Socialism or anarchism? The historical development of the productive forces provides the answer

Tracing the historical development of the productive forces shows that the next logical step in realising a higher stage of production is long-term central planning of a public monopoly

Perhaps the most common Marxist argument against anarchism is that a powerful centralised state is required to fight off violent counter-revolution, including from external invasions. When the Bolsheviks took power in Russia, for example, armed forces from 13 capitalist nations invaded the country. Only the organised, centralised power of the Red Army could withstand such an onslaught.

Violent counter-revolutionaries have to be repressed, meaning prisons have to be utilised. There can be no allowance for any kind of power vacuum, especially since eschewing the state leaves it open to fascist capture.

Anarchists and communists agree that the capitalist state must be dismantled. But whereas anarchists fear that any state is bound to reproduce hierarchies of oppression, Marxists understand that cementing the abolition of the capitalist state requires its replacement by a socialist state.

In practice, this means seizing the state and transforming it — the phrase Marx uses in the Critique of the Gotha Programme — through nationalisations and democratisation. This can take the form of establishing ‘soviets’, a national network of workers’ councils/communes that builds up a de facto state within a state, a situation of ‘dual power’ with the capitalist state. Once this new state has become strong enough and been won to a revolutionary position by communists, it effectively declares independence by no longer recognising the legitimacy of the capitalist state. (This may include seizing the central institution of bourgoeis democracy and transforming it into the central institution of soviet democracy.)

A socialist state means that, whereas the capitalist state subordinates the public realm to the will of the capitalist class, society itself becomes the state. The people are the ruling class. The national soviet is obviously very influential and has areas of expertise, such as national security; but it is largely subordinated to the will of the regional soviets, which are in turn subordinated to the will of local or municipal soviets.

Clearly those delegates elected to the national soviet will be very influential, but to take their place there they will still have to win enough support from the regional and local soviets, which will hold the right to recall and replace them and hold them to account. This is a much more democratic system than we experience under capitalism, where we elect representatives, mainly from the capitalist class, every few years and then have little to no say in what they do during that time.

Nor does socialism necessarily entail a ‘one-party system’. However, just as most people see no point in joining one of the parties outside of the main two in, for example, Britain and the US, most people in socialist countries see little point in joining parties other than the communist party, since it represents the vast majority, the working class (which under socialism increasingly forms the only class, as class itself begins to wither away). Nor does the communist party stand for election. Rather, its members, who have voted for policy stances within the party, stand for election. But the party can have different factions on different issues.

Marxists do not claim that establishing a socialist state is ideal — of course we would prefer to go straight into ‘full communism’ if it were possible. But it simply is not.

The road to ‘full communism’

Achieving ‘full’ communism, or its higher stage, whereby the state and nation-states have withered away, depends on building up the productive forces to the point of abolishing the law of (exchange) value (in practice, making everything more or less free to produce) and achieving relative abundant (extremely plentiful) material wealth for all, since abundance for all is how the very concept of class becomes obsolete. A classless society cannot be based on the forced limitation of consumption, for this would obviously entail class conflict. It is why communistic pre-capitalist societies did not remain so, along with the fact that the inability to plan and trade on national and international scales ensured uneven development.

The higher stage of communism therefore requires the completion of the historical trend towards fully automated production. This is because capital’s exploitation of commodity-producing human labour is the sole source of exchange-value, since the true measure of exchange-value is labour time. Under capitalism, exchange-value is only realised through the production and sales of commodities. (Whereas socialism produces ‘exhange-value’ through break-even utility-production, meaning whether production happens or not no longer depends on whether it is profitable.)

This is empirically observable since the historical rate of profit is trending towards a permanent zero, tending ever closer the more labour becomes automated (even Latin America and sub-Saharan Africa have now deindustrialied their workforces, i.e. shifted them from manufacturing to services). The quicker it takes to make commodities the cheaper they generally are to make and buy.

But abolishing exchange-value is something that can only be achieved internationally. And an international project is made up of nations by definition. The socialist road then is the road to a borderless world, not the fantasy anarchist one which would in practice introduce new borders through fully autonomous zones, which are incapable of building up the kind of military strength of a national network of soviets, anyway. (This is not to say that Marxists should never work with or offer critical support to autonomous zones.)

Once socialism, i.e. the lower stage of communism, restores production and economic growth — following capitalism’s breakdown — and develops towards a higher stage of communism, then automation, 3D-printing, lab-grown food, hydroponics, and so on, will become more and more localised. Every region of every nation will therefore become increasingly self-sufficient and as prices fall towards zero, the centrality of the state will become more and more obsolete and wither away.

We can see then that, whereas capitalism has a long-term tendency to centralise wealth and power through the monopolisation of industry, socialism has a long-term decentralising tendency.

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But the task of building up the productive forces, especially where they are presently underdeveloped, is bound to take some time to complete. Democratic decisions, even when made by a nation’s population (something that could now be done more regularly thanks to the internet and smartphone apps), still have to be implemented by central organs. Work still needs to be incentivised where it is needed. Distributing resources from an area where there is a surplus to another where there is a shortage requires central planning (which when done between state enterprises makes trade truly free, since no exchange of ownership takes place).

Central planning is the surest way of prioritising the needs of the working class as a whole, rather than a part or section of it, as would be the case with entirely independent (i.e. privately owned) communes and co-operatives etc., which would end up competing with each other and naturally prioritising their own survival. (Indeed, the Gorbachev government’s legalisation of independently trading worker co-operatives did not lead to some form of ‘libertarian communism’ but contributed to the economic collapse of the Soviet Union and the six milion excess deaths that followed.)

Similarly, rent levels have to be set according to differential convenience or amenity of land, otherwise those on better land will effectively appropriate rent from those on worse land. Speaking of which, an intelligent approach to winning over small farmers has to be taken if the socialist government is not to drive them into a powerful counter-revolutionary alliance with large land owners, a mistake that proved extremely costly in Weimar Germany.

Central planning is not about a small committee of ‘elitists’ making all the decisions, but a sensible system of accountability — something much harder to establish with a non-hierarchical ‘collective leadership’ — co-ordinating the needs of society as a whole, based on information received from every factory, farm, and so on, and making sure all sectors complement rather than rival each other.

But it has to be acknowledged that under siege/conditions of relative or increasing scarcity, things are bound to become more centralised and authoritarian, and vice-versa.

The materialist conception of history

Marx’s materialist conception of history — that is, by tracing the historical development of the productive forces — provides an objective analysis.

Capitalism has developed into its highest, final stage: monopoly capitalism. What comes next, logically, is a higher stage of production: socialism, or ‘the lower stage of communism’.

Firstly, then, the historical tendency of capital to monopolise the productive forces[1] logically demands a ‘final merger’ — an absolute monopoly. Since capitalism without competition is no longer capitalism, this necessitates socialism. Once the productive forces have been taken under state ownership, this absolute monopoly has been achieved by definition.[2]

Secondly, that long-term central planning within private corporations[3] has become increasingly necessary — departmental budgets for the outlays on research and development, projections on investment and returns, stock control coding, etc — shows that there is a historical tendency towards long-term central planning of the economy as a whole. This is reinforced by the inevitably failed attempts by the state itself to plan capitalism, both domestically (Keynesianism) and internationally (Bretton Woods).[4]

This is reinforced again by the private sector’s ever-increasing dependence on state subsidies,[5] which includes corporation tax cuts — Donald Trump’s record cut was driven not purely by ideology or greed but by declining profit rates — a trend that must obviously head towards 100% of income, and, therefore, nationalisation. The corporate pharmaceutical industry, for example, has become particularly dependent on subsidies, with a trend of increasing public sector investments in research and development (R&D) while private spending has declined, in many instances to the point of shutting R&D labs altogether.[6] Farming is another prime example. In England in 2016, subsidies made up around 57% of farming’s total profit.[7] In the US, government-sponsored enterprises provide financing for nine out of ten mortgages.[8] The biggest corporations, such as Amazon, already pay next to no corporation tax. In Britain, small and medium enterprises receive more collectively than the police force.[9] The list goes on.

The increasing centralisation within corporations comes with the ever-more capital-intensive renewal of the means of production, the life-span of which shortens over time because of the ever-rising ability to implement better-quality replacements, and so the capital growth required to keep corporations running is increasingly higher and therefore unsustainable. As Ernest Mandel wrote in Late Capitalism:

“This whole process culminates in concentrated pressure on the state to limit oscillations in the economy, at the cost of permanent inflation. It generates the growing trend towards state guarantee of profits, firstly through increasing government contracts, especially in the military sphere, then through underwriting of technologically advanced companies. This trend towards state guarantees of the profits of the large companies, which has spread from the sphere of production and research into that of the export of commodities and capital, is another of the crucial hallmarks of late capitalism.”[10]

The Soviet Union was socialist

But, I hear you cry, planning in the Soviet Union didn’t work, so why would it work now. Firstly, it did work — if it hadn’t, the Soviet Union simply would not have lasted 72 years. There were, however, problems that could now be more easily overcome. For starters, the old level of technology employed in the Soviet Union obviously held progress back. Sometimes this was self-inflicted. As Che Guevara said in his criticisms of the Soviet Union, some communists there were suspicious of ‘ideological contamination’ from western technology. This was just daft — it is the social relations under which they operate that can make technology under capitalism alienating and oppressive. (Indeed, capitalism is the dictatorship of capital and technology under capitalism is a form of capital.)

The international situation posed more critical problems. Sanctions made trade difficult. But where it managed to circumvent sanctions, the Soviet Union had to import goods from various capitalist countries. This meant it could never fully plan its economy, since it could not predict volatile foreign prices. This also meant there was some logic to allowing a black market to flourish to some extent, in order to build up foreign currency. This combined with technological problems and the fear of invasion — which meant spending heavily on defence at the expense of the civilian economy — held back the Soviet Union’s ability to transition to the higher stage of communism, resulting in relative economic stagnation and a growing pressure in the direction of capitalist reform, especially from skilled workers and intellectuals who knew they would earn more under capitalism. This latter problem understandably convinces many people that socialism cannot work (since socialism is bound to increase the number of skilled workers and intellectuals) because of human nature/greed, but as capitalism is now abolishing itself for good through the inevitable rise of automation, this problem will soon no longer exist.

Modern technology

The digital revolution also makes Marx’s proposed labour voucher system much more viable. The ‘currency’ would be pegged to labour time, so that for one hour of labour, a worker would receive 1.0 labour credit to spend on consumer goods that collectively took one hour to produce. (Voucher credits would be cancelled once spent, like train tickets, preventing hoarding and the centralisation of wealth into fewer and fewer hands that happens under capitalism.) However — and this is where digital and computing power really come into their own — a grading system would be required to incentivise types of work and productivity rates, and a marketing algorithm would be required to adjust and stabilise prices according to supply and demand, i.e. ensure production on a break-even basis in order to prevent unsustainable debt and hyperinflation.

Marxists are accused by anarchists and ‘left communists’ of ‘not wanting’ this system, because socialist states to date have not abolished money. For starters, though, money performed a different function in the Soviet Union. As the Marxist Henryk Grossman (who did not even like the Soviet Union’s leadership) explained in his letters to Paul Mattick:

“You must judge this planned economy… on the ideas that in principle underlie it. I was in the SU in 1932 and did not limit myself to the theoretical declarations of the various theoreticians, but also asked the practical planners how the plan is ‘made’.

“I gained the impression that over there they make calculations in use values [the utility of a product], insofar as it was a matter of the duration of production (annual or five yearly). That these volumes of use values are expressed in money at the same time in fact changes nothing.

“Because money here only plays the role of an index for the purpose of exact comparisons, since you cannot compare 10 tonnes of potatoes + 2 wagons of coal in 1934 with 8 tonnes of potatoes + 1 wagon of wheat + 1 wagon of coal in 1928, if all the quantities are not reduced to value indices. But money has changed its function in the sphere of production as well as in the sphere of circulation.”

