Bolsheviks seized power. Having obtained power, the Bolsheviks were forced to act like puppets, dancing to the tune of the existing historical conditions. In short, they were forced to develop capitalism.
But, being a party which was led by a number of dogmatic intellectuals, the Bolsheviks maintained the myth that they were creating genuine socialism. For example, in 1919 Bukharin and Preobrazhensky wrote that
Communist society will know nothing of money . . . Thus, from the very outset of the socialist revolution money begins to lose its significance . . . By degrees, a moneyless system of accounting will come to prevail. (The ABC of Communism).
In 1920 Zinoviev declared boldly: "We are moving towards the complete abolition of money" (quoted in E.H. Carr, The Bolshevik Revolution, Volume 2, Penguin, p.263). This was pure utopian fantasy.
Lenin and his fellow Bolshevik leaders in Petrograd, who tended to be less taken in by their own rhetoric than were their Moscow comrades, did not take long to realise that their job was to develop state capitalism. Leninists often gasp with horror when it is suggested that Lenin ever had such intentions - they should read the man himself:
. . . state capitalism would be a step forward . . . if in approximately six months' time state capitalism became established in our Republic, this would be a great success . . . ('Left-Wing' Childishness and the Petty- Bourgeois Spirit, May 1918).
By March 1919 the Bolshevik party congress resolved that "in the period of transition from capitalism to communism the abolition of money is an impossibility". The so-called period of transition, which the Bolsheviks called socialism, was a period of state capitalism - a point which Lenin had explicitly made even before the Bolsheviks seized power:
Socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people . . . (The Impending Catastrophe and How to Combat it, September 1917).
So, when the Russian Empire described itself as socialist it did so in the logically perverse Leninist sense of meaning that it is state capitalist.
In the early days of state capitalism, the Bolsheviks claimed that the basic features of their society were different from those which define capitalism in the Marxist definition. By the time of Stalin this had all changed, and in his Economic Problems of Socialism in the USSR, written in 1952, Stalin admitted that commodity production and the law of value existed in Russia:
. . . our commodity production radically differs from commodity production under capitalism . . . It is sometimes asked whether the law of value exists and operates in our country, under the socialist system. Yes, it does exist and does operate.
So, Stalin admitted that he was presiding over a system of buying and selling, wage labour, value and price- all of the features which Marx attributed to capitalism - but kept up the illusion that this was socialism.
So far from the Trotskyist delusion then, of Russia has become a failed workers state with the advent of Stalin.
It was intentionally a state capitalist entity, from the moment Lenin seized power and Marx and Engels would have had no hesitation and described it thus.