Power and Money
By Ernest Mandel
London: Verso. 251 pp. $34.95
Reviewed by Jason Cheng
Readers familiar with Ernest Mandel's incisive and readable work will not be disappointed by Power and Money, in which he presents a Marxist theory of bureaucracy.
The collapse of Stalinist rule in the Soviet Union and Eastern Europe puts a new test to classical theories of bureaucracy and class. Power and Money explores the social and historical roots of bureaucracy, both within the capitalist state and within the workers' mass organisations.
Mandel draws on archival and contemporary accounts analyse both capitalist administration and the ideology and practice of bureaucratic dictatorship in the Communist bloc. He measures the actual performances of Western and Eastern societies against the forecasts of Lenin and Trotsky, Ludwig von Mises and Roberto Michels, or the more recent reflections of Amitai Etzioni and Alvin Gouldner. The lucid study challenges those theories — Stalinist, Weberian or Social Democratic — which claim that an autonomous officialdom is a necessary feature of modern societies.
Power and Money provides a thorough Marxist analysis of the bureaucratically deformed states, attempting to explain why they collapsed, how they came to be, the deeper historical causes and how a repetition might be avoided. In this sense Mandel answers the vexing question, "Does the socialist project have a future? Will it survive the shipwreck of Stalinism?"
Mandel defines the bureaucracy as a social layer which has appropriated administrative functions previously exercised by society as a whole.
He characterises the bureaucracy's actions in the former Soviet Union as aiming not to restore capitalism nor to build a classless socialist society, but to defend and extend its own power and privilege. It did not have the social, historical and economic roots of a new ruling class, but it did have sufficient autonomy to defend itself. Its historic basis was the decline and later disappearance of independent mass activity, international isolation and industrial backwardness.
The book analyses the complex and contradictory interaction of economic, political, cultural, ideological and psychological forces which led to the disintegration of the bureaucracy's political base.
Mandel explores the tendency of the bureaucracy to create
economic stagnation. This is due not only to its consumption of a large part of the surplus product, but also to its privileges being mainly confined to private consumption — hence it had no objective long term interest in sustained increases in productivity.
He explains that, as growth slowed, a section of the bureaucracy pushed for decentralisation on the "objective" grounds that what was required was greater rights for managers and a legal appropriation of resources for private consumption and private profit. This liberalisation eroded central planning and led to a more prominent role for the law of value and finally a tendency to restore capitalism.
The embryonic transformation of parts of the bureaucracy into a capitalist class is now visible, but this transformation implies breaking the back of the historic gains of the working class in full employment and nationalised property.
The relationship between administrative power and money wealth in the former Soviet Union showed the hybrid character of the bureaucracy. Its non-capitalist nature was expressed in the fact that it ruled not through money wealth but by a monopoly of political power. Its non-socialist nature was expressed in its inability to free itself from the influence of money.
Mandel compares this to capitalism, where all sectors of the bureaucracy — in private firms, in the state, in the mass labour organisations — are unable to break the decisive power of money wealth, which ultimately fashions their limits and function. Here political power is subordinated to money wealth and capital; in post-capitalist societies money is subordinated to political power.
Bureaucratisation in the two societies has some parallels but is not identical. A large part of the book deals with the problem of bureaucracy in capitalist countries.
Mandel starts with the workers' mass organisations, where the apparatus is dominated by full-timers and intellectuals, whose specialisation of knowledge fills the gap caused by the cultural underdevelopment of the membership. This can lead to a monopoly of knowledge ,which can be the basis of power over the members.
He explains the tendency towards "organisational fetishism", in which the goal is subordinated to the defence and consolidation of the apparatus. This breeds a new social layer — the working-class bureaucracy which displays an increasingly conservative outlook. Unwilling to struggle for fear of losing past gains and enjoying material privileges, it eventually assimilates into more upper class circles and adopts their outlook.
Mandel traces the origin of the modern capitalist state and
its function and its relationship to bureaucracy. The state and para-state bureaucracy acts in a similar way to the working-class bureaucracy. Though it is funded by taxes of workers, it often acts in direct contradiction to their interests. It thereby discredits the very idea of social services and public ownership.
The bureaucracy's administrative ideology increasingly spawns economic policies that are virtually identical to those of bourgeois parties. The austerity programs of the Social Democratic governments in France, Spain and Italy are a case in point.
There are further insights into the military bureaucracy, Third World bureaucracy and bureaucracies of large capitalist firms, all with a relative degree of autonomy but in the final analysis subordinate to the interests of money. The question which breeds confusion is the degree of autonomy under different circumstances.
The state, para-state and workers' bureaucracies represent a profound loss of control by the mass of workers. Prospects for a new breakthrough to socialism rest on radically reducing the weight of the bureaucracy within the mass movement.
The bureaucracy consolidates power with the decline in working-class control over its own organisations; therefore the withering away of the bureaucracy rests on a radical increase in the self-activity and self-organisation of the toilers and in their capacity to take the reorganisation of society into their own hands under relatively favourable conditions of material wealth.
Mandel ends by examining the possibilities for socialism and the preconditions for the withering away of the state.
The book stands as a convincing argument for socialism. "The fundamental argument in favour of socialism is precisely that humankind can no longer endure the costs of aggregate irrationality. It has become a life-and-death question to master the most serious irrational tendencies of social evolution. The key question for human survival, then, is to achieve a qualitative increase in the conscious control over social developments, instead of leaving them to spontaneous, uncontrolled, ever more destructive processes."