Editorial: Socialism is the only basis for unity (1952)

Editorial from the November 1952 issue of the Socialist Standard

In working-class circles in the early years of this century the idea of international unity was widely if not deeply held. It was taken for granted that as trade unions and labour parties in all countries had similar aims of seeking higher wages and social reforms, they had only to get together to be truly united. The clash of nationalist sentiments was admitted but it was considered that this was an evil for which reactionary governments were largely responsible and that when the workers got to know and understand each other national hatreds would disappear, and with them war. As an aim, the workers looked to Labour Governments which would, naturally, co-operate with each other in a friendly way.

The S.P.G.B. did not accept any of those easy assumptions. It insisted that the choice was between having Socialism (which presupposed a majority who understood Socialism) and retaining capitalism, and that so long as capitalism remained there would be misery, poverty and war. The counter-argument the labour parties put was—rather vaguely because they never clearly formulated it—that there would be a sort of transition during which Labour Governments would steadily improve workers conditions and at the same time educate them and unite them for the eventual advance to Socialism. They insisted, above all, that this was the way, indeed the only practical way, to preserve peace and foster world unity.

After half a century we can now check up on the rival conceptions of labourites and socialists and see which has been proved correct.

We have had two world wars and can see the possibility of another, for the governments are all arming and hurling threats and abuse across the frontiers, and where stand the parties that thought they could control and improve capitalism? They stand divided on opposite sides of the iron curtain. In the West the British Labour Party and its associated parties denounce the Communists who govern Capitalism in Russia and her satellite countries and are denounced by them. The trade union movement of the world is likewise divided into hostile camps; on one side the International Confederation of Free Trade Unions and on the other the (Communist) World Federation of Trade Unions. On the political field the labour parties and their international committee are at war with the communist parties.

In domestic matters the experience of Labour Party control of Capitalism has been equally disastrous. Far from inspiring and uniting the working class it has ended with deep divisions inside the Labour Party and trade unions. Gone are the days when the standard Labour Party argument against the S.P.G.B. was to chide us with dividing the workers and to urge us to get inside the united ranks.

The working class in each country and internationally are at present desperately divided but the responsibility lies not with die S.P.G.B. but with those who started with the erroneous idea that capitalism could be controlled and moulded into something better and had to learn by experience that the policies of Labour and Communist Governments operating capitalism are determined by capitalism.

When they learned their error the British Labour Party resorted to the trick of pretending that a new system had been introduced, the “Welfare State." Stalin and his associates took the even more impudent course of claiming that Russian state capitalism had actually become Socialism.

Stalin's latest contribution (Daily Worker, 14 October, 1952) is to present to Russian readers a detailed argument to show how and why commodity production and the law of value must continue to operate under “Socialism"; which is chiefly of interest as showing that in Russia too there must be workers who are asking awkward questions and are not satisfied with the double-talk of those who govern in their name.

From a working class standpoint the world is in a desperate state but the situation has a brighter side. It is evident that the old reformist theories and trust in nationalisation or State capitalism have lost their attraction and the leaders are frantically trying to retain their hold on a rank and file filled with doubt. That should be a great opportunity for Socialist propagandists.

Blogger's Note:

Alwyn Edgar's mention of Stalin re-defining 'Socialism' in the Passing Show column (see under 'Ah, but this is different'), plus the reference to Stalin in the CPGB's Daily Worker along the same lines in this month's editorial both probably relate to his 1951 work. the Economic Problems of Socialism in the USSR.

East Europe “State Capitalist” says ex-bureaucrat (1972)

From the November 1972 issue of the Socialist Standard

Referring to Russia and Eastern Europe in a recent article in The Times, Dr. Ota Šik, a Deputy Prime Minister of Czechoslovakia under Dubcek now in exile in Switzerland, wrote: “The system has become state capitalist, or state monopolistic, not socialist” (October 4).

Šik joins the former Vice-President of Yugoslavia, Milovan Djilas, in being an ex-State-capitalist bureaucrat who has come to recognise the class character of the regime of which he was once a privileged member.

Šik is no Socialist, however. Quite the contrary. He is the leading theorist of “market socialism” and so a leading distorter of Marxian economics. An opponent of bureaucratic state capitalism, he advocates instead competition between independent enterprises run by “elected supervisory councils”, a kind of “workers-controlled capitalism”. Marx would have regarded such a system as absurd since he was well aware that Socialism necessarily involved the complete abolition of the market and its replacement by democratic planning solely for use.

All the same, Šik (admittedