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Taxation. In the long run taxes are a burden on the capitalist class only. Wages and salaries (not some theoretical gross, but what is actually received, what the employer invests as ‘variable capital’) corresponds more or less to the cost of maintaining and reproducing the working skills which employees sell to employers. During their time in employment employees perform surplus labour, they create surplus value which belongs to the employer. The upkeep of the state and its machinery of government ultimately fall on surplus value, or incomes derived from surplus value, through taxation. Moreover, it is in the interest of the ruling class to maintain the state apparatus because it maintains their dominant social position - though of course that doesn’t stop them complaining about the cost and demanding cuts in its running charges.

Rises in tax (direct and indirect), by increasing the cost of maintaining employees and their skills, are generally passed on, through the operation of market forces, to employers in the form of increased money wages and salaries. However, this process is not automatic or inevitable: workers have to struggle for higher wages and salaries. (See also LABOUR POWER; STATE.)


Trade unions. Organisations of employees who have joined together to improve and defend their pay and conditions of work. Necessary as they are under capitalism, the unions are strictly limited in what they can achieve for their members within the capitalist system of society out of which unions arose and within which they operate. Capitalist private companies and state capitalist nationalised industries are both operated for the purpose of making a profit and they cannot long survive without it. Trade unions cannot push wages up to a level that prevents profits being made. When companies are marketing their products profitably a union can hope to win concessions by threatening to halt production and interrupt the flow of profits. But against a firm nearing bankruptcy, or during a depression when firms generally are curtailing production, laying off workers or closing down whole businesses, the strike is a blunted weapon.

Even in central and local government, where the issue of profitability may not appear to arise, workers cannot isolate themselves from developments in the forces of production and are compelled to remain competitive in terms of pay and conditions with workers in the rest of the economy. The class struggle affects all employees. (See also CLASS STRUGGLE; STRIKE; WAGES.)


Henry Pelling, A History of British Trade Unionism, 1992

Michael D. Yates, Why Unions Matter, 2009

TUC history online:


Transformation problem. Many economists (including some who claim to be Marxist) maintain that prices cannot be transformed from values in the way Marx described in Capital. The critics make a couple of assumptions about Marx’s theory of value. First, it is assumed that value and price must be two separate systems. Second, it is assumed that inputs into production and the outputs that subsequently emerge must be valued simultaneously, and the input and output prices must be equal.. When these assumptions are made, so the critics claim, Marx’s theory of value becomes ‘internally inconsistent’ and breaks down.

However, these assumptions are mistaken. In Marx’s theory, value and price are interdependent; profit exists when, but only when, surplus labour has been performed. The assumption that value and price must be two separate systems implies that there can be profit without surplus labour, which is a major misinterpretation of Marx’s theory. And the assumption concerning simultaneous valuation and the equal prices of inputs and outputs flatly contradicts the main principle upon which Marx’s value theory is founded, that value is determined by labour-time. It is because valuation necessarily involves labour-time that input and output prices can differ. Andrew Kliman has shown that the ‘internal inconsistencies’ appear when the theory is viewed as a simultaneous valuation and disappear when not viewed as a simultaneous valuation. In short, the critics have misunderstood Marx’s theory of value. (See also LABOUR THEORY OF VALUE; PRICE; VALUE.)


Andrew Kliman, Reclaiming Marx's “Capital”, 2007


Transitional society. The idea of a transitional society called ‘socialism’ was made famous by Lenin, though others such as William Morris also accepted the idea. In Lenin’s Political Thought (1981), Neil Harding claims that in 1917 Lenin made ‘no clear delineation’ between socialism and communism. But in fact Lenin did write in State and Revolution (1917) of a ‘scientific distinction’ between socialism and communism:

What is usually called socialism was termed by Marx the “first”, or lower, phase of communist society. Insofar as the means of production become common property, the word “communism” is also applicable here, providing we do not forget that this is not complete communism.’

The first sentence of this quote is simply untrue and Lenin probably knew it was. Marx and Engels used the terms socialism and communism interchangeably to refer to the post-revolutionary society of common ownership of the means of production. It is true that in his Critique of the Gotha Programme (1875) Marx wrote of a transition between a lower phase of communism and a higher phase of communism. Marx held that, because of the low level of economic development (in 1875), individual consumption would have to be rationed, possibly by the use of labour-time vouchers (similar to those advocated by Robert Owen). But in the higher phase of communism, when the forces of production had developed sufficiently, it would be according to need. It is important to realise, however, that in both phases of socialism/communism there would be no state or money economy. Lenin, on the other hand, said that socialism (or the first phase of communism) is a transitional society between capitalism and full communism, in which there is both a state and money economy. According to Lenin: ‘It follows that under communism there remains for a time not only bourgeois right, but even the bourgeois state, without the bourgeoisie!’ But Lenin and his followers failed to see what this would involve. In effect, the theory of ‘socialism’ as a transitional society was to become an apology for state capitalism. (See also CAPITALISM; LENINISM; SOCIALISM; STATE CAPITALISM.)