But again, the retention of money came down to the lack of a world socialist system. Furthermore, the accusation reduces socialism to something that comes about purely from desire, rather than historical and economic necessity that results from capitalism’s unsustainability. The inevitable rise of automation means the world rate of profit, which trends historically towards zero, is now lower than ever before. As a result British pound sterling has devalued by more than 99.5% since its founding; the US dollar by 96% since 1913. It seems, then, that fiat currency is dying a natural death, surely making a voucher system tied to labour time, for the first time, an economic necessity, whether Marxists ‘want it’ or not!

Indeed, the conditions for world socialism, both economically and technologically, are now much riper than they were 100 years ago. Certainly it seems any post-revolution transition to the higher stage of communism has the potential to take much less time had the world become socialist in the early 20th century. In the cases of Russia and China, they had barely emerged from feudalism, let alone gone through the full historical phase of monopoly capitalism, as the US and Europe has now done over the past 140 years. The idea that ‘pro-state Marxists’ will pursue an indefinite ‘capitalist road’ is nonsensical, since automation is making capitalism impossible and the completion of the productive forces’ historical trend to full automation can only be completed under socialist relations of production.

And once the world is socialist, with capitalist competition abolished, world peace will reign, ending the need for defence spending.

Read more: With hyperinflation looming and automation abolishing the source of profit, socialism is becoming an economic necessity

The Soviet Union started out planning with paper and abacus. Even the technology available in the latter-day socialist bloc was not particularly good, especially compared to what is available now, given that computing power tends to double every 18–24 months. The algorithm and live-feed data analysis technology available now would obviously take socialist planning to the next level. Between 1969 and 2013, computer planning became 100 billion times more powerful.[11]

Paul Cockshott, author of Towards A New Socialism, gives a useful summary on why the problems formerly associated with planning no longer exist:

“Using basically administrative techniques, with almost techniques like military command and control, it was certainly possible to carry out rapid industrialisation. And the Soviet industrialisation happened faster and was more successful than any other one. From that point of view the Soviet system was very successful. However that kind of directive command and control by manual administrative means meant it was difficult to regulate more than maybe one or two thousand products and set plan targets for these products. Within this plan broad categories of products, each one of them would be made up of many individual products within that category were used, but the plan targets were not expressed in quantities of particular models of good from that factory to be delivered each year.

They were in terms of so many roubles of this product category to be delivered this year and the control system therefore had a mismatch with the number of different products to be produced. If you just were planning large commodity like categories — concrete, pig iron, aluminium ingots — it works fine, but for finely detailed industrial products you could hit plan targets in rouble terms but have an inappropriate mix in the fine details of the products. And that is the point Nove made. So you needed to be able to plan down to the individual product code.

Nowadays capitalist economies have the information processing techniques to do that. Every time we buy something in the supermarket the bar code, the individual product code of that thing is scanned and is recorded on the supermarket computers and orders are issued at the end the week for the exact goods that have been sold. And that requires an information processing capacity that can only be achieved through informatisation. That detailed bar code level planning developed themself. You have to plan from the consumer side in a sense of human consumers but also, much more critically, from the standpoint of industrial consumers. The right parts or equipment have not always been available and delivered.”

Even auto-planning is now becoming possible, overcoming the limits of the human brain.

It is perhaps useful to think of the overall question theoretically in contemporary terms. The upcoming roll out of the 5G smart grid (the upgrade of the world’s communications infrastructure from the current 4G technology) and the ‘Internet of Things’, creating truly ubiquitous connectivity and amounting to a ‘global brain’ that will govern the world economy, again shows that — unlike the far right explanation that Big Tech is only doing this to achieve world domination — the productive forces monopolise both economically and technologically under capitalism, which continues to need to accelerate productivity and the circulation and turnover of capital in order to meet the ever-rising demands of accumulation. For the working class to expropriate such a ‘global brain’ from the capitalists would in theory be to make a world socialist revolution. Capitalism forges the weapons that brings death to itself, as The Communist Manifesto says.[12]

Elsewhere in the Manifesto Marx and Engels clearly show themselves, in fact, to be communists and not, as is sometimes claimed, anarchists: “The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the state, [our emphasis] ie of the proletariat organised as the ruling class; and to increase the total of productive forces as rapidly as possible.”[13]

In section IV of the Critique of the Gotha Programme, Marx says that the question of the transformation of the state “can only be answered scientifically… Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state [our emphasis] can be nothing but the revolutionary dictatorship of the proletariat [ie an all-socialist state].”

Proletarian democracy

Anarchistic theories are then proven to be incorrect. Indeed, the anarchist theory of capitalism itself tends to be wrong, as it tends to claim that capitalists attack the working class for purely ideological reasons, whereas Marx established that such attacks are absolutely necessitated by the ever-rising demands of capital accumulation, since wages and expenditure on public services eat into profit when an ever-greater amount of profit is needed to preserve and expand the total value of capital.

No one can promise ultraleft fantasies to immediately abolish religion, prisons, the nation-state, etc. Certainly the change in economic and class character of the state and repurposing reforms can transform certain institutions considerably, but such institutions have to be made increasingly irrelevant — by significantly improving material conditions, both nation-wide and internationally — before most people will agree that they should be officially abolished or at least completely transformed. (Indeed, religion already tends to be most irrelevant where living standards are highest.)

Workers are not a monolith possessing some kind pure proletarian consciousness; indeed, the international working class is incredibly diverse, and every individual worker has their own priorities, ambitions, opinions and values. By the time revolutionary situations arise, the working class has also been bolstered by a section that was previously semi-proletarian or middle or lower middle class, likely bringing with it alls its ‘bourgeois prejudices’. But it is this shift in the balance of class forces that makes revolution objectively possible where it previously was not. As Marx says, winning over this class or at least incentivising its capitulation or co-operation is ‘very important’. The failure to do so in the past has resulted in defeat and even outright fascism.

All successful socialist transformations have had a national character, none have abolished their borders and none have abolished prisons. This has reflected what has been possible at the time and the general existing character of the masses. There is no pure revolution. It is incentives, of ‘bread, land and peace’, for example, that have won over the masses to socialism in the past. In the age of automation and 3D printing, our manifestos should surely be based on the promise of abundant material wealth for all.

If you accept that the working class is not a monolith and in fact rather diverse, you have to accept that a society ruled by workers needs a central body — a state — to mediate relations between sections and individuals in the working class. Just as a society ruled by capitalists needs a central body — an all-capitalist state — to mediate relations between sections of capital and individual capitalists, a society ruled by the proletariat needs an all-socialist state.

By extension, just as the dominant section of capital dominates the capitalist state until a new dominant capital emerges (banking capital in the early stage of capital, industrial capital in the latter stage), if we are to be materialist rather than utopian thinkers, there has to be some level of acceptance that a workers state is probably going to be dominated by the dominant demographic in the working class, and that the dominant demographic will not change until changes enacted in the economic base have brought about demographic shifts.

For example, the Cuban state still looked very male after the revolution, but is now more evenly split between men and women, reflecting the fact that a much bigger proportion of women now have professional careers and economic independence (even though there is still some way to go). Logically then we could perhaps imagine that the state by the time it really begins to wither away with a high stage of communism could be dominated by mix raced non-binary people, since the political-economic categories of race and gender will have also increasingly withered away, continuing the trend of integration that began during late monopoly capitalism. But we cannot expect a socialist state to immediately ‘look’ exactly as we’d ideally wish. Socialism cannot leap over necessary stages of development into utopia.

Socialism is not defined by ‘good’ or ‘bad’ policies but by the mode of production and the working class, all-socialist character of the state. But because it is driven by production according to need/utility rather than private profit, and removes the fetter on productivity (surplus capital that is unprofitable to reinvest), socialism is a higher mode of production that does away with unemployment and economic crises before leading to a productive system of abundance for all; and will therefore progressively and consistently improve material conditions, thereby enabling ongoing social, cultural and political progress. As we have seen in the past 10 years of austerity, society tends to get meaner with increasing scarcity, which intensifies competition for resources. So the basis of progressive politics has to working towards post-scarcity.

