Character Of The Soviet Economy Today I
Moni Guha
1S the Soviet Union still a socialist country? Or is she really reverting to capitalism? "These questions are raised not only in the capitalist press but also by people who honestly consider themselves communists by conviction and once loved the Soviet Union almost religiously. A sizeable portion of these people say that although 'the present leaders of the USSR are revisionists, the social system there has not undergone any structural change for which it can be called capitalist. Some people say, a socialist society. particularly a classless socialist society like the Soviet Union, cannot revert to capitalism from inside peacefully and gradually as this contradicts the very law of social development. Again, some other people say that a 'capitalist type of superstructure' can develop on a socialist structure. (Joan Robinson etc.). Some others altogether deny the fact o[ emergence of a classless society in the transitional period to justify the restoration of capitalism from inside peacefully and gradually.
Of course, all the e arguments are somewhat partial and one-sided and as such are somewhat mechanical, not dialectical. Emergence of a class-less society is the result of a single process of socialist construction. Classless society does not and cannot emerge suddenly, overnight, not through any other independent process, In the Soviet' society the
exploiting classes were disorganised and disarrayed economically, politically, socially and organisationally and there remained only elements, not classes. The disorganised and disarrayed elements had no chance of 'reconsolidating themselves as a class. Undoubtedly, the division between mental and physical labour, the difference between the city and village, the difference between workers and peasants and industry and agriculture remained and hence remained the class instincts and habits as well as class desires. But the base upon which these instincts, habits and desires take material shape no longer existed. These habits etc were the superstructural weaknesses of the classIess society in its initial period as the "birth marks" of the capitalist society from whose womb it had just emerged.
Besides these, there were, of course, weaknesses in the structure itself also. The complete invalidation of commodity-money relation could not be effected in Soviet society and as such the operation of the capitalist law of value, however subordinated, was an objective impediment to smooth socialist sailing. In a socialist society commodity-money relations and the operation of the capitalist law of value are double-edged weapons. It can be used and utilised in favour of socialism, provided here is the will and correct proletarian leadership of the dictatorship of the proletariat. Again, it can be used and utilised in favour of restoration of capitalism if the leadership wishes so. The disorganised and disarrayed elements of the exploiting classes may take and naturally do take advantage of each and every, wrong step of the dictatorship of the proletariat and may reconsolidate themselves first as a group and then, if opportunities permit, as a class. "This, above all, concerns such economic factors as group or collective form of property and commodity circulation ... it would be unpardonable blunder not to see at the same time that these factors are already beginning 'to hamper the powerful development of our productive forces," said Stain in his last book, Economic Problems of Socialism in the USSR. Thus the emergence of a classless society with weaknesses in the structure and superstructure does not preclude the possibility of re-emergence of classes.
More, when uneven development is the absolute law of capitalist imperialism and socialism in one country is a living fact, international trade and commodity market remain a such even if the commodity-market relations are completely done away with in the internal relationship of a socialist country. In that case also, it is a question of suitable policies by the leadership of the proletarian dictatorship so that the capitalist law of 'value' of the international market may not, in any way, influence the internal life and relation of the socialist society.
In Stalin's time internal 'prices remained isolated from the world market and the nominal gold value of the rouble had little relation to internal prices and a barrier was erected between the domestic and world prices as well as between the money serving the home market and that used in foreign trade transactions. This policy of Stalin's time has been abandoned by the present leaders of the Soviet Union and they have tied up the internal price policy with the movement of world price. In Stalin's time, foreign trade, though pushed vigorously, was not allowed to defend the economic development of the Soviet Union on the world market as is being done: now.
The social laws act almost in a way like those of natural laws. One can divert them, restrict their sphere of operation, use and utilise them in our favour but cannot invalidate their operation so long as their material bases, their social roots are there. The commodity-market relations, internal and / or external, are the material, objective basis of the operation of the capitalist law of value in socialist society. The superstructure which still carries the "birth marks" and the old habits is the subjective factor. Besides, thought and consciousness always lag far behind material development. So the "factors" of which Stalin spoke may raise and do raise their head with 'all their ,fangs at the weakest moment of the policy of the proletarian dictatorship independently of the wishes of the people and the policy-makers.
With this background, the changes in the Soviet economy since 1953 will be discussed in this paper. The paper will confine itself to the internal changes only and will not discus international trade, finance, aid joint exploitation of labour and resources.
Socialist Man
At the 22nd Congress of the" CPSU, Khruschev in his Report of the C.C. CPSU, said, "Our home. land has entered the period of full scale construction of communism along ,the entire broad front of giant undertakings", and in the same reoport elsewhere he said, "It is important that the growth of public funds properly combined with the principle of material incentives". Four years after his report and after the 1965 March and September plenary meetings of the CPSU an editorial in Pravda, On January 14, ]966 said: "The economic changes signify: -
"Creation of necessary conditions for more consistent application of the socialist principles of providing material incentives in production in combination with moral stimuli to work."
The two quotations signify that full-scale construction of communism begins with the application of material incentives and material incentive is the chief motive force for full-scale construction of communism. These have been said and done in the name of "socialist principle" and in the name of Lenin
and Leninism. What did Lenin say about material incentive vis-a-vis communism? "Communism begins when the rank and file workers begin to display a self-sacrificing- concern, .. which do not accrue to the workers personally or to the close 'kin'; but to their 'distant' kith and kin i.e to the society as a whole, to tens and hundreds of millions of people united first in one socialist state and then in a union of Soviet Republics". Further, "communist
labour in the narrower and stricter sense of the term is labour performed in gratis for the benefit of the society, labour performed not as a duty, not for the purpose of obtaining right to a certain product ,not according to the previously established and legally -fixed rates, but voluntary labour irrespective of rates, labour performed without expectation of reward, labour performed out of a habit of working for common good and out of a conscious realisation (because of habit) of the necessity for the common good-labour as the requirement of healthy organism," (The Great Beginning).
