David Renton has posted a substantial discussion of the ‘IS tradition’ on his blog and discusses the problems faced by the SWP in the 1990s, including how the theory of state capitalism applied in the post-1989 era. I thought I would post this section from a paper I wrote back in 2009 (subsequently published here) on the SWP and the impact of 1989.
Cliff’s famous analysis of the USSR
The Socialist Workers Party (SWP) had originally made a name for itself as the International Socialists (IS) and were a Trotskyist group based around the ideas of Tony Cliff and Michael Kidron, who rejected the orthodox Trotskyist notion that the Soviet Union was a ‘degenerated workers’ state’, instead claiming that the Soviet Union’s adherence to the policy of ‘socialism in one country’ had created ‘state capitalism’. Expelled from the Trotskyist Fourth International, Cliff, Kidron and others such as Duncan Hallas formed the Socialist Review Group (SRG) in the mid-1950s, which like the other Trotskyist tendencies at the time was an entrist group within the Labour Party, before becoming an independent organisation, the International Socialists, in 1965. Initially buoyed by the radicalism generated by the anti-Vietnam War movement and the events of Paris in May 1968, the IS moved away from student radicalism and implemented a ‘Turn to the Class’, which saw a reorganisation of the group in a Leninist structure and an emphasis on the heightened industrial militancy of the early 1970s. Membership steadily increased between 1968 and 1974 as the International Socialists depicted itself as a revolutionary alternative to the reformist alliance of the CPGB and the trade union bureaucracy. Despite several factional battles between 1973 and 1976, the International Socialists still adhered to the notion that it would form the base for a Leninist revolutionary party and in late 1976, the group changed its name to the Socialist Workers Party, although its worker membership was still minimal. Possibly the most prominent organisation to the left of the Communist Party (the only other contender would by Militant, who remained an entrist group inside the Labour Party until the mid-1990s), it was still much smaller than the CPGB, but the SWP maintained that the CPGB’s membership was in steady decline and the number of active members was much lower than the official membership totals. Exact membership figures for the SWP are difficult to locate, but according to John McIlroy’s research, SWP membership seemed to peak in 1978 with 4,200, then dropping slightly to 4,100 in 1980, while other sources state that ‘[o]ver the next few years the party lost small groups but appears to have consolidated at this level’. By the late 1980s/early 1990s, the publications of the SWP, Socialist Worker (a weekly newspaper), Socialist Worker Review (a monthly magazine) and International Socialism (a quarterly journal heavily dedicated to theoretical writings), were widely read and publicly portrayed the SWP as a recognisable, if not influential, force on the British left – an identifiable alternative to the CPGB, who were fading quickly.
What separated the SWP from the rest of the British left was its development of the theory of state capitalism by Tony Cliff in the 1950s and 1960s (and then by thinkers such as Alex Callinicos and Chris Harman in the 1970s and 1980s). Marcel van der Linden has demonstrated in his book Western Marxism and the Soviet Union that the theory of state capitalism was not solely the claim of the IS/SWP, with many different interpretations of what state capitalism was and how it applied to the political and economic structures of the Soviet Union being developed since the Bolshevik Revolution, but many of the theorists discussed by van der Linden belonged to fringe groups or were unaffiliated, while the SWP incorporated this theory as a central piece of the Party’s programme. In his autobiography, Tony Cliff’s explanation of the theory demonstrates how seductive it could be for Marxists who were disaffected with the idea of the Soviet Union as the ideal of socialism:
State capitalism fitted the facts. Since 1929 the Stalinist bureaucracy had, through collectivisation of the farms and forced industrialisation in the cities, massively accumulated capital. It behaved like any other capitalist ruling class by exploiting the workers and competing internationally… It differed from other capitalisms only in that formally all the means of production were owned by a corporate group – the state bureaucracy – rather than private individuals.
For Cliff, this idea tied into more practical socialist activism as it ‘put the concept of the emancipation of the workers as the act of the working class itself back at the centre of Marxism’, which complemented the SWP’s other strategies, such as the rank-and-file movement within the trade unions.
