The theory of the USSR as a form of state capitalism has a long history. But as a key element of the SWP analysis of the old USSR the issue remains important (Socialist Review, November 2009).
The USSR was in competition with the great capitalist powers. But internally Western capitalism and Soviet societies did not exploit workers in the same fashion. The Soviets educated their populations, provided free health services and looked after vulnerable members of their societies. Never an ideal world, but the exploitation simplicities of the state capitalist argument don't hold water.
If you examine a capitalist society at a roughly similar level of economic development, the Soviets did well by their people.