The present Soviet leaders are therefore violating the theory and practice of socialist man conceived by Lenin. They are upholding and practising the theory of Economic man of Adam Smith. The economic man, naturally, cannot build even socialism, let alone communism. The economic man can only build private property instincts, self-interest, personal gains etc. Blaming and criticising Stalin and Stalin's discouragement of material incentives and encouragement of social consciousness Khrushchev said, "Disdaining the material needs of workers and emphasizing mainly enthusiasm and social consciousness. Social and moral forms of incentive and rewards, he hampered the development of production and of raising living standards of the workers. This had negative results in the internal politics and international
politics." The Pravda editorial referred to earlier, wrote, "It is not the aim of the communists to bring happiness to the coming generation by subjecting the present generation to ascetic self-denial (obviously hinting at China). They call for preparing a
better future for the succeeding generation and at,the same time do everything to make life happier and better for contemporaries." While Lenin advocated self-sacrifice and labour in gratis, the present Soviet leaders jeer at Lenin by calling it "ascetic self-denial".
Bourgeois economists and sociologists in general and Adam Smith in particular said that it is the inherent nature of 'man to give some- thing only in exchange for getting something more beneficial. That is why every man is Economic Man with self-interest and preservation of self-first. Lenin in the same book referred to above said, "We shall solemnly and firmly pledge ourselves to one another to make every sacrifice, to hold out and win in this arduous struggle against forces of habit -to work without relaxation for years and decades. We shall work to eradicate the accursed rule, 'Every man for himself and good for us all, to eradicate the habit of regarding work only as duty and of regarding as legitimate such work as is paid for at certain rates. We shall work to inculcate in peoples mind, to convert into a habit, to induce in the daily life of the masses the rule: 'all far each and each for all', the rule 'from each according to his ability to each according to his needs', gradually but Steadily to introduce communist discipline and communist labour."
This was on May 2, 1920. To-day the present leaders of the Soviet Union, blaming Stalin for treading the path charted by Lenin, reintroduce in Soviet life "Every man for himself and good for us all".
One can easily conceive, without going deep into the economics of the Soviet society, what kind of society the present leaders of the Soviet Union are building-communism or capitalism.
Materialist :Conception
"In political economy the I pro. duction relations of socialism were for a long time considered quite abstractly as relations between the individual members of socialist society and society as a whole. But actually, the relations of man with society are least of all direct when man acts a producer. Man enters into direct relations with. Society more frequently not when he acts as producer, but when he act as a member of society, receiving remuneration or benefit from public funds, participating in social life etc. When man acts as producer he primarily comes in contact directly with the enterprise and only through the enterprise with society. In political economy little attention was paid to these concrete forms of production relations-the relations between enterprise and the State, and between enterprises and their personal. The starting point for improving the entire system of incentives is to improve relations between the enterprises and the society as a whole."
These apparent innocent lines are from an article "New elements in economic incentives" by one B. Sukharevsky, published in Voprasy Ekanomiki, no. 10, 1965, and reproduced in Soviet Economic Reform Main features and aim, published by Novosti Pres Agency' Publishing House, Moscow. If the bagatellian seniences are paraphrased it comes to: (a) Man's relation is not determined by the system of production but by the system of distribution; (b) Man's direct relation with man is the enterprise where he works, so not the society but the enterprise is the basic unit, the improvement of which is basic to man, which will indirectly improve the society; (c) So long political economy failed to discover this concrete relation, now it has been "discovered" by the Soviet economists and sociologists and such a system of incentives must be enterprise-wise.
The entire thing is against the materialist conception of history enunciated by Marx, Engels and Lenin. One need not go through
the chapter on Co-operation in Vol. I of Capital in order to understand the anti-Marxian stand of the above quotation. Marx, in criticising the Gotha programme, said, "Quite apart from the analysis so far given it was in general a mistake to make. a fuss about so-called distribution (italics by Marx) and put the principal stress on it". "In production", Marx said, "men not only act on nature but also on one another. They produce only by co-operating in a certain way and mutually, ex- changing their activities. In order to produce, they enter into definite connections, and relations with one another and only with this social connection and relations doe their action on nature, does production take place." (Karl Marx and F. Engels, Selected Works, Vol.l). Man is a social being and he establishes social relations. At different times, these operate in different concrete ways. These concrete ways are the manifestation or different mode of production. As such concrete ways are neither primary nor principal. But to the present economists and sociologists this concrete way is the principal determining factor of social relationship against which Marx warned not to "make fuss". Once relation between man and man was direct and that is the true relation built through the process or production. In course of time various kinds of walls emerged, among which money became the predominant one. Relation between man and man became mystified and began to be expressed through money. through exchange. Money became the cash nexus of society. As people create idol with straw and clay and paint them with proper colour, and then worship them as God. though they are his creation, money, though created by man to meet his social needs become the master. Marx called this fetishism. It is the task of the materialists to clear the mists and the wall that has been created between man and man and re-establish the true direct relations of the social beings and do away with the fetishes, and make man master. Here lies the significance of the discovery of the law of materialist conception of history. But the soviet economists and sociologists, discarding this important and significant side of the materialist conception of history, are reintroducing the idealist conception and historical idealism and creating more mists between the social relations of man advocating enterprise as the basic unit of social relation from where man gets remuneration.
Why was this unique "discovery" in political economy needed? 'Why did the Soviet economists suddenly discover that "in political economy little attention was paid to these concrete forms of production relations"? It was promoted by the urge to restorate capitalism step by step in the Soviet society; first by introducing enterprise-wise ownership. The Soviet economists and the Soviet economic reforms have tied the remuneration, bonus etc. of the workers and directors of an enterprise to profit. In doing so they had to discard Marxism and introduce and "discover" a new theory. In a socialist society social profit or socialist accumulation is quite a natural thing and nobody has any reason to object to it. But, if the earning by individuals of more income through an enterprise is linked with profit, if enterprise is made the basic unit of earning more income, it no longer represents socialist accumulation or social profit. It invariably gives rise to competition between the enterprise, a capitalist urge to earn more at the cost of other and simultaneously it widens the inequality of income and standard of living and leads to revival of cIasses in society.
Capitalist Law of Value
To have a clear and scientific understanding of the real character of a socialist society, it is' imperative to study and investigate firstly the operation of the capitalist law of value there; secondly, whether the sphere of operation of the capitalist law of value is gradually narrowing down and is in the process of eventual invalidation or gradually widening its sphere and is in the process of eventual reassertion; thirdly, whether the capitalist law of value has again become the regulator of production which had ceased to be the regulator in Stalin's time; and fourthly, what is the attitude of the present leaders of the Soviet Union towards the operation of the law of value in a socialist society--is it contradictory and an impediment to the planned socialist economy or supplementary and necessary instrument for the operation of the law of planned socialist economy?
The last point will be discussed first. It is an undeniable fact that the building up of a socialist society is a long-drawn process. After a socialist revolution, the country concerned naturally inherit non-Socialist sectors, in spite of seizing the commanding heights over the vital and key industries, commerce and finance. These non-socialist sectors operate in accordance with their appropriate objective laws. As these take place under the general regulation and control of the commanding heights of "the economy of the socialist sector, they can neither dominate nor regulate the national economy as a whole. The dictatorship of the proletariat by its economic as well as political power gradually weakens it in order to invalidate eventually the non-socialist sectors and bring the whole national economy ultimately under socialist planning. This is the task practically of the whole of the transition period. As such, throughout this period, though the capitalist law of value operates together with the law of planned socialist economy, it does so in a very restricted sphere and under the general regulation of planned socialist economy. The laws of movement of the commodity- money economy and the laws of movement of planned socialist economy are both objective laws. Consequently, the law of planned socialist economy are affected by the movement of the laws of the non-socialist sectors to the extent of their existence and influence.
It is clear that socialist planning and uninterrupted forward movement of the law of socialist economy are not compatible with the operation of the capitalist law of value. But compatible or not, it will go on operating so long as non-socialist sectors remain, so long commodity- money relation remain. So the quarrel is not over the operation of the capitalist law of value in a socialist society in the transition period, but over the question of its mode of operation and regulation and also over the question of adoption or non-adoption of effective measures to curb, restrict and eventually eliminate the non-socialist sectors and commodity-money relations, thereby invalidating the operation of the capitalist law of value altogether from the social life.
Stalin, in his Economic Problems of Socialism in the USSR said, "Comrade Saninas and Vanzhers basic error lies in the fact that they do not understand that the role and significance of commodity circulation is incompatible with the prospective transition from socialism to communism. They evidently think that the transition from socialism to communism is possible even with commodity circulation, that commodity circulation can be no obstacle to this." Stalin, then advising the introduction of a "products-exchange system" with the collective farms further said, "Such a system, by contracting the commodity circulation, will facilitate the transition from Socialism to communism," and will "preclude the conversion of product into commodities and with it, their conversion in to value."
That the operation of the capitalist law of value is incompatible with the operation of the law of planned socialist economy is neither recognised nor accepted by the present leaders of the Soviet Union and here lies the root of their fundamental departure and desertion from the path of building socialism and advancing towards communism. Here lies the basic point of division between the communists and revisionists as the question of building socialism is not an academic one. The Soviet leaders do not take any practical measures economic and administrative to weaken, curb and ultimately eliminate the basis of operation of the capitalist law of value. Nobody objects to the utilisation of commodity-money relation, so long it is a compelling necessity, but to speak of such relations as a necessary instrument of socialist society is not only going too far, but a definite surrender to a capitalist instrument.
'With the recognition of the capitalist law of value as a necessary law of the socialist society, the present Soviet leaders have taken measures since 1953 by which they have extended the spheres of its operation enormously. They not only advocate and practise the capitalist law of value as a necessary instrument in socialist society, but also say that instead of being an impediment, it "supplements" the law of planned socialist economy; in Fundamentals of Marxism-Leninism they write manual meant for the world Marxist-Leninists, they write "But how is socialist planning compatible with the law of value since the former depend on another law, the law of planned proportional development?
"Experience shows that it is perfectly passible for the two laws to operate together, because they do not contradict but supplement each other."
"With this unique theory of "experience shows," Leontiev- the erstwhile reputed Marxist economist, writes in an article in New Times'. (No. 12, December 1967), "Practice which is the best criterion of truth has debunked the theory of the 'rudimentary' nature, role and place of CMR [commodity-money relations] in a socialist economy." Further. with the development of the socialist system and perfecting of its production relation, CMR far from vanishing play a substantial part as one of the economic instruments of socialist planning.
True, the law of value operate together with the law of planned socialist economy during the transition period. Also, capitalism exists together with socialism due to the operation of the absolute law of uneven development of capitalist imperialism. But do these mean "perfect" relation, non-antagonistic relations? Do they mean that one is necessary for the existence and development of the other, that one supplements the other?
The present Soviet leader with their revisionist attitude and practice have brought some significant changes in the Soviet economy in the name of economic reform as a result of which basic structural changes in production relations have occurred. The Soviet economists also could not conceal this fact. One economist says. "The measures discussed in the September plenary meeting
[1965] are quite different from all those past measures. These measures will not only influence the structure but will also bring basic changes in the sphere of economic relations." (Soviet Economic reform).
