Shackman was very interested in politics and as a teenager joined the Socialist Party of America. The right-wing leadership of the party opposed the Russian Revolution. However, those members who disagreed with this policy formed the Communist Propaganda League.
In February 1919, Jay Lovestone, Bertram Wolfe, Louis Fraina, John Reed and Benjamin Gitlow created a left-wing faction that advocated the policies of the Bolsheviks in Russia. On 24th May 1919 the leadership expelled 20,000 members who supported this faction. The process continued and by the beginning of July two-thirds of the party had been suspended or expelled.
In September 1919, Jay Lovestone, Earl Browder, John Reed, James Cannon, Bertram Wolfe, William Bross Lloyd, Benjamin Gitlow, Charles Ruthenberg, William Dunne, Elizabeth Gurley Flynn, Louis Fraina, Ella Reeve Bloor, Rose Pastor Stokes, Claude McKay, Martin Abern, Michael Gold and Robert Minor, decided to form the Communist Party of the United States. Within a few weeks it had 60,000 members whereas the Socialist Party of America had only 40,000.
Initially, the American Communist Party was divided into two factions. One group that included Charles Ruthenberg, Jay Lovestone, Bertram Wolfe and Benjamin Gitlow, favoured a strategy of class warfare. Another group, led by William Z. Foster, William Dunne and James Cannon, believed that their efforts should concentrate on building a radicalised American Federation of Labor. Shackman associated with the group led by Foster.
Shackman contributed to the party journal, The Young Worker. As the editor of The Labor Defender he joined with others such as William Z. Foster, Edna St Vincent Millay, John Dos Passos, Upton Sinclair, Dorothy Parker, Ben Shahn, Floyd Dell in the campaign against the proposed execution of Nicola Sacco and Bartolomeo Vanzetti.
James Cannon, the first chairman of the American Communist Party, attended the Sixth Congress of the Comintern in 1928. While in the Soviet Union he was given a document written by Leon Trotsky on the rule of Joseph Stalin. Convinced by what he read, when he returned to the United States he criticized the Soviet government. As a result of his actions, Cannon and his followers, including Shactman, were expelled from the party.
Shachtman, James Cannon and Martin Abern now joined with other Trotskyists to form the Communist League of America (CLA). The party also published the journal, The Militant. In July 1933, Shactman moved to France to live with Leon Trotsky and over the next few months worked as his secretary. In 1934 Shackman joined forces with Farrell Dobbs to publish The Organizer, a newspaper created to support the Minneapolis Teamster Strike.
In 1934 the party merged with the American Workers Party, to form the Workers Party of the United States, under the joint leadership of Abraham Muste and James Cannon. The party was dissolved in 1936 when it was decided that members should join the successful Socialist Party of America. During this period Shackman edited the New International, wrote a book on the Great Purge entitled, Behind the Moscow Trial (1936) and translated Leon Trotsky's The Stalin School of Falsification (1937).
Norman Thomas, the leader of the Socialist Party of America, decided to expel the Trotskyists in 1937. Shachtman and James Cannon now decided to form the Socialist Workers Party (SWP). In March 1938, Shachtman and Cannon were part of a delegation sent to Mexico City to discuss the draft Transitional Program of the Fourth International with Leon Trotsky.
Shachtman became disillusioned with the Soviet Union when it signed the Soviet-Nazi Pact. These feelings were intensified when the Red Army invaded Poland (September, 1939) and Finland (November 1939). James Cannon continued to support the foreign policy of Joseph Stalin. Cannon, like Leon Trotsky, believed that the Soviet Union was "degenerated workers' state", whereas Shachtman argued that Stalin was developing an imperialist policy in Eastern Europe. Shachtman decided to leave the Socialist Workers Party and establish his own Workers Party. Other members included Martin Abern, C.L.R. James, Hal Draper, Joseph Carter, Julius Jacobson and Irving Howe.
Max Shachtman continued as editor of New International during the Second World War and in 1943 he predicted that the Red Army would impose Stalinism in Eastern Europe. In 1949 the Workers Party became the Independent Socialist League (ISL).
In 1962, Shachtman published The Bureaucratic Revolution: The Rise of the Stalinist States. In the book he argued that capitalism and Stalinism to be equal impediments to socialism. In 1958, the ISL dissolved so that its members could join the Socialist Party of America. Shachtman also believed that socialists should try to move the Democratic Party to the left from within. Shachtman also worked closely with Bayard Rustin and the Civil Rights Movement.
Shachtman's anti-communism moved him to the right and upset fellow members by refusing to condemn the Bay of Pigs invasion of Cuba and his unwillingness to call for US armed forces to leave Vietnam. This alienated former supporters such as Walter Reuther and Michael Harrington. When George McGovern became the Democratic Party candidate in 1972 on an anti-war manifesto, Shachtman refused to endorse him.
Max Shachtman died on 4th November 1972.