Ultimately, anarchism asks too many people to make too many changes to their way of life too quickly, and therefore — like other forms of ultraleftism, which admittedly includes many pro-state Marxists going through the inevitable growing pains of radicalisation — cannot amass enough support to achieve its aims.

We urge anarchists and ultraleftists to combat their idealism and take up scientific socialism.


[1] Capitalism’s tendency towards monopoly is a necessary counter-measure to capitalism’s tendency towards breakdown and the tendency of the rate of profit to fall. The Myth of Capitalism: Monopolies and the Death of Competition (2018) by Jonathan Tepper and Denise Hearn found that: four corporations control 90% of American beer; four airlines completely dominate airline traffic, often enjoying complete local monopolies in their regional ‘hubs’; five banks control half of US banking assets; in many states, the top two insurance companies have 80–90% market share between them; 75% of US households can only access one monopoly provider for high-speed internet; four companies control the entire US beef market; three companies control both 70% of the global pesticide market and 80% of the US corn-seed market; Google’s share of internet search traffic is 90%; and so on. “The scale of mergers is so extreme,” write the idealist libertarian authors, “that you would almost think American capitalists were trying to prove Karl Marx right.”

[2] A state monopoly does not have to mean individual types of products are made in only one plant, as was sometimes the case in the Soviet Union, which also had problems with rewarding maximum output over efficiency, which incentivised exaggerated data feedback. We envisage moving towards a diffusion of all products being made as locally as possible, ie a transition from state ownership towards community ownership, but in a way that links sector enterprises together nationally and internationally, with in-built incentives — improving working conditions, increased free time, etc — to maximise efficiency and report accurate data, at least where this cannot be immediately automated.

[3] A company can only centrally plan its own activity; the competition between companies knocks plans off course, while unanticipated changes in economic growth and other factors mean an overall plan for an industry or an economy let alone the system as a whole is impossible. Whereas capitalist enterprises can plan based on attempted forecasts, socialist states can conduct plans based on goals. The capitalist state is always planning in terms of allocating funding etc but at certain stages of crisis it is forced to try to plan the economy as a whole, as is the case with Keynesianism, but to no avail. This only serves to show that a system which can plan the economy as a whole is required.

[4] Keynesianism is basically social democracy. The state takes over a significant section of industry but only serves capital in the long run by cheapening production before industry is reprivatised. Keynesianism has only really been possible when private ownership has become unprofitable. Bretton Woods was the postwar agreement that saw the US dollar become the global reserve currency and the establishment of the UN, IMF and World Bank.

[5] Kevin Farnsworth, a senior lecturer in social policy at the University of York, released a study in 2015, The British Corporate Welfare State. For the financial year 2011–12 he added up the subsidies and grants paid directly to businesses, which amounted to over £14bn — almost three times the £5bn paid out that year in income-based jobseeker’s allowance. Add to that the corporate tax benefits, the value of cheap credit made available to banks and other businesses, the insurance schemes run by the government to protect exporters, the marketing for British business by the relevant state ministry, plus public procurement from the private sector, and Farnsworth calculated that direct corporate welfare cost British taxpayers nearly £85bn. This was a conservative estimate, and it did not include the public subsidy provided to bail out the banks.

[6] Mazzucato, The Entrepreneurial State, p31.

[7] “Do farmers make more from subsidies than agriculture?”,, 11 August 2016.

[8] Pento, The Coming Bond Market Collapse, p123.

[9] Mazzucato, op cit, p52.

[10] Mandel, Late Capitalism, pp228–9.

[11] Dyer-Witherford, “Red Plenty Platforms”, Culture Machine 14, p8.

[12] Marx and Engels, The Communist Manifesto, p33.

[13] Ibid, p11.

Ted Reese is a Marxist and author of: Socialism or Extinction; Humanising Production; and The Thought of Henryk Grossman (May 2022).