Although Cliff had first developed this theory of state capitalism in regards to the Soviet Union and then the Eastern European satellite states, over time, it had been developed as a theory to explain how capitalism was developing in the post-war era. State capitalism was theoretically seen as a new stage of development in history and a progressive step away from monopoly capitalism. David Lockwood described how this theory developed – as Engels, Lenin and Trotsky all argued (at some point) that state intervention in the economy was a necessary step towards a socialist society, ‘it was only to be expected that their successors [such as Cliff] should identify more state intervention with progress (within capitalism) towards socialism.’ From this assumption, Lockwood showed that it was a logical step to assume that ‘an economy which remained capitalist, but which was characterised by the most extensive forms of state control possible under capitalism (ie. state capitalism) was regarded as the closest capitalist economy to socialism – the highest, latest, most aged and last stage of capitalism.’ Lockwood quoted Cliff as stating in State Capitalism in Russia:
Seeing that state capitalism is the extreme theoretical limit which capitalism can reach, it necessarily is the furthest away from traditional capitalism. It is the negation of capitalism on the basis of capitalism itself.
Cliff argued that by comparing state capitalism with ‘traditional capitalism on the one hand, and with a workers’ state on the other’, it was possible to ‘show that state capitalism is a transition stage to socialism, this side of the socialist revolution’. However during the final days of the Soviet Union, John Molyneux wrote in the Socialist Worker that ‘all theories which identify the USSR as in some sense socialist,… or more progressive than Western capitalism must lead either to equivocation and paralysis or to condemnation of socialism.’ If state capitalism was ‘a transition to socialism’, as Cliff put it, then the collapse of the Soviet system between 1989 and 1991 posed several theoretical problems for the SWP, with three main, but diffuse, effects upon the Socialist Workers Party.
When the Eastern European satellite states began to crumble, it seemed, at first, that the SWP’s position on the Soviet Union was vindicated and Tony Cliff celebrated the revolutions of 1989, stating ‘We are witnessing the most massive earthquake of the social and political order in Eastern Europe. It is on a scale reminiscent of 1848 and 1917.’ Chris Harman wrote in September 1991 that the SWP, based on their theory of state capitalism, had predicted that ‘the USSR was heading for a major political crisis’, adding that:
although we could not foresee the exact timing of the [August 1991] coup or the detailed character of the popular response to it, neither took us by surprise. Nor are we all that shocked by the demise of the CPSU.
The editorial for the Socialist Worker Review in March 1990 declared that the Party ‘cheered as workers tore down tyrant after tyrant in the final months of 1989’ and ‘shed no tear for the collapse of a system which was the complete opposite [of socialism]’. However this left the theorists of the SWP to explain what happened after the Wall fell down and the ruling parties of Eastern Europe disintegrated.
In the theory developed by Tony Cliff, Chris Harman and others within the SWP, the state capitalist system which existed in the Soviet Union and the rest of the Eastern Bloc was, while as exploitative and unjust in its treatment of the workers as Western capitalism, a progressive step towards socialism. But the collapse of the Soviet regimes had not seen the advent of socialism, but the restoration of capitalism, which therefore should have represented a backwards step for Eastern Europe. This point could have wreaked havoc with the teleological aspects of state capitalist theory and possibly undermined one of the key tenets of the SWP’s theoretical platform, but it seemed to go unnoticed by the Party. In the major analytical piece on the collapse of the Soviet Bloc presented in International Socialism in the spring of 1990, Chris Harman claimed that a new stage of capitalism had now developed – ‘multinational capitalism’. Harman explained:
[w]orld capitalism has outgrown the stage of state capitalism. But it would be wrong to label what has replaced it as ‘private capitalism’ or even ‘market capitalism’, as if the role of the state had disappeared. What exists is a combination of state capitalism and multinational capitalism. I call it ‘multinational capitalism’ for short, but its components develop from national state capitalists bases and never completely break from them.
Like other teleological predictions made by Marxists in the past, such as the collapse of the European empires would usher in socialist revolutions across the world or that a World War would leave the capitalist West severely weakened, the collapse of the Soviet Bloc in the late 1980s and early 1990s did not see a workers’ revolution appear from its ashes. But this was not meant to totally dishearten non-Soviet styled socialists in the West or in Eastern Europe, as Harman argued that it was merely a transition from one form of capitalism to another. This was not to be seen as a progressive step, but to say that it was a step backwards would be to admit that there was some progressive element to Soviet styled socialism. To avoid the theoretical dilemma presented by the collapse of the Soviet Bloc and the new capitalism that was developing in Eastern Europe, Harman claimed that ‘the transition from state capitalism to multinational capitalism [was] neither a step forward nor a step backwards, but a step sidewards’.
