the Russian social formation: it was the product of a society that had had a successful workers’ revolution. Trotsky of course, was only too aware of the Stalinist reaction, but he failed to draw the conclusion that under Stalin there was an actual counter-revolution even when it became apparent that the bureaucracy was consolidating its rule in the 1930s. His thoughts were based on two premises. Firstly that state ownership of industry could only be provided by a workers’ revolution, and the failure to eliminate it in Russia showed that the state had not completely degenerated. Secondly he accounted for the failure of the workers to throw off the bureaucratic “caste” in terms of the temporary threat to the state’s existence by Nazi invasion.

Unfortunately Trotsky was no economist.Unlike Lenin, Bukharin and Luxemburg he did not understand or even see the processes of the statisation of capital taking place in the western economies. All the same, had he not been murdered by Stalin, he would have seen the foundations for his own view crumble. After the war the bureaucracy emerged not weaker, but stronger than ever: the workers did not cast them aside. And much more important, new regimes emerged in eastern Europe – in Poland, Hungary, Czechoslovakia, Romania, East Germany and Bulgaria – which were set up not by workers’ revolution but by the Russian army itself; in many cases (e.g. in Hungary) using fascist collaborators from the old regime. These societies rapidly acquired a structure that was identical with that of Russia even though