Frederick Engels wrote in 1878:
“But….. conversion into state property (does not deprive) the productive forces of their character as capital…..the modern state, too, is only the organization with which bourgeois society provides itself in order to maintain the general external conditions of the capitalist mode of production against encroachments either by the workers or by individual capitalists. The modern state, whatever its form, is an essentially capitalist machine, the state of the capitalists, the ideal aggregate capitalist. The more productive forces it takes over into its possesses the more it becomes a real aggregate capitalist, the more citizens it exploits. The workers remain wage-workers, proletarians. The capitalist relationship is not abolished, rather it is pushed to the limit. But at this limit it changes into its opposite. State ownership of the productive forces is not the solution of the conflict, but it contains within itself the formal means, the handle to the solution…..The proletariat seizes state power…..” (F. Engels, Anti-Duhring, p. 360)
It seems as though these clear and simple words by Karl Marx’s comrade, uttered 60 years ago, refer expressly to the recent transformation of the oil industry and railways into the property of the Mexican capitalist state. it is of primordial importance for the Mexican proletariat to understand the fundamental truth contained in the passage:
“… the modern state, too, is only the organization with which the bourgeois society provides itself in order to maintain the general external conditions of the capitalist mode of production against encroachments either by the workers or by individual capitalists. The modern state, whatever its form, is an essentially capitalist machine, the state of the capitalists, the ideal aggregate capitalist.”
How many are there today, among those who call themselves ‘Marxists’, who would recognize the truth of these affirmations of one of the founders of Marxism? How many are there who would admit that these affirmations relate to all capitalist states, whatever their form, ie., including the capitalist states which assume a ‘workerist’ title? How many would dare to say that these ‘workerist’ states also exploit workers and that this exploitation grows more and more as these states incorporate as their property more productive forces? How many would dare to say that in each new ‘nationalization’, the capitalist relations between owners and producers — (in other words, between capitalists and workers), far from being extinguished through such measures, are sharpened and brought to a pitch? Who today dares to say that these affirmations refer also to the recent ‘nationalizations’ of the oil industry and the railways?
Who in Mexico today dares to say that all these affirmations by Frederick Engels are relevant to the recent ‘nationalizations’ of oil and railways? Why don’t the ‘Marxists’ of Mexico apply the teachings of Marxism to the problems of today?
Why don’t they, to start with, clarify the fact that ‘nationalization’ can under no circumstance mean the property of ‘the nation’, but only and exclusively the property of the state; in other words, the property of one part of ‘the nation’, namely, of the bourgeoisie, whose instrument is the state? To put it differently, why don’t they explain that by becoming ‘nationalized’ property simply passes from the hands of the ‘collective capitalist’ (using Engels’ phrase), that is, the state of the capitalists.
The real meaning of the nationalization of the oil industry and the railways
What is then, according to Marxism, the extent and meaning of the ‘expropriation’ of the property of the oil companies? In simple words: this property has passed from the hands of one set of exploiters (the oil companies) to the hands of another (the Mexican state). Only that, no more, no less. The nature of this property has not changed at all: it remains capitalist property as before. The workers remain in the same position as proletarians: they have to sell their labor power to the owner of the means of production; in other words, to the owner of the oilfields, of the machinery utilized, of the distribution network. And this owner (today the Mexican state) pockets the surplus value produced by the workers — or, what is the same – exploits them. Put differently, the Mexican oil industry has become a single gigantic PETRO-MEX (the state oil corporation), with ‘national’ foremen and specialists instead of foreign ones, and the main task of this large petromex is exactly the same as the one of the previous small petromex: impede or break strikes, as it did with the protest strike of last year.
Just like before the expropriation, the two fundamental classes of capitalist society — capitalists and proletarians, exploiters and exploited, confront each other in the present Mexican oil industry. The oil industry remains what it was before: the bastion of the capitalist system in Mexico — only that this bastion is today politically stronger than before. Instead of confronting many foreign companies only protected by the Mexican state, workers today confront directly this state, with its workerist demagogy, with its ‘conciliation’ boards, its police, its prisons, and its army. The struggle of the oil workers is today a thousand times more difficult than before. The state continues protecting capitalist property; and therein resides its fundamental role. But nowadays this function has changed in form — to make it more effective and safeguard the oil industry from workers’ attacks, the state has declared as its own that which it has to defend, namely, the property of the American and English capitalists.
The ‘workerist’ state defends the capitalist system against the proletarian revolution
According to the system of Marxism, the state is an institution born from the division of society into classes with irreconcilable interests. Its function is to perpetuate this division and with it “the right that the owning class has of exploiting the class that owns nothing and the domination of the former over the latter.” (Frederick Engels)
The modern state is the organization that the bourgeoisie utilizes to defend its collective interests, its class interests, against the attacks of the workers on the one hand and the individual capitalists on the other (especially against those capitalists and companies which do not want to sacrifice part of their individual interests in favor of the defense of the collective interests of the whole bourgeois class against the workers). All the activities of the capitalist state, even if it calls itself ‘workerist’, serve this one goal: the strengthening of the capitalist system. In the expanding phase of capitalism, the strengthening of capitalism had a progressive character, in spite of the growing oppression that resulted from it, because in those times history had not yet put the proletarian revolution on the order of the day. Capitalist progress was the only possible progress. Today, in its phase of decomposition, that is to say, in the imperialist phase in which we are living, the reinforcement or the ‘reform’ of capitalism has an extremely reactionary and counter-revolutionary character, because today only the destruction of capitalism can save humanity from barbarism. The present role of the state is to defend capitalism against the proletarian revolution. In the imperialist phase the capitalist state — whatever its form — is the true incarnation of reaction and counter-revolution. Today there doesn’t and can’t exist a progressive capitalist state. They are all reactionary and counter-revolutionary. To reinforce the state means to prolong the life of this barbarous capitalist system. Only those who struggle for the destruction of the capitalist state are on the side of the proletariat and all the exploited and oppressed, struggling with them for their emancipation via the proletarian revolution.
When are nationalizations progressive?
The above mentioned words by Engels regarding the meaning of the transformation of individual capitalist property into joint-stock companies and their conversion into property of the capitalist state referred to the ascendant phase of capitalism, to the phase of its expansion, when the capitalist system was progressive. During that phase, the concentration of the productive forces in the hands of capitalist groupings and in the capitalist state constituted an important step forward, in the sense of the growing socialization of production, which in turn posed for humanity the task of socializing the property of those productive forces. We quote Engels again:
“The period of industrial boom with its unlimited credit inflation no less than the crash itself operating through the collapse of large capitalist establishments, drives towards that form of the socialization of larger masses of means of production which we find in the various kinds of joint-stock companies. Many of these means of production and communication are so colossal from the outset that, like the railways, they exclude all other forms of capitalist exploitation. At a certain stage of development this form, too, no longer suffices; … the state, the official representative of capitalist society, is (finally) constrained to take over the direction of production. This necessity for conversion into state property first appears in the big communication organizations: the postal service, telegraphs and railways.” (Frederick Engels, Anti-Duhring, p.358-59)
But, adds Engels, “…it is only when the means of production or communication have actually outgrown direction by joint-stock companies and therefore their nationalization has become economically inevitable — it is only then that this nationalization, even when carried out by the state of today, represents an economic advance, the attainment of another preliminary step towards the seizure of all the productive forces by society itself. But since Bismarck became keen on nationalizing, a certain spurious socialism has recently made its appearance — here and there even degenerating into a kind of flunkeyism — which without more ado declares all nationalization, even the Bismarckian kind, to be socialistic. To be sure, if the nationalization of the tobacco trade were socialistic, Napoleon and Metternich would rank among the founders of socialism. If the Belgian state, for quite ordinary political and financial reasons, constructed its own main railway lines, if Bismarck, without any economic compulsion, nationalized the main Prussian railway lines simply in order to be better able to organize and use them in face of war, in order to train railway officials as the government’s voting cattle, and especially in order to secure a new source of revenue independent of parliamentary votes, such actions were in no sense socialistic measures, whether direct or indirect, conscious or unconscious. Otherwise, the Royal Maritime Company, the Royal Porcelain Manufacture, and even the regimental tailors in the army would be socialist institutions.” (Engels, ibid, p.359).
Nobody will say that the nationalization of the Mexican oil industry was economically inevitable due to the fact that its administering — from the standpoint of production — was overwhelming the control by private companies. And nobody predicts any economic progress resulting from the transformation of this industry, which belonged to companies a thousand times better organized and more powerful than the Mexican state which now owns it.
In reality, the only words from the cited Engel’s quote which are relevant to the recent nationalizations in Mexico are those which talk about ‘political and financial reasons’, and of the concern by the state in creating for itself a ‘new source of revenue’, and converting the railway officials into ‘government voting cattle’.
Such nationalization, says Engels, represents no progress.
The reactionary character of nationalizations in the imperialist phase of capitalism
Only by analyzing the recent nationalizations in Mexico as part of the process of decomposition of capitalism we can understand their true historic significance.
In the ascendant phase of capitalism there was the possibility of progressive nationalizations, although many of them, as we can see in the examples given by Engels, did not have such character. Today, in the phase of decomposition of the capitalist system there isn’t even the possibility of nationalizations with a progressive character, just as there can be not a single progressive measure carried out by capitalist society in decomposition and by its official representative, the capitalist state.
In the ascendant phase of capitalism the initial framework for the expansion of production and the concentration of property was the unified national state, whose formation was progressive in comparison with the dispersed feudal associations. But soon the expansion of production and the concentration of property bypassed the limits of the national states. The large joint stock companies took on a greater and greater international character, creating in their fashion an international division of labor, and this, — in spite of its contradictory character — constitutes in turn one of the most important contributions of capitalism to the progress of humanity.
The greater international character of production began then to clash with the division of the world into national states. ‘The national state’, asserted the First Congress of the Communist International in 1919, ‘after having given a strong push to capitalist development, has become too narrow for the expansion of the productive forces.’
During that phase in which the national state constituted a progressive factor, in other words, in the ascendant phase of capitalism (and the words of Engels cited above refer only to that phase when certain nationalizations could have a progressive character), the conversion of property into joint stock companies, and then into state property was progressive. This was so because, in general, joint stock companies had not yet bypassed the framework of the national state.
But when the joint stock companies became structures encompassing already various states, nationalizations began to change their meaning: they increasingly went against the growing international division of labor. Thus, instead of constituting progress, they meant regression. The only possible progress today is the conversion of the property of the great joint stock companies and that of the capitalist state into property of the proletarian state which will emerge from the communist revolution.
Above all, nationalization during and after the World War threw into sharp relief their reactionary character throughout the whole of the capitalist world. Their objective is no longer the expansion of production, but its restriction – with one significant exception: the war industries!
One of the fundamental goals of nationalizations during World War of 1914-18, and during the recent wars of El Chaco, Ethiopia, Spain and China, was the restriction of production of consumer goods, and the production of means with which to destroy not only what has been previously produced, but the producers themselves. And this is applicable not only to the countries which directly participated in the war, but to all, whether Fascist or democratic governments. The nationalizations by both sides during the Spanish Civil War, and the recent nationalization of the railways and the war industries by France are cases in point. Destruction, not construction, is the great goal of capitalist society in its hour of agony.
While nationalizations in the past were expressions of the growth and expansion of capitalism, in the present they are the opposite. They are the expression of regression and of the more and more violent decomposition of the capitalist system. Before disappearing from the historic scene, capitalism destroys great parts of what it itself has created: the superb machinery of production, and the international division of labor. Capitalism thus, increasingly, subjects the productive forces to the confines of the national states.
Against this, when the proletariat’s hour arrives, it will ‘free the productive forces of all countries from the chains of the national states, thereby unifying all peoples in close economic collaboration.’ (Manifesto of the First Congress of the Communist International)
These are clear words, in irreconcilable opposition to the ideas of those who want to combine the watchwords of the proletarian revolution, which already has an international character, with those of so-called ‘national emancipation.’
The only possibility of liberating the oppressed peoples resides in the destruction of all national states by the victorious proletarian revolution and the unification of the entire world through close fraternal cooperation.
The triumph of the ‘good neighbor’
What we have said in a general way regarding the meaning of nationalizations in the phase of the decomposition of capitalism, needs certain additions and modifications in the case of semi-colonial countries like Mexico.
If it could be possible to place a part of the property of large international companies under the effective control of a small national state, it is clear that such nationalization would not increase the international division of labor created by capitalism; on the contrary, it would undermine and destroy it, thereby revealing its reactionary character, even more than in the case of the large imperialist states.
But, in reality, an effective nationalization on the part of small states is impossible, especially regarding the property of the large international companies, because it is them and their imperialist governments who control completely the economic and political management of small states. Only the imperialist states can nationalize today, either within areas of their direct political control or in the small states controlled by them. The ‘nationalizations’ carried out by the latter are, consequently, nothing but a farce, a change of label. Who is really ‘nationalizing’ is not really the small ‘free and anti-imperialist’ state, but the actual imperialist proprietor.
The only possible change would be that the small state, in our case the Mexican, passes from being under the control of some imperialist companies and their state, to being under the control of other companies and their state.
And this is precisely what has happened in the case of the recent oil ‘nationalizations’ in Mexico: the great North American companies (Huasteca-Standard Oil and Gulf) plus their state no longer have to share the control of the oil resources and the whole destiny of Mexico with the English company E1 Aguila (Royal Dutch-Shell), and with their English state. Through the so-called ‘nationalization’, the North American companies have become the exclusive proprietors of what the Mexican bourgeoisie calls ‘our Fatherland’.
What has happened in this case is the only thing that can happen in the imperialist phase of capitalism. All the supposed ‘national redemptions’ inevitably mean the triumph of one or another imperialism. In the case of Mexico the victor has been the famous ‘good neighbor’.
The international bourgeoisie admits this with all frankness, as we can see in the following viewpoint expressed in the Bulletin of the Service Archives of Geneva (we quote from the Ultimas Noticias of 7th June): “From now on the United States is the indisputable masters of all the aspects of Mexican life. The last English (in Latin America) has been razed to the ground. The bridge to South America is now open. The United States has utilized the only possibility of defeating the English presence in Mexico, and it has done so without firing a shot. Today as yesterday they receive Mexican oil, with the difference that now they buy it from the Mexican government, instead of buying it from the oil companies. The prices are the same, the oil is the same, and the future will shortly show how the companies remain the same regarding their North American origins…. “It was Cardenas, hints the Bulletin, who finally helped the United States expel the British. Apparently it was all so simple. Precisely as the naive English were rejoicing at their owning 60% of the Mexican oil, as against up to the 40% owned by the United States, Cardenas grabbed it all. And, while London was raising a storm over the expropriations, Washington received the news with extraordinary calm… What happened then? The Bulletin suggests that there was a deal, between Washington and Mexico, through which all the oil becomes, in effect, ‘American’, “thereby definitely demolishing the last British fortress in this hemisphere”. This is what a bourgeois newspaper in Switzerland tells us.
E1 Nacional, organ of the Mexican government, gave the same interpretation when it announced the rupture of diplomatic relations with the English government. It carried these two headlines side by side: ‘Mexico breaks with England/Talks with the American companies on a good path’.
One doesn’t need a better illustration of the transformation of Mexico into an exclusively North American colony than the flattery yankee imperialism receives in each number of E1 Nacional and in all the speeches by high Mexican functionaries. According to them, today North American imperialism is in reality ‘anti-imperialist’. Only English imperialism is imperialism.
And the great traitor Leon Trotsky helps them in this propaganda, with his open letters in which ‘imperialism’ also means ‘English imperialism’, and not a word is whistled by the author of these letters about American imperialism…
How ‘workers’ management should save capitalist property
The capitalist system is in a dead-end situation. Its destruction by the revolutionary proletariat is historically inevitable.