Adam Buick, The Myth of the Transitional Society, 1975(HTML) (PDF) (RTF)

(also at:


Trotsky, Leon (real name: Lev Davidovich Bronstein, 1879-1940). The son of moderately well-off peasant farmers in the southern Ukraine. As a student at the University of Odessa he became an anti-Tsarist revolutionary. He soon fell foul of the authorities and was sentenced to prison and exile in Siberia from where he escaped in 1902 using the name of one of his jailers on his false identity card. This name - Trotsky - he was to use for the rest of his life.

Trotsky played a prominent part in the 1905 revolt that followed Russia’s defeat in the Russo-Japanese war, being elected the Chairman of the St. Petersburg soviet. He denounced Bolshevism as a formula for a ‘dictatorship over the proletariat’ and tended to favour the Mensheviks until he returned to Russia after the February revolution in 1917, and together with Lenin led the October insurrection and the civil war which followed. After Lenin’s death Trotsky was gradually eased out of power, finally ending up in exile in Mexico. In 1930 he wrote The History of the Russian Revolution. Trotsky led the opposition movement against the supposed ‘betrayal’ of the revolution by the Stalinist bureaucracy, as set out in The Revolution Betrayed (1936). In 1938 Trotsky and his followers founded the Fourth International which, in the opening words of its manifesto written by Trotsky, declared that: ‘The world political situation is chiefly characterised by historical crisis of the leadership of the proletariat’. In 1940 an agent of Stalin assassinated Trotsky with an ice axe (not an ice pick, as many writers claim). (See also TROTSKYISM.)


David Renton, Trotsky, 2004

Robert Service, Trotsky: A Biography, 2010

Trotsky online:


Trotskyism. A variant of Leninism. (All Trotskyists are Leninists, but not all Leninists are Trotskyists.) Trotsky’s contribution to Leninism is ‘the theory of the permanent revolution’ which argued that, because of Russia’s economic backwardness, the minority working class had to seize the initiative and revolutionise society through capitalism to ‘socialism’. At the same time, progress was dependent on a successful revolution in Europe. Of course, the revolution in Europe failed to materialise. But Trotskyites maintained that Russia was a post-capitalist ‘degenerate workers state’ in which a bureaucracy had usurped political power from the working class but without changing the social basis (nationalisation and planning). This separation of economic base and political superstructure contradicts Marx’s writing on this subject.

Trotsky’s theory clashes with Stalin’s doctrine of ‘socialism in one country’, and it is typical of Trotskyism that it defines itself in terms of individuals. Not for them the materialist theory of history but rather the Great Man theory of history: not an account of objective social development but how Trotsky lost out to Stalin in a power struggle for the leadership. This approach also ignores the problems inherent in Leninist ideology and, indeed, the dictatorial tendencies within Trotsky’s own writings. Lenin laid the basis for Stalin’s rule and it is a moot point how much Trotsky would have differed. Trotsky stood for a one-party dictatorship.

Trotsky set up the Fourth International in 1938 on the basis of his prognoses. Most of these turned out to be mistaken; most notably, the alleged rapid demise of Social Democracy and Stalinism and the spread of fascist regimes throughout the world. Nevertheless, Trotskyist groups continue to abound, all committed to the cult of the leader. For instance, John Callaghan records how Tony Cliff’s leadership of the International Socialists permitted abuses ‘… such as the decisions to launch the Right to Work campaign (late 1975) and the Socialist Workers’ Party (late 1976) without consulting the membership’ (emphasis added).

The Socialist Workers’ Party, and the more orthodox Trotskyist groups, support reforms on the grounds that they are ‘transitional demands’. These reform demands are said to be different from those of Labour and Social Democratic reforms in that Trotskyists are under no illusion that the reforms demanded could be achieved within the framework of capitalism. They are posed as bait by the vanguard party to get workers to struggle for them, on the theory that the workers would learn in the course of the struggle that these demands could not be achieved within capitalism and so would come to struggle (under the leadership of the vanguard party) to abolish capitalism.

Actually, most rank-and-file Trotskyists are not as cynical as they pretend to be here: in discussion with them you gain the clear impression that they share the illusion that the reforms they advocate can be achieved under capitalism (as, indeed, some of them could be). In other words, they are often victims of their own ‘tactics’. (See also LENINISM; TROTSKY.)


John Callaghan, British Trotskyism, 1984

Trotskyism online: