Trotsky held that in Russia between the 1917 October Revolution and up to Joseph Stalin's consolidation of power, there was a genuine workers' state. The bourgeoisie had been politically overthrown by the working class and the economic basis of that state lay in collective ownership of the means of production. Contrary to the predictions of many socialists such as Lenin, the revolution failed to spread to Germany and other industrial Western European countries, and consequently the Soviet state began to degenerate. This was worsened by the material and political degeneration of the Russian working class by the Civil War of 1917–1923. After the death of Lenin in 1924, the ruling stratum of the Soviet Union, consolidated around Stalin, was held to be a bureaucratic caste, and not a new ruling class, because its political control did not also extend to economic ownership. The theory that the Soviet Union was a degenerated workers' state is closely connected to Trotsky's call for a political revolution in the USSR, as well as Trotsky's call for defense of the USSR against capitalist restoration. Trotsky summarized the more optimistic arguments within the International Left Opposition thus: Trotsky always emphasised that the degenerated workers' state was not a new form of society, but a transitional phase between capitalism and socialism that would inevitably collapse into one form or the other. He argued however that whether this downfall led to the restoration of workers' democracy or to capitalist restoration would depend on whether the movement to overthrow the dictatorship of the bureaucracy was led by the organised working class:
"Degenerated" vs. "deformed"
The term "degenerated workers' state" commonly refers only to the Soviet Union. Trotskyists of the Fourth International coined the term "deformed workers' state" to describe states based upon collectivised means of production, but in which the working class never held direct political power. The two terms therefore label similar phenomena in that they both refer to states where the bourgeoisie no longer holds power, where the means of production has been socialised and where an unaccountable bureaucratic elite holds the political reins. They differ in the history of how their situation has arisen: through the bureaucratic degeneration of a genuine workers' democracy, as in the Soviet Union; or through the establishment of a deformed workers' state resulting from the overthrow of bourgeois rule and ownership by some force other than the mass action of the organised working class, such as by an invasion, a guerrilla army, or a military coup.
Critics
Besides the supporters of the Soviet Union holding the belief that the state was a healthy workers' state, the theory has been criticised from within the Trotskyist movement, and by other socialists critical of the Soviet Union. Among the disputed issues are the relationships between a workers' state, and a planned economy. Some authorities tend to equate the two concepts, while others draw sharp distinctions between them. Among Trotskyists, alternative but similar theories include state capitalism and bureaucratic collectivism.
