One of the most important contributions made by Trotsky to the theoretical storehouse of Marxism was his analysis of the rise and development of Stalinism. He explained that the fundamental social gains of the October revolution remained intact, in the form of the state-ownership of the economy and the plan of production, but that the working class had been politically expropriated by a new ruling caste. Against those who saw this bureaucracy as a new ruling class, Trotsky argued that it was a parasitic growth resting on the economic base of a workers' state, and not a class.
But Trotsky also believed that the Second World War would decide the fate of the bureaucracy one way or the other. The end of hostilities, he suggested, would result in one of two possibilities: firstly, the overthrow of the gains of October, by a military defeat by nazi Germany or another imperialism, or secondly, an internal political revolution to establish workers' democracy. In either case, it would seal the fate of Stalinism.
Yet even the greatest political genius could not predict the exact outcome of the war, given the enormous multiplicity of factors that would come to bear. In 1943, the Workers International League, forerunner of the Revolutionary Communist Party, still reflected the pre-war thinking of Trotsky, arguing that Stalinism would not be likely to survive the war: 'The fate of the Soviet Union rests directly on the fate of the new wave of revolutions. Further defeats and a new epoch of reaction would inevitably usher in the bourgeois counter-revolution in Russia.' (Workers International News, September 1943).
But by 1945, it was becoming clear that rather than being weakened, the Soviet Union and Stalinism would emerge from the war stronger than before. Of all the Trotskyist organisations, it was only the British RCP which was able to come to terms and explain the new developments and the new balance of forces.
The Fourth International leadership, rather than use the method of Trotsky, hung on to the letter of his predictions. Reflecting this, for example, a document of the American Socialist Workers Party, of September 1944, stated that 'far from having increased its independent strength, under Stalin the Soviet Union has been debilitated and today is weaker than ever in relation to the capitalist world.'
Not to be outdone by concrete facts, such 'theoreticians' even went to the point of denying the world war had ended. Thus, SWP leader, James Cannon, speaking in November 1945: '…Trotsky predicted that the fate of the Soviet Union would be decided in the war. That remains our firm conviction. Only we disagree with some people who carelessly think that the war is over…'
This failure to face up to the new reality was characteristic of all the so-called theoreticians of Trotskyism: Ernest Mandel, Michael Pablo, Pierre Frank, James Cannon, Gerry Healy (then in a minority in the RCP) and others. Moreover, as Lenin often remarked, a mistake, if repeated and not corrected in time, becomes a tendency. The fundamental theoretical incapacities of the leadership of the Fourth International were to become a factor in the collapse of the RCP in Britain and the main cause of the degeneration of their international organisation to become a myriad of unimportant middle-class sects.
The RCP position, in contrast, was clear: '…by far the greatest event of world significance is the emergence of Russia, for the first time in history, as the greatest military power in Europe and Asia.' (see The Changed Relationship of Forces in the previous chapter).
A more complicated theoretical problem arose, however, over those countries occupied by the Red Army after 1945. The RCP at first put a tentative position, raising the possibility that Moscow could change the social relations in these states, albeit on a bureaucratic basis. Within three years, this tentative position was made firm and rounded out by the unfolding events. While the International Secretariat of the Fourth International once again clung to out-dated formulations - that Russia was a degenerated workers' state, but all those states occupied by the Red Army were still capitalist states - it was Ted Grant, as the leading theoretician of the RCP, who worked out a correct position.
The Marxist analysis of the Eastern European states was not arrived at lightly. Ted Grant has described how it was necessary to go back to basics, to the works of Marx, Engels, Lenin and Trotsky and for a whole period of months to read and re-read the relevant works, as a guide. The living experience of Eastern Europe was carefully examined in the light cast by the classics of Marxism and eventually, as Ted himself put it, 'we came to the conclusion that what we had here was a form of proletarian Bonapartism.'
The first article reproduced in this section, from the Socialist Appeal of June 1948, describes and explains the 'February events' in Czechoslovakia, the so-called 'Prague coup'. Here, the Stalinist-dominated government, leaning on the working class through 'action committees', overcame the resistance of the capitalist class and carried through the nationalisation of industry and the major part of the economy. The end result, as the article explained, provided 'the economic basis for a workers' state', but without the democratic control of the state by the workers, 'all the rights which the workers still possess will be strangled and an uncontrolled bureaucracy will ride roughshod over the masses, as in Russia.'
A more general and thoroughly developed treatment of Eastern Europe is contained in the second and major part of this chapter. In June 1948, Tony Cliff, an RCP member, published a lengthy document entitled The Nature of Stalinist Russia. This work has been extended over the years, and the arguments partly modified, but its essence has always been the idea that Russia, under Stalin, became 'state capitalist'. It followed from this that the other states of the Eastern bloc were also 'state capitalist'.
The reply by Ted Grant was published in two parts. The first, Against the Theory of State Capitalism: In Answer to Cliff, deals more particularly with economic arguments, thoroughly demolishing Cliff's confused and contradictory theories. It draws upon a wealth of material from the great teachers of Marxism and condenses from this a worked-out description of the character of the 'transitional' state between capitalism and socialism, when the working class holds the levers of political and economic power, but many of the vestiges of class society remain. The document explains how many of the 'capitalist' features of Russia, gleefully enumerated by Cliff, would exist in any workers' state, whether it was a 'healthy' state based on workers' democracy or a degenerated workers' state, as in Russia.
The second part, entitled The Marxist Theory of the State, As Applied to the Stalinist States, describes in more general terms the means by which the Moscow bureaucracy was able to extend its social and political system to the rest of Easte rn Europe. It again throws an important light on the difficult theoretical questions of Bonapartism and the role of the state. While the alleged 'leadership' of the Fourth International found themselves in an increasingly untenable and unreal position, the analysis elaborated by Ted Grant has stood unchallenged for over forty years.
Taken as a whole, the reply is itself a modern 'classic', a major contribution to the theoretical arsenal of Marxism. It is to this day the most definitive defence, and a deepening, of the original arguments of Leon Trotsky, that Russia is a degenerated workers' state, and in that light, deserves not only to be read, but carefully and diligently studied.
The final piece in this chapter is a document giving a wide-ranging view of the nature of Stalinism after the war. The copy used for this collection was a poorly duplicated pamphlet, dated 1951, but it is clear from the text that it was written earlier, some time in 1949. This is confirmed by other sources which quote large extracts from the same document and cite it as an internal discussion document of the RCP, of 1949. It seems likely, therefore, that the original document, written at the time the RCP was disintegrating, lay for two years before it was published privately by the author.
This pamphlet, Stalinism in the Post-War World, once again describes the strengthening of Stalinism in Europe as a result of the war. Despite the temporary political stabilisation in Western Europe, it was not possible at that time to anticipate a prolonged economic upswing and for that reason, it was believed that the incipient social discontent in Spain, for example, would lead to a new outbreak of revolutionary struggle. It is only with the benefit of hindsight that it can be seen that the post-war boom unexpectedly underpinned the Franco regime for a whole period, although it was decidedly shaky in the first years after the war.
With the perspective for political upheaval in Western Europe, and given the mass support of the Communist Parties at that time, the document put forward the prognosis of growth in these parties, followed by left splits at a later stage. As it has turned out, the long post-war boom has led to such a degeneration of the Western European Communist Parties, in a liberal-reformist direction, that many of them have split into several different parts. A number of them are now unlikely to develop at all, especially alongside tendencies of genuine Marxism.
Another theme once again developed in this document is the method by which the Russian bureaucracy was able to transform social relations in Eastern Europe, establishing regimes of proletarian Bonapartism in the image of Moscow. But in a new departure, a significant part of it also provides a bridge to the issues dealt with in more detail in the next chapter: the Stalin-Tito split and the Chinese revolution.
In June 1948, the rivalry between the Moscow bureaucracy and the Yugoslavian state bureaucracy erupted into open conflict. The Yugoslav leader, Tito, was denounced by the Cominform and he in turn denounced the Kremlin. Yet again, the 'leadership' of the Fourth International were at sixes and sevens. Up to this point, they still held the view that Russia was a deformed workers' state, but Eastern Europe - Yugoslavia included - was still capitalist. Now, without any explanation, they ditched the view that Yugoslavia was capitalist and suddenly discovered instead that not only was it a workers' state, but a relatively healthy one at that! Because of his split with Stalin, the IS took the completely impressionistic view that Tito was some kind of 'unconscious Trotskyist' and gave their wholehearted support to Belgrade in its struggle with Moscow. 'Long live the Yugoslav Socialist Revolution', crowed the IS, as they appealed for fraternal links between the Fourth International and the Yugoslav 'communist movement.'
Once again it was left to Ted Grant, alone among all the international theoreticians of Trotskyism, to explain these events. Using the analysis of Eastern Europe already worked out, it was now possible to describe in consistent Marxian terms, the nature and the origin of the split between Stalin and Tito. The document correctly described Tito as a 'Yugoslav Stalin' who was not prepared to be subjugated by Moscow, and, having a relatively independent base in the partisan movement which had brought him to power, was able to free himself from the political control of the Russian bureaucracy.
Furthermore, not only was Grant's analysis of the Eastern European states able to explain the Tito-Stalin split, it could also anticipate - and this is the test of the correctness of theory, in politics as in science - other splits, along national lines, within the Eastern European monolith. 'To this day the national question remains a key question in the struggle against the bureaucracy…Stalin's tendency to convert Eastern Europe into a fief for the benefit of the Russian bureaucracy…was bound to awaken opposition among the masses, which had to arouse an echo even in the dominant Stalinist parties.'
More prophetically still, the document not only anticipated in advance the establishment of a Stalinist state in China after the revolution, but it predicted the inevitability of a split between the Chinese and the Russian bureaucracy, on the same basis, although on a far larger scale, as in the case of Yugoslavia. This issue is considered more fully in the next chapter.
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 The only available copy of the document is in a poor physical condition and is incomplete in one or two places. At these points a few words, indicated by squared brackets, have been added to maintain continuity.
 War and the International, A History of the Trotskyist Movement in Britain 1937-49 (Sam Bornstein and Al Richardson) gives quotes from a document called The World Situation and the Crisis of Stalinism, which correspond exactly to passages in Stalinism in the Post War World. The former is dated by the authors as 1949, but a copy of it has not been traceable.