In the days following the collapse of the August 1991 coup, the Socialist Worker declared that these events brought ‘the workers of the USSR closer to the spirit of 1917’ and now that the ‘barrier of Stalinism’ had been removed, the political and social upheaval presented an opportunity for workers to push for ‘real socialism’. But at the same time, the SWP warned against an unrealistic optimism after 1989 and like many others, stated that the transition to Western capitalism would bring many negative effects. Discussing the first elections in Hungary and East Germany in the post-Soviet era, the Socialist Worker Review noted ‘the extent to which parties with pro-Western, openly anti-socialist ideologies [were] the immediate beneficiaries of the collapse of Stalinist state capitalism’. For the SWP, the events from 1989 to 1991 simply saw the transition from state capitalism to multinational capitalism, which would result in very little change for the people of Eastern Europe. As Alan Gibson wrote, ‘[w]hat has happened is a shift from one form of capitalism to another, not a fundamental change in the class nature of those countries’.
The SWP saw this as particularly evident in the ruling elites that emerged in former Soviet Bloc, arguing that while the ruling parties had collapsed, the ruling class remained fairly intact. Chris Harman compared the collapse of the Soviet Bloc to post-war Germany and Italy (and post-dictatorship Portugal and Spain), claiming that in these countries, like in Eastern Europe, the ruling classes were able to preserve their power and privileges, while formal political institutions broke down. For the SWP, ‘the central power of the ruling class was untouched’, with Harman writing:
[i]n Eastern Europe over the last six months we have seen the cumulative collapse of the old ruling parties. But the enterprise heads, the ministry officials, the generals, even most of the police chiefs, remain in place, untouched by the changes, discussing which of the new parties to back and dominate, trying to ensure that they get new governments to push their new models of capital accumulation.
This ‘business as usual’ approach seemed quite convincing for the SWP because, in some ways, it fit into the theory of state capitalism and the argument that Thatcherism in the West was just the same as nomenklatura that existed in the East. However this view has been challenged. David Lane and Cameron Ross declared in the mid-1990s that ‘the revolution in Russia cannot simply be regarded as the same wine in different bottles – the old nomenklatura has not reproduced itself’. David Lockwood has also argued that in the aftermath of the Soviet Union’s collapse, ‘no renewed Soviet ruling class emerged’, adding:
[t]hose who managed to retain or attain positions of power in Soviet society rapidly discovered that each of their interests were no longer aligned – the Russian politician was ranged against the kleptocrat, who sneered at and obstructed the entrepreneur, who fought with the bureaucrat, who made a deal with the mafia. The market had divided them; and they would never be reunited.
All this may be so, but with the collapse of the Eastern Bloc, the SWP’s theory of state capitalism, despite the Party’s insistence that it was the key to understanding the demise of the Soviet Union and the way forward, became largely a historical (and possibly irrelevant) debate. While declaring that the theory of state capitalism was ‘the only theoretical foundation from which socialism [could] now be confidently advanced’, John Molyneux also joked that ‘[f]or many years the theory of state capitalism could seem like an obscure and abstract exercise in name calling.’ The SWP had long relied on their theory of state capitalism to help differentiate themselves from other Trotskyist groups, but now the end of the Soviet regimes in Eastern Europe lessened this difference and the ‘brand name’ of the Socialist Workers Party as the ‘state capitalists’ amongst the British left and Trotskyist circles.
In the end, these theoretical dilemmas were overlooked in the SWP and apart from an initial flurry of articles, as well as Harman’s extensive tract in mid-1990, the Party didn’t have much introspection on the collapse of the Soviet Bloc. With the winding up of the CPGB in 1991, the SWP’s largest rival on the left had disappeared and the Party were able to mobilise people around issues such as the Gulf War, the 1992 elections and the rise of the British National Party. While the SWP was able to make some headway in the absence of the CPGB and the Party’s presence was highlighted by its work within campaigns such as the Anti-Nazi League, there were other areas where the SWP had failed to make an impact and several important political developments within British politics, particularly involving the labour movement, that the SWP ‘missed the boat’ on. As Murray Smith wrote in 2002, ‘big political battles also took place in the Labour Party, from which they were absent. The struggle for Liverpool City Council took place. [And] The SWP got the whole question of the poll tax disastrously wrong in Scotland’. The absence of the SWP from these ‘political battles’ allowed another Trotskyist group to take the initiative and promote itself as a viable left-wing alternative – Militant, a long-standing entrist group within the Labour Party, which finally emerged in the mid-1990s as the independently organised Socialist Party (of England and Wales).