All this reminds one of what Lenin said in explaining the causes of degeneration of the German Social Democratic Party- one-time leader of the international working class movement - The party of Marx and Engels. "The general public know that German Social Democracy is regarded as a model of 'Marxist proletarian policy and tactics, but they do not know what constant war fare the founders of Marxism had to wage against the 'Right Wing' (En gels' expression) of the party. And it is no accident that soon after Engel's death this concealed war became an open one. This was an inevitable result' of the decades of historical development 0f German Social Democracy." (Lenin- on Britain). Exactly the same thing can be said of the CPSU. If anybody carefully follows the history of the "concealed war" of the 'Right Wing' of the CPSU, especially from the period of introduction of collectivisation and five-year plan to the three important "warfare's", one with Varga in 1947-48, the second on the problems of science and philosophy and the last one on the economic problems of socialism and other relevant questions of 'War. peace, co- existence international politics, etc. it would not be difficult to find out the causes of the inevitable result of the decade of historical development of the CPSU immediately after the death of Stalin. who to his last day was a continuer and developer of Marxism-Leninism.
(To be concluded)
Character Of the Soviet Economy Today-II
Moni Guha
What were me major changes in the Soviet economy by which the present leader consciously and deliberately extended thespheres of commodity-money market and made the capitalist law of value virtually the regulator of production and fthus reverted to capitalism?
(a) The kitchen garden plots; The Soviet peasant, irrespective of State farm and collective farm peasant own a private plot of land for family use, where they raise various sorts of vegetables and even food grains. This is called kitchen garden plot. Beside this plot, they are allowed to rear a definite number of live stock for dome lie use. The Soviet peasant used sell the "surplus product" of the kitchen garden as well as egg, milk, meat etc. on the "free market". Immediately after the termination of the Second World War these free and private markets grew in dangerous proportion throughout the Soviet Union. The free commodity market and the private property instincts of the peasants began to exert a tremendous baneful influence on Soviet society, both politically and economically. On the e anarchic capitalist law of value began t0 assert its law of dislocation on socialist planning and price policy and on the other private property instincts began to damage the idea of socialist man. The Soviet Government under Stalin imposed an extra tax on the marketable "surplus" of the peasants, cut down the size of the kitchen garden plots and number of livestock. By another decree the Soviet Government introduced payment in kind on team work unit basis in order to curb the commodity market and develop the collective sense of the collective farmers. But after Stalin, Khrushchev "won" the peasant by playing on their private property instincts with his measures and "reform" to stimulate development of capitalism In the country-side: abolition of the extra tax, enlargement of the size of the private plots, abolition of restrictions whatever on Livestock ; abolition of work-units and system of payment in kind and introduction of individual hours of work and payment in cash; exemption of more farm products from price control and allowing the farmers to sell on private markets; introduction of about 3500 free markets replacing the State stores etc.
Together with these measures, the nationalised land were distributed to the highest bidder team who gave assurance~ of fulfilling a fixed quota of production. The State Bank gave them long-term loans to promote increase of production and number of livestock. As a result, 55 per cent of the national income began to come from private plots and only 45 per cent from the collective and State farms. In other words, more than half of the Soviet 11nion's total income was being derived from agriculture capitalistically. The theory of "Enrich yourself and thereby enrich the country" of Bukharin was resurrected. Why were these measures taken? In order "to achieve a steep rise in production" was the reply. The same question had been posed during the introduction of the First Five Year Plan by the Right deviationist Bukharinite group. Stalin, in reply had said, "Is it true that the central idea of the five-year plan in the Soviet country is to increase the productivity of labour? No, it is not true. It is not just any kind of increase in the productivity of the labour of the people that we need. What we need is specific increase in the productivity of the labour of the people, namely, an increase that will guarantee the systematic supremacy of the socialist sectors of the national economy over the capitalist sector. A five-year plan which overlooks this central idea is not a five-year plan, but a five-year rubbish." (Stalin, Vol. 10). This is what is called class outlook, this is what I called politics in command.
By introducing the new measures, the present Soviet leaders have added grist to the private property instinct. This has gone on uninterruptedly with the increasing extension of the commodity market. The capitalist law of value has become almost supreme in the countryside, in agriculture and in the exchange of agricultural products through markets.
(b) Sale of Machine Tractor Stations (MTS) (---Formerly in the Soviet Union, the instruments of production were not commodities and these could not be and did not come under the sphere of operation of the law of value. Means of production are the most vital thing in society, since through their private ownership exploitation has so long taken place. The socialist revolution made the means of production socialised property and thus laid down the basis of the end of exploitation. Hence the means of production were neither old to the individual enterprises nor to the collective farm. As agents of the Soviet Socialist State the directors of the State enterprises received the machine for use in factories and the Machine Tractor Stations (MTS) were simply transferred to the collective farms, retaining the State ownership. The products of the collective farms were procured in exchange for service rendered by the MTS to the collective farms.
Hence these did not and could not become capitalist commodities. But in 1953, immediately after Stalin's death, together with the changes enumerated above, the Soviet Government sold the entire MTS to the collective farms and made them the owners of the mean of production in one of the vital sectors of the national economy, departing from the very principle and practice of socialised ownership of the means of production. It may be noted here that all the collective farms could not afford to buy the MTS as their financial resource were not adequate. So, these were sold only to those collective farms which were in a position to pay the price, thereby leaving the poorer farms under the mercy of the richer farms. This measure laid the material basis of class differentiation of rich and poor peasant51 and exploitation of ·the poorer by the rich along capitalist lines, with a capitalist market and speculation etc. The consequence can easily be conceived. Since then, as and when these tractors, combines, harvesters etc. are required, the richer collective farms purchase them outright and become owners and the poorer farms hire them from the owners. The Soviet factories also produce these machine with a view to selling them on the internal market, which means that the factories are also more or less guided by the market law. The Soviet Government did not and could not stop there, as the very logic of the sale of MTS to the "effective buyer" forced it to introduce other concomitant measures. It also permitted some of the "financially sound" big collective farms to build up factories for production and sale of accessories, spare parts and other small agricultural tools, thus widening the class differentiation in the countryside. The poorer collective farms were not only forced to hire tractors, combines etc. from the big collective farms; but also, to "adjust" the price of their produce as per their dictate.
Arguments
The present Soviet leader, in defence of these measures, say that since collective farms are collective property, not private property, and since the land an important mean of production, cannot be sold or bought at all, it is no longer a commodity. They further say, "Socialist commodity' production is a commodity production without private ownership, without capitalists and without small commodity producers." (Fundamentals of Marxism-Leninism). Of course, it can be shown that now a-days capitalist commodity production is also commodity production without private ownership without capitalists and without small commodity producers. But that is not the point of discussion here. The revisionists, surprisingly enough, baptised the commodity as "socialist commodity"! Apart' from that, they speak only of land which is nationalised, but not of other means of production in large-scale mechanised agriculture, that is the machines. In mechanised large-scale agriculture land is but only one of the means of production. What about the other? Can it be bought or sold? The same arguments are advanced by the capitalists by saying that co-operatives are not privately owned. But the question is: Are the collective farms socialised property? The answer is no. Is then collective farm property private property? Again, the answer is no. The collective farms under the political and economic management and control of a capitalist' state is a specific type of economy which comes under the capitalist sector and can be called capitalist.! economy. Again, the collective farms under the political and economic management and control of the dictatorship of the proletariat are a special type of economy, on the basis of a special alliance with the peasantry, which can be called one of the rudimentary forms of socialist economy of the socialist sector. Lenin in his pamphlet On Co-operation long ago said, "under our present system, co-operative enterprises differ from private capitalist enterprises because they are collective enterprises, but they do not differ from socialist enterprises if the land on which they are situated and the means of production belong to the State. that is to the working class." A considerable portion of the nationalised land has already been distributed to the highest bidders' team and the means of production no longer "belong to the State", working class or otherwise. As such, collective farms can no longer be considered a form of socialist economy, rudimentary or developed.
Bhowani Sen, the late revisionist leader, coming back from a Moscow tour at the time when MTS were being sold to the collective farms, wrote in Swadhinata that this selling was an act of "silent revolution". Indeed, it was a silen.t revolution in the double sense. It was 'silent' because its far-fetched economic, social and political significance was not immediately perceptible to the Soviet and world working class. It was a 'revolution' because it brought about qualitative structural changes in the socialist system. though in a reverse process.
'What was the effect of these measures?' The collective farm became the owner of the means of agricultural production like in all other capitalist countries, as well as owner of products. The mutual help in supplying the MTS and in procuring the product did no longer work. It has now become a question of pure selling and buying between two independent owners, in a purely capitalist method through the commodity-money market. The initiative of bargaining and manipulation of price mechanism are transferred to the hands of powerful collective farms from the hand of the State. The special form of alliance between the peasantry and the working class no longer exists. The poorer farm have become the victims of the State and big collective farm speculators. The Soviet theoreticians now say that "one of the chief measures introduced in, the Soviet Union during the last few years in order to achieve steep rise in agriculture, was the change over from State procurement of collective farm produce to purchase at price permitting collective farms to replace their outlay incurred in the production of agricultural produce As fully possible and also to build up the necessary reserve." (Fundamentals of Marxism-Leninism). This is purely a capitalist solution for the agrarian problem not withstanding their character about socialism, the building up of necessary reserve" by the big collective-farm speculators could not prevent the Soviet society from near-famine conditions as the reserve are being used by the collective farms for speculative price. Asa result, the Soviet State has been compelled to take the capitalist measures of curbing the price of food grains and guaranteeing the supply by building up its own reserve stock through import from America avoiding the road of direct procurement from the peasants which may antagonise them.
(c) Libermanism and its effects: - The logic of market economy cannot top half-way. The introduction of group owner hip of property in agriculture led the Soviet society to introduce group owner ship in 'industrial enterprises also. Beside the sale of MTS to the collective farms, all the means of production in Soviet society have become, for all practical purposes, of saleable commodities with the introduction of new economic reforms in 1965. Formerly, machines were simply delivered to different enterprises and no charges were made for using the machines. Only a system of book-keeping was maintained to know whether the enterprises were running at a loss or were paying with a view to subsidising the "looing concern'" from the State budget and replenishing the amount of subsidy from the paying concerns' exactly like that of a family. The enterprises were collective, socialised property and hence collective, socialised tasks were given to each enterprise, irrespective of "loss" or "profit" according to the priority of importance in the national economy as a whole. This is what was rightly called socialist principles of planning. But after the introduction of new economic reforms the mean of production are no longer simply delivered, but' sold at their price to the directors of the enterprises. The Soviet theoreticians say, "Unlike enterprises subsidised by the State budget those run on cost accounting lines conduct independently their economic operations. They have the necessary" material and financial resources at their deposal and in applying them, the}' can u e their own initiative to a large extent. Cost accounting means that the expenditure incurred by each enterprise, by each economic organisation has to be replaced by its own income, and that moreover, the enterprise must show a profit. Part of the profit is allocated to the enterprise's fund and used to satisfy the needs of its employees.Cost accounting is an inducement to Strive for profitability and this is only possible if the outlay of labour, material and money is kept as low as possible.
"The operation of the law of value makes it possible to compare and correctly appraise the result of economic activity of separate enterprise and it supplies economic incentive both to the enterprises as a whole and to worker to achieve high results." (Fundamentals of Marxism-Leninism).