But, in these moments, the proletariat, weakened and disoriented by so many defeats and betrayals, is protecting the capitalist system instead of fighting it with the aim of destroying it and building a new society on its ruins. Helped by all the ‘workers leaders’, the bourgeoisie managed to derail the workers from their own class path, tying them to the interests of capitalism via the state. Blinded by the ideas of democracy and the fatherland, workers are defending what they should destroy. We see this in Spain, in China, in Mexico, all over the world.
Instead of taking advantage of the crisis of the capitalist system to destroy it, the workers — by not believing in the triumph of their own cause — have temporarily become the best defenders of the system. Just like during the (first) world war, they sacrifice their economic gains and their lives in a fratricidal struggle under the orders of their class enemies. Of course we must not insist that today, like then, the responsibility for this lies not on the workers but on those Marxists who have betrayed Marxism and the cause of the proletarian revolution by their capitulation to democratic and patriotic fetishism. And we also don’t have to insist on the fact that the present situation will not last forever, and that sooner or later the proletariat will again reclaim the revolutionary road. Historically, the proletarian revolution remains inevitable and invincible.
In Spain, and above all in Catalonia, we have seen in these recent years how the bourgeoisie managed to avoid the danger of proletarian revolution through the arming of the proletariat and the ‘socialization’ of industries — ie, with their ‘deliverance’ to the workers. The class, under the illusion that they were the owners of the country, desisted in attacking the capitalist institutions. They began to defend with incredible sacrifices that which, in spite of certain label changes, remains capitalist property, and this included the capitalist state. Through the daily massacres in the battlefields of Spain, capitalism is reinforcing itself politically, filling up its senile veins with the blood of the exploited, who come from both sides of the front.
Following the example of the Spanish bourgeoisie, the Mexican bourgeoisie and its good North American neighbor attempt to exorcise the threat of proletarian revolution in Mexico with the ‘delivery’ of industries to the workers. Once these are ‘in the hands’ of the workers, the mortal enemy of the capitalist system will become its best defender — such are the plans of the bourgeoisie in Mexico and Washington.
The Mexican and American bourgeoisie know of the hatred felt by the working masses of Mexico and of the whole Latin America for the large foreign companies. A proletarian attack against them would mean a blow struck at the heart of the capitalist system. That would mark the end of the imperialist domination of Mexico and of all the colonial and semi-colonial countries. The bourgeoisie in those countries, primarily its Mexican variant, know quite well that the only thing that keeps it in power and protects it from ‘its’ workers and peasants is precisely this imperialist domination. No wonder the Mexican bourgeoisie considers the North American bourgeoisie as its ‘Good Neighbor’.
In face of the growing and daily wrath of the masses against the imperialist companies, a way had to be found to avoid at all costs a frontal attack by the workers against these companies. This task was, of course, taken up by the Mexican government. As everybody knows quite well, when semi-colonial governments do not carry out this task, they are overthrown. This has happened to many Mexican governments as it has in Cuba and in other Latin American countries, when they were incapable of deflecting workers’ attacks against the sacrosanct property of imperialism. The ‘Good Neighbor’ requires efficient servants, and experience shows that the most apt servant is a ‘workerist’ government!
For a capitalist ‘workerist’ government, it wasn’t difficult to find the answer to the problem. The false ‘Marxists’ of the Stalinist and Trotskyist type had long since proposed it: for the united front between the proletariat and the bourgeoisie! And against whom? But, believe it or not, against imperialism of course!
In Spain and China that united front between the exploiters and the exploited has already been put into effect, with splendid results for the exploiters, fascists or anti-fascists, imperialists or anti-imperialists, and with dismal results for the exploited on both sides.
In Mexico something very similar has been developing for a long time. At last it took on a definite shape when the farce of the so-called ‘national redemption’ began. Pretending to be waging an irreconcilable struggle against imperialism (in words), the Mexican bourgeoisie and its government (in fact) delivered the destinies of the so-called ‘Mexican fatherland’ to the more and more absolute control of imperialism.
At the same time, by pretending that they were delivering the oil industry and the railways to the workers, they were able to extract from them the most extraordinary sacrifices.