Tony Cliff in the 1980s
 For the ‘official’ history of the IS/SWP until the 1980s, see: Ian Birchall, The Smallest Mass Party in the World: Building the Socialist Workers Party, 1951-1979, SWP pamphlet, London, 1981. Critical histories of the Party, by former IS members, can be found in Jim Higgins, More Years for the Locust, London, 1997 and Martin Shaw, ‘The Making of a Party?: The International Socialists 1965-1976’, Socialist Register, 1978, pp. 100-145, whose interpretation was rebutted in Ian Birchall, ‘The Premature Burial: A Reply to Martin Shaw’, Socialist Register, 1979, pp. 26-50. More critical outlines of the Party’s history and policies are in John Callaghan, British Trotskyism: Theory and Practice, Basil Blackwell, Oxford, 1984, pp. 90-121 and John Callaghan, The Far Left in British Politics, Basil Blackwell, Oxford, 1987, pp. 84-112
 Leon Trotsky, Death Agony of Capitalism, p. 36; Tony Cliff, State Capitalism in Russia, Bookmarks, London, 1988, p. 166
 Ian Birchall, ‘History of the International Socialists, Part 2: Towards a Revolutionary Party’, International Socialism, 1/77, April 1975, p. 26
 Steve Jeffreys, ‘Out at 60?: The Communist Party (CPGB) in 1979’, Socialist Review, 13, July, August 1979, p. 37
 John McIlroy, ‘“Always Outnumbered, Always Outgunned”: The Trotskyists and the Trade Unions’, in John McIlroy, Nina Fishman & Alan Campbell (eds), British Trade Unions and Industrial Politics vol II: The High Tide of Trade Unionism, 1964-79, Ashgate, Aldershot, 1999, p. 285; Peter Baberis, John McHugh & Mike Tyldesley (eds), Encyclopaedia of British and Irish Political Organisations, Continuum International Publishing Group, 2005, p. 167.
 Socialist Review was titled Socialist Worker Review between 1984 and 1991.
 Marcel van der Linden, Western Marxism and the Soviet Union, Haymarket Books, Chicago, 2009.
 Tony Cliff, A World to Win: Life of a Revolutionary, Bookmarks, London, 2000, p. 42
 T. Cliff, A World to Win, p. 44
 David Lockwood, ‘The Effect of the Global Economy on the Transition from a Command to a Market Economy in the Former Soviet Union’, unpublished PhD thesis, University of Melbourne, 1996, p. 97
 D. Lockwood, ‘The Effect of the Global Economy…’, p. 97
 T. Cliff, State Capitalism in Russia, p. 170, cited in, D. Lockwood, ‘The Effect of the Global Economy…’, p. 97
 T. Cliff, State Capitalism in Russia, p. 170.
 John Molyneux, ‘Sticking to Principles’, Socialist Worker, 31 August, 1991, p. 9.
 Tony Cliff, ‘Earthquake in the East’, Socialist Worker Review, December 1989, p. 11.
 Chris Harman, ‘On the Precipice’, Socialist Review, September 1991, p. 5.
 ‘The Future of Socialism’, Socialist Worker Review, March 1990, p. 3.
 Chris Harman, ‘The Storm Breaks’, International Socialism, 2/46, Spring 1990, p. 46.
 C. Harman, ‘The Storm Breaks’, p. 46.
 C. Harman, ‘The Storm Breaks’, p. 82.
 ‘Now Fight for Real Socialism’, Socialist Worker, 31 August, 1991, p. 3.
 ‘New Faces Old Problems, Socialist Worker Review, April 1990, p. 5.
 Alan Gibson, ‘The End of Stalinism’, Socialist Worker, 20 April, 1991, p. 10.
 C. Harman, ‘On the Precipice’, pp. 5-6.
 C. Harman, ‘The Storm Breaks’, p. 66.
 C. Harman, ‘The Storm Breaks’, p. 67.
 David Lane & Cameron Ross, ‘The Changing Composition and Structure of the Political Elites’, in David Lane (ed.), Russia in Transition, Longman Books, London, 1995, p. 75.
 David Lockwood, The Destruction of the Soviet Union: A Study in Globalization, Macmillan, Houndmills, 2000, p. 143.
 J. Molyneux, ‘Sticking to Principles’, p. 9.
 Murray Smith, ‘Where is the SWP Going?’, International Socialism, 2/97, Winter 2002, p. 43.
 Not to be confused with the Socialist Party of Great Britain, a non-Leninist party that was established in 1904 and had originally been affiliated with the Second International, refusing to join the Bolshevik inspired Communist Party of Great Britain in 1920.