Economic Man Again
This means firstly, ,the abandonment of the very principle of socialist planning based on socialised appropriation, leaving the in initiative to each enterprise to accrue profit and income individually and separately. Secondly, it means that the re-introduction of the principle and practice of "Economic plan" of bourgeois society and enterprises as the basic unit pushing society as a whole to the background. Thirdly, it means the re-introduction of money as an independent variable, whereas in Stalin's time money 'was treated as a mere counter. These are all capitalist measures.
"Expenditure incurred by each enterprise ... has to be replaced by its' own income." This may have utilitarian value but not an iota of socialist value will be found in it. How is the expenditure to be replaced by its own income? "This is only possible if the outlay of labour, material and money is' kept as low as possible." Directors are not in a position to lower the cost or price of raw materials as they can only keep the outlay of money as low as possible if they are allowed to lower the purchase price of labour power i.e., if fixation of wages is kept outside the domain of central planning, if directors are allowed to bid up wages freely. Secondly, if the directors are allowed to choose freely the commodity to be produced and if this too is kept outside the domain of Central control and planning one logically lead to the other. If you are asked to lower the cost of production and forbidden to choose your path of lowering the cost of production, you can at best forego your wages. But foregoing of wage is an "ascetic self-denial" to the present Soviet Society. So, there is no alterlla1tive but to allow the directors to freely bid up wages and select the commodity of production. But if the enterprise are free to bid up wages and manipulate the market price by independent choice of production of diverse commodities, what remain of the authority which the central planners must have in a socialist society? In capitalist countries also economic programming is a must, which they call planning. This economic programming does not and cannot interfere with the independent choice of production or free bidding up of wages as each and every capitalist is an emperor in his factory. The capitalist state makes a blueprint of general directive of production, general directives of minimum wages etc. etc. and they call this planning. The new economic reform in the Soviet Union also could not stop half-way only by asking the directors of enterprises to keep as low as possible the outlay of labour, material and money. It had to give the directors capitalist rights and freedom, i.e. free bidding up of wages and freedom to choose the commodity of production. In explaining the economic reforms B· Rakitsky says that the plenary meeting (September 1965) in its application of economic reform, has decided to abandon the system of central directives towards wage fixation in the enterprises. "The Soviet economist believe that an important subject like the total payroll could be kept outside the central planning in future. They also believe that the production of diverse commoditise could be brought outside the central planning in course of time." (Soviet Economic Reform).
As is known, it is not possible to calculate hours of work in each. Case representing the same quantity of "abstract" or socially necessary labour and thus, the wage, accordingly cannot be calculated on the basis of number of hours worked alone. So wages are determined, even in capitalist society, by average subsistence level. In a socialist country and for that, in the Soviet Union, formerly, wage were not considered as the purchase price of labour power, the value of which is equivalent to subsistence cost. Wages, there, represented a conscious allocation of total social production and had no relation, to value or subsistence. Why was this so? Because "within the co-operative society", said Marx "based on the common ownership of the mean of production the producers do not exchange their products, just as little of the product appear here at the value of these products, has a material quality possessed by them, since now, in contrast to capitalist society, individual labour no longer exists in an indirect fashion, but directly as a component part of the total labour." (Capital, Vol. II). The Soviet society consciously used to raise the wages of workers in those factories which were, in fact, below the subsistence level, despite "loss" incurred there, as loss or profit were then considered social loss or profit and not loss or profit of a particular enterprise. Allocation of wages was thus related to the production of total social product.
The principle of allocation of wages i.e.. the socialist principle of the total social product, has now been thrown over-board. The Russians have "discovered" the long-neglected law in political economy (quoted earlier) in order to justify enterprise-wise labour. Now labour is seen neither as a direct component part of the total social labour nor the product as the component part of the total social produce. The Producers in Soviet society now as individual workers, sell their labour power and the directors of the enterprise purchase it. The chief factor in the determination of the skill of workers and director, therefore, is the total volume of income of a particular enterprise. The socialist principle of socialised appropriation has been replaced by the capitalist principle of enterprise-wise appropriation. In capitalist society labour power is a commodity sold by its owners for money-wage equivalent to its value, that is labour embodied in the goods needed for its existence. Each individual owner of factory tries to keep the wages below the subsistence level to reduce the cost of production in order to compete on the market. The Soviet enterprises now also try to keep the wages below the subsistence level to reduce, the cost of production in order to compete on the market exactly like those of capitalist countries. Liberman, the father theoretician of economic reform, says, "We must see to it that enterprises themselves strive to get orders because the best utilisation of productive assets will become fully advantageous for each enterprise. It may be reasonably assumed that 'competition between enterprises will arise in getting orders, based on a comparison of quality guarantees offered, as well as delivery dates and prices of goods under the new orders." (Soviet Economic Reform). It means each enterprise will bargain and settle prices separately and independently on the competitive market and in order to secure orders, apart from corruption, the directors will strive to lower the cost of production, ultimately by lowering the wage of the workers, while ensuring the quality. It means lowering of wages' as well· as intensification of labour. It is a double exploitation.
In capitalist countries trade union actions and struggle of the workers may force the capitalist to raise the wage above the subsistence level where the trade union is powerful or the wages may be forced below the subsistence level where the trade union movement is weak. But, in the Soviet Union, in the name of socialism, the new Tsars have forbidden all independent trade union actions. As such, the directors in their ugly bid for economising the cost of production force the workers below the subsistence level.
All this is being done by investing power to a very powerful managing agency of intermediaries, who are neither direct producers, nor entrepreneurs. This agency is called Khozmschot is one of the forms of subordinating the Soviet economy to a particular group of people. As in India or elsewhere a person or a group of persons can declare in a memorandum and articles o[ association before setting up a proprietary, private limited or public limited company, before the Registrar of the Government and these companies are protected juridically, the economic reform in 1965, in the Soviet Union has introduced a similar law. Article 7 of the Statute of the Socialist enterprise (approved by the USSR Council of Minister on October 4, 1965) says, "The enterprise shall have a charter approved by the body that has passed the decision of setting up the enterprise. ,.. The charter o[ .the enterprise shall contain:
"the name (or number) of enterprise and it location (postal addresses) ;
the name of the body to which the enterprise is directly subordinated (the superior body) ;
object and purpose of the enterprise;
stipulation to the effect that the enterprise has a charter fund;
stipulation to the effect that the enterprise operates on the basis of the present statute and is a juridical person:
status of the official placed at the head of the enterprise (directors, managers, chief) and more.
Why is this charter invited and from whom? As shown earlier, the nationalised land were given to the highest bidder teams who gave guarantee of the highest production. The socialised enterprise have also been given to a group of persons who give a guarantee and assurance of the highest production with the lowest cost. The above charter is meant for them and this group of people are the managing agency who are called Khozrachot. Khozraschot or the intermediary managing agency enjoys in fact the exclusive right o[ purchasing plant equipment, works as intermediaries to obtain credit from the State bank, have the right of purchase of raw materials, the authority to determine the wages of the employee' and the price of commodities, authority to plan for internal production and external sale etc. etc. In one word, Khozraschot is now the all-in-all in the Soviet economy. "In their work the ministries depend on Khozmschot amalgamations, to which (hey have relegated many operative functions. Along with the enterprises the intermediate managing body plays an important part in managing the entire production .... The development of economic methods of management and extensive introduction of the Khozmschot principle in industry have necessitated the establishment of mutual rights and obligations." As the modem Soviet economists say Khozraschot will gradually extend it sphere of control by forming big trusts and amalgamations of all enterprises. Kosygin in explaining the task of Khozmschot Said, "The ministries that are being organized now will work in entirely different condition , the function and administrative management of industry being combined with greatly enhanced methods of Khozraschot and economic stimuli, and the economic rights and incentives of enterprises broadened .... Emphasis will be laid on economic levers on aiding enterprise and firms in improving their work and gradually introducing the principle 'of complete Khozraschot." (The above quotations are from Economy, Management, Planning by Anatoli Yefimov and Alexander Anchishken, published from Moscow).
With the completion of Khozraschot in all the enterprises, amalgamating them under one management with money playing the role of an independent variable, capitalism in the Soviet Union will blossom. That a factory-wise appropriation by a new exploiting group has arisen in Soviet society through capitalist accumulation in the process of extended reproduction through the group ownership of the means of production and using money as independent variable will be discussed now.
Means of Production
"'When Marxists speak of production of means of production what they have primarily in mind, is the production of implements of production. What Marx calls the instrument of labour, those of mechanical nature which taken as a whole we may call the bone and muscle of production which constitute 'characteristic of a given epoch of production'. To equate a part of the means of production, including the implements of production, is to sin against Marxism, because Marxism considers that the implements of production play a decisive role compared with all other means of production," (Stalin, Economic Problems of Socialism in the USSR).
In capitalist society means of production are commodities, they have value and they are bought and sold tor money. That is why capital is also value which brings more value by exploiting wage labour. In socialist society means of production are not commodities and they have no value and they are not bought or sold for money nor is interest charged for their use. That is why they are not capital and do not bring more value through the exploitation of wage-labour.
The means of production themselves do not create any value. The value created by labour remains concealed in the machine and it is realised all at once either through its outright sale or reappears in the value of the product in the process of production only to the extent of its wear and 'tear and the same amount of value is realised in the process of 'circulation of the commodity produced by the machines. Here lies one of the principal differences between the capitalist and socialist systems. In the capitalist system the mean' of production function as circulating capital and fixed capital, whereas in the socialist system the mean of production function as neither but only as instruments of labour. In capitalist society, because of the compartmentalisation of society in different groups and sections even within a class and because the working class is treated as property in a particular enterprise, some people are machine producers and sellers while others are machine buyers and factory owners. The machine sellers realise the value and surplus value as soon as he sells the machine to the machine buyer. Here the machine functions as commodity capital for their producers and does not constitute an element of his fixed capital. (Marx. Capital Vol. II; unless otherwise mentioned, henceforth all the quotations from Marx are from Capital, Vol. II), But the machine buyer cannot realise the value unless the machine "have undergone a preliminary transformation into capital, into the means of exploiting human labour power." (Engels, Socialism-scientific and utopian). As the machines do not create any value and as the machine-buyer realises the value in, the process of circulation of the commodity produced by those machines bit by bit, only to the extent of wear and tear of the machine, the greater part of the capital invested in machine remains unrealised is called the fixed capital.
In Socialist Society this part of labour embodied in the machines is not the labour of a compartmentalised society, as "in contrast to capitalist society, individual labour no longer exists in an indirect fashion, but directly as component part of the total labour", said Marx. In capitalist society, as has been shown, machine undergo a preliminary transformation of capital which is characteristic of capitalism, whereas in socialist society machines function only as instrument of labour. Marx said, "they are fixed capital only if they transfer this value to the product in a particular way. If not, they remain instruments of labour without being fixed capital. It is not a question here of definitions, which things must be made to fit. We are dealing here with definite functions, which must be expressed in definite categories."
What definite functions do the means of production play in the Soviet Union today? They function as capital, fixed and commodity capital.
It is necessary to investigate and find out how the machine "have undergone a preliminary transformation into capital since the new economic reform in 1965 and how the transfer of value of the machine to the product is made in tha.t "particular way" which is "characteristic of capitalism".
Marx, in his Critique of Gotha Programme said there should be deduction from the total social product of the cooperative proceeds of labour for covering the replacement of the means of production used up and an additional portion for expansion of production. But the Soviet Union in Article 9 of the statute of the Socialist Enterprise enacts "The sate shall not be responsible for meeting the commitments of the enterprise, nor shall the enterprise be responsible for the commitments of the State". It means, so far as the use of the means of production is concerned, "cover for replacement of the means of production used up and additional portion for expansion of production are no longer the task of the State of the dictatorship of the proletariat but are the task of the enterprise individually and separately as in capitalist countries. It also means that the product of labour is no longer considered as a component of total social product of co-operative labour. Labour and its product are compartmentalised, that is why Article 13 of the same Statute enact, "The enterprise shall earmark depreciation allowances for overhaul and for complete renewal of 'fixed assets, .... Depredation allowance for the complete renewal of fixed assets shall be fixed to finance capital investment in conformity with the law."
If the responsibility of replacement of machine used up and extended reproductions does not rest with the State and if the product is not considered as the co-operative proceeds of the total social product, then the State cannot be considered as socialist State as the very principle or socialised appropriation has been abandoned: As the means of production are treated as the first stage as commodity capital, as ownership of the means of production is no longer social owner hip, but group ownership, the capital invested in buying machines needs realisation of full value for the second time, in spite of the realisation of full "value at the first stage, as ownership changes with the sale. Hence the transfer of value of the machine to the product is clone in the process of production and it cannot be done otherwise except in that "particular way" which is "characteristic of capitalism" where the means of production are treated as commodity capital. A such, the group who bought the machines cannot realise the capital invested unless the machines have undergone a preliminary transformation into capital", So instead of treating the machines as instruments of labour, the directors of the Soviet enterprises treat these as fi ed capital, For this violation of socialist principle' and treating the means of production as commodity, the Soviet authorities are gradually losing the grip over society, and private industries with private ownership are daily growing in contravention of the Soviet laws of group ownership. "The Soviet press has told the world that several "under-ground" and private factories have been unearthed in the country. How and why has this been possible? It is the logical consequence of the new economic reform. Article 21 of the Statutes enacts, " surplus equipment, transport facilities, instruments, tools, stock, raw and other materials, fuels, draught animals and productive live stock may be sold by the enterprise to other enterprises and organisations. ... Material, tools and other assets acquired by enterprise as part of local procurements ma, be sold by it without permission of the higher body.'
Labour-power is now a commodity in the Soviet Union and sold by its owner for money wages equivalent to its value, ,that is, to the amount 0f labour embodied in the; goods needed for existence since (a) labour is not considered components of total social labour; (b) products are not considered total social product and (c) each of enterprise directors are free to bid up wages.
The Soviet society is a commodity- producing society since "socialist enterprise enjoy a certain margin of economic independence and freedom of business activity. Ever thing they produce they ell either to enterprise or to the population", and elsewhere, "greater use is made of the possibilities of commodity-money, relations." (V. Dyachenko, Econometry, the Market and Planning, a Moscow publication): and since the means o{ production function both as commodity and fixed capital.
Money in the Soviet Union is no longer treated as a means of more or less exact measurement, and supervision by society", It is treated as capital. The Soviet Union does not allow the' principle of socialist accumulation based on socialised appropriation and. socialised covering up of replacement of machines used up and an added portion for extended reproduction. On the contrary it follows the principle of capitalist accumulation based on enterprise-wise appropriation. Money serves as capital through the replacement of fixed capital into money and through its circulation.
VI. Conclusion
Engels said in his Socialism-Utopian and Scientific, "But the transformation, either into joint stock companies and trusts, or into State ownership, does not do away with the capitalistic nature of the productive forces. In the joint stock companies and trus, this is obvious. And the modern state, again, is the only organization, that bourgeois society takes on in order to support the external condition of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists.The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers, remain wage- workers -proletarian The capitalist relation is not done awa' with. It is rather brought to a head. But, brought to head, it topples over. Stale ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical condition that form the elements of solution."
In criticising the draft of the Eurfurt programme, Engels wrote to Kautsky referring to the word "planlessnes" of capitalism used in the draft programme, "when we pass from joint-stock companies to trusts which assume control over, and monopolise, whole industries, it is not only private production that ceases, but also plan lessness." This is most revealing.
It is clear from the above two quotations that even the capitalist fight against the individual capitalist and 'nationalise' all private capitalist enterprises and transform them into state owner ship. It also means, that in capitalist society even, private production may cease together with the cessation of planlessnes. So neither the state ownership and cessation of private production, nor the planned economy are a special feature of the socialist society in these days. Capitalists today, in order to cope with the basic contradiction of socialised labour and individual appropriation introduce a kind of spurious socialism and socialised appropriation which is in reality, an appropriation by a particular group for which planning and State ownership are unavoidable. Lenin in hi State and Revolution said, "But however much they do plan, however much the capitalist magnates 'Calculate in advance the volume of production on a national and even on an international scale, and however much they systematically regulate it, we still remain under' capitalism- at its new stage, it is true, but still capitalism without doubt. The "proximity" of such capitalism to socialism should serve genuine representatives of the proletariat an as an argument proving proximity, facility, feasibility and urgency of the socialist revolution and not at all an argument for tolerating 'the repudiation of such revolution and the efforts' to make capitalism look. more attractive, something which all reformists are trying to do."
A such, neither the absence of private production, nor the presence of State ownership nor the planned economy should be the criteria of judging the Soviet society. The objective of the capitalist planning is to 'control' as far as practicable the anarchy of the blind operation of the law of value by "adjusting" the basic contradiction between socialised production, and individual appropriation, whereas the objective of the socialist planning is the gradual eventual invalidation, of the operation of the law of value altogether from the social life and transform the society from "the Government of persons" into "the administration of things". The objective of the present Soviet leaders is not the invalidation but the 'control' of the law of value. That is why the Soviet society can no longer be called a socialist society.
(Concluded)