Total victory throughout the front! Under the cover of its ‘nationalizations’, the bourgeoisie and its government hand over the most important industry of the country to the exclusive control of imperialism. Through this deal, the government of the Mexican bourgeoisie acquires a debt of ‘honor’ with the North American and English bourgeoisies; a debt which of course workers will have to pay. These will not only have to accept this sacrifice (‘voluntarily’ as their treacherous leaders claim), but they already have had to give, to the fatherland’s altar, and again ‘voluntarily’ of course, the 50 million pesos that they were demanding two years ago from these companies! We read the following in a report of the Executive Committee of the Oil Workers Trade Union, published in the press of the capital city on 28 April 1938:
“(We have been) in perfect agreement with the Government in the hour in which this was most needed by the Nation, and since we continue to be so, we patriotically accept that the benefits suggested by the findings of the Boards of Conciliation and Arbitration Group 7, should not be effective as long as the present situation prevails. (We accept this) in spite of the sacrifices which the long years of struggle for a better life in the oilfields entail for the oil workers (not for their leaders to be sure!) In addition, the workers in this industry contribute to it various sums (and get what in return?), a fact that even the President knows. All these sums add up to around 140 million pesos. Apart from that, our various sections — conscious of their duties as Mexicans — are contributing on a monthly basis one daily wage for an indefinite period, to help alleviate the economic situation of the nation. This is equivalent to a monthly sum of more than 150,000 pesos.”
Adding all these sums, the famous ‘national redemption’ has costed the oil workers (not to mention the others!) the respectable sum of more than 190 million pesos, apart from the other millions they have lost during the last two years, when they trusted the conciliation boards instead of striking and forcing the companies to pay higher wages. Instead of managing to get at least the 26 million pesos (out of the initial 50 demanded) that the ‘favorable findings of the boards promised, they were forced to pay those very same imperialist companies — via the ‘anti-imperialist’ Mexican government — a sum five times as large. Instead of receiving 26 millions, they have to pay more than 190 millions as their contribution to the so-called ‘debt of honor’!
It would be difficult to find in the whole history of the world bourgeoisie a better example of a perfectly executed swindle. Under the deluge of patriotic verbiage regarding the ‘economic liberation of Mexico’, there lurks history’s most gigantic robbery. The workers instinctively feel that in reality the whole thing has been a swindle, but because they are blinded by the idea that ‘the fatherland is in danger’, they don’t see reality. Hopefully our limited voice will help some understand the real situation, so that they can sober up from their dreams and illusions!
The task of the proletariat in the face of the recent nationalizations
If the false ‘Marxists’ leaders of Mexico lack the courage to denounce the real meaning of the ‘nationalizations’ of oil and railways, they even less risk talking about the task of the proletariat in the face of these nationalizations made by the bourgeoisie for the benefit of the bourgeoisie.
Engels, on the contrary, spoke with the greatest clarity and frankness about this task. Of course he knew nothing about the ‘support for the government’ advocated by traitors to the class. The opposite is the case.
The only road that Engels points out in regards to nationalizations made by the bourgeoisie is the taking of state power by the proletariat, and the transformation of capitalist property, including that belonging to the capitalist state, into property of the proletarian state.
He points out with the utmost clarity the only lesson that workers must draw from the transformation of individualist capitalist property or companies’ property into the property of the capitalist state: “By increasingly driving towards the transformation of the vast socialized means of production into state property, it itself points the way to the accomplishment of this revolution. The proletariat seizes state power and to begin with transforms the means of production into state property.” (Anti-Duhring, p.362)
Of course, this is its state, the proletarian state, the dictatorship of the proletariat.
The task of the Mexican proletariat is not, therefore, to sacrifice itself so that the oil industry and the railways become profitable for the imperialist and ‘national’ capitalists. It isn’t either to go along with the farce of the ‘deliverance’ of industries to a so-called ‘workers’ management’. The task of the proletariat is to seize the industries, that is, to wrench them from bourgeois hands through the proletarian revolution!
That is the only lesson that we should draw from the recent nationalizations!
Comunismo 1938. Translation-International Review, no.19 1979