One of the arguments of anarchists and 'left communists' against the Bolsheviks is that Lenin restored state capitalism. This they argue is evidence that the Bolsheviks had betrayed the revolution.
Well, if we go to the writings quoted in the Libcom article it doesn't take long to find out that this 'intention' did not mean that Lenin had abandoned the revolution and restored capitalism. On the contrary, such was the dire state of the revolution because of the war and the invasion of numerous capitalist armies, the workers state was forced to reintroduce the 'concession' of the profit motive as an incentive for peasant production to prevent the starvation of workers and provide taxes for industrialisation.
Let's quote from the article On Cooperation to make it clear that 'state capitalism' for Lenin had a precise historical meaning in the Russian context. It was a practical tactic on the part of the workers state - a 'concession' to the peasantry to allow the revolution to survive and develop more pre-conditions for the transition to socialism.
Quoting Lenin:
"Whenever I wrote about the New Economic Policy [NEP] I always quoted the article on state capitalism which I wrote in 1918 ["Left-Wing” Childishness and the Petty-Bourgeois Mentality; part III]. This has more than once aroused doubts in the minds of certain young comrades but their doubts were mainly on abstract political points.
It seemed to them that the term “state capitalism” could not be applied to a system under which the means of production were owned by the working-class, a working-class that held political power. They did not notice, however, that I use the term “state capitalism", firstly, to connect historically our present position with the position adopted in my controversy with the so-called Left Communists; also, I argued at the time that state capitalism would be superior to our existing economy. It was important for me to show the continuity between ordinary state capitalism and the unusual, even very unusual, state capitalism to which I referred in introducing the reader to the New Economic Policy. Secondly, the practical purpose was always important to me. And the practical purpose of our New Economic Policy was to lease out concessions. In the prevailing circumstances, concessions in our country would unquestionably have been a pure type of state capitalism. That is how I argued about state capitalism.
But there is another aspect of the matter for which we may need state capitalism, or at least a comparison with it. It is a question of cooperatives.
In the capitalist state, cooperatives are no doubt collective capitalist institutions. Nor is there any doubt that under our present economic conditions, when we combine private capitalist enterprises—but in no other way than nationalized land and in no other way than under the control of the working-class state—with enterprises of the consistently socialist type (the means of production, the land on which the enterprises are situated, and the enterprises as a whole belonging to the state), the question arises about a third type of enterprise, the cooperatives, which were not formally regarded as an independent type differing fundamentally from the others. Under private capitalism, cooperative enterprises differ from capitalist enterprises as collective enterprises differ from private enterprises. Under state capitalism, cooperative enterprises differ from state capitalist enterprises, firstly, because they are private enterprises, and, secondly, because they are collective enterprises. Under our present system, cooperative enterprises differ from private capitalist enterprises because they are collective enterprises, but do not differ from socialist enterprises if the land on which they are situated and means of production belong to the state, i.e., the working-class.
This circumstance is not considered sufficiently when cooperatives are discussed. It is forgotten that owing to the special features of our political system, our cooperatives acquire an altogether exceptional significance. If we exclude concessions, which, incidentally, have not developed on any considerable scale, cooperation under our conditions nearly always coincides fully with socialism.
Let me explain what I mean. Why were the plans of the old cooperators, from Robert Owen onwards, fantastic? Because they dreamed of peacefully remodeling contemporary society into socialism without taking account of such fundamental questions as the class struggle, the capture of political power by the working-class, the overthrow of the rule of the exploiting class. That is why we are right in regarding as entirely fantastic this “cooperative” socialism, and as romantic, and even banal, the dream of transforming class enemies into class collaborators and class war into class peace (so-called class truce) by merely organizing the population in cooperative societies.
Undoubtedly we were right from the point of view of the fundamental task of the present day, for socialism cannot be established without a class struggle for the political power and a state.
But see how things have changed now that the political power is in the hands of the working-class, now that the political power of the exploiters is overthrown and all the means of production (except those which the workers' state voluntarily abandons on specified terms and for a certain time to the exploiters in the form of concessions) are owned by the working-class.
Now we are entitled to say that for us the mere growth of cooperation (with the “slight” exception mentioned above) is identical with the growth of socialism, and at the same time we have to admit that there has been a radical modification in our whole outlook on socialism. The radical modification is this; formerly we placed, and had to place, the main emphasis on the political struggle, on revolution, on winning political power, etc. Now the emphasis is changing and shifting to peaceful, organizational, “cultural” work. I should say that emphasis is shifting to educational work, were it not for our international relations, were it not for the fact that we have to fight for our position on a worldscale. If we leave that aside, however, and confine ourselves to internal economic relations, the emphasis in our work is certainly shifting to education.
Two main tasks confront us, which constitute the epoch—to reorganize our machinery of state, which is utterly useless, in which we took over in its entirety from the preceding epoch; during the past five years of struggle we did not, and could not, drastically reorganize it. Our second task is educational work among the peasants. And the economic object of this educational work among the peasants is to organize the latter in cooperative societies. If the whole of the peasantry had been organized in cooperatives, we would by now have been standing with both feet on the soil of socialism. But the organization of the entire peasantry in cooperative societies presupposes a standard of culture, and the peasants (precisely among the peasants as the overwhelming mass) that cannot, in fact, be achieved without a cultural revolution.
Our opponents told us repeatedly that we were rash in undertaking to implant socialism in an insufficiently cultured country. But they were misled by our having started from the opposite end to that prescribed by theory (the theory of pedants of all kinds), because in our country the political and social revolution preceded the cultural revolution, that very cultural revolution which nevertheless now confronts us.
This cultural revolution would now suffice to make our country a completely socialist country; but it presents immense difficulties of a purely cultural (for we are illiterate) and material character (for to be cultured we must achieve a certain development of the material means of production, we must have a certain material base)."
January 6, 1923
The meaning is clear. In the context of post-revolutionary Russia, 'state capitalism' means a 'concession' to small producers to work for a profit, under the control of the workers state, to meet the larger need of the state to accumulate the means for the socialist transition. By speaking of a specific form of 'state capitalism' Lenin is providing a concept to explain the concrete historical conditions which requires a distinction between 'state capitalism' in a workers state and 'state capitalism' in a capitalist state.
To drive the point home lets quote Lenin from "Left-wing" Childishness part 4
"To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.
Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation, which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this, and it is not worth while wasting two seconds talking to people who do not understand even this (anarchists and a good half of the Left Socialist-Revolutionaries).
At the same time socialism is inconceivable unless the proletariat is the ruler of the state. This also is ABC. And history (which nobody, except Menshevik blockheads of the first order, ever expected to bring about “complete” socialism smoothly, gently, easily and simply) has taken such a peculiar course that it has given birth in 1918 to two unconnected halves of socialism existing side by side like two future chickens in the single shell of international imperialism. In 1918 Germany and Russia have become the most striking embodiment of the material realisation of the economic, the productive and the socio-economic conditions for socialism, on the one hand, and the political conditions, on the other.
A successful proletarian revolution in Germany would immediately and very easily smash any shell of imperialism (which unfortunately is made of the best steel, and hence cannot be broken by the efforts of any . . . chicken) and would bring about the victory of world socialism for certain, without any difficulty, or with slight difficulty—if, of course, by “difficulty” we mean difficult on a world historical scale, and not in the parochial philistine sense.
While the revolution in Germany is still slow in “coming forth”, our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it. Our task is to hasten this copying even more than Peter hastened the copying of Western culture by barbarian Russia, and we must not hesitate to use barbarous methods in fighting barbarism. If there are anarchists and Left Socialist-Revolutionaries (I recall off-hand the speeches of Karelin and Ghe at the meeting of the Central Executive Committee) who indulge in Narcissus-like reflections and say that it is unbecoming for us revolutionaries to “take lessons” from German imperialism, there is only one thing we can say in reply: the revolution that took these people seriously would perish irrevocably (and deservedly).
At present, petty-bourgeois capitalism prevails in Russia, and it is one and the same road that leads from it to both large-scale state capitalism and to socialism, through one and the same intermediary station called “national accounting and control of production and distribution”. Those who fail to understand this are committing an unpardonable mistake in economics. Either they do not know the facts of life, do not see what actually exists and are unable to look the truth in the face, or they confine themselves to abstractly comparing “capitalism” with “socialism” and fail to study the concrete forms and stages of the transition that is taking place in our country. Let it be said in parenthesis that this is the very theoretical mistake which misled the best people in the Novaya Zhizn and Vperyod camp. The worst and the mediocre of these, owing to their stupidity and spinelessness, tag along behind the bourgeoisie, of whom they stand in awe. The best of them have failed to understand that it was not without reason that the teachers of socialism spoke of a whole period of transition from capitalism to socialism and emphasised the “prolonged birth pangs” of the new society. And this new society is again an abstraction which can come into being only by passing through a series of varied, imperfect concrete attempts to create this or that socialist state.
It is because Russia cannot advance from the economic situation now existing here without traversing the ground which is common to state capitalism and to socialism (national accounting and control) that the attempt to frighten others as well as themselves with “evolution towards state capitalism” (Kommunist No. 1, p. 8, col. 1) is utter theoretical nonsense. This is letting one’s thoughts wander away from the true road of “evolution”, and failing to understand what this road is. In practice, it is equivalent to pulling us back to small proprietary capitalism."
Clearly in Russia, a socialist revolution took place in 1917 and a new workers state came to power. Don't take our word for it take that of Winston Churchill and the imperialist overlords who invaded from every direction with counter-revolutionary armies to smash the new workers' state. With the defeat of the German Revolution and the benefits of its advanced large-scale capitalist production, Soviet Russia was forced to make use of capitalist methods and techniques and make a concession to capitalist incentives to overcome that backwardness. Lenin knew this would be the case before the revolution, and did not change his view after the revolution, or sell-out to capitalism with the NEP. If that was the case why would imperialism continue to conspire for the downfall of so-called 'communism' in the workers state?
The Bolsheviks always said that socialism in one country was not possible, let alone a backward, isolated and war-devastated country. This is why they formed a Communist International and fought for a world revolution. As Lenin said in one of the quotes above, 'Leftwing' communists and anarchists who do not understand this cannot make a revolution. Nor have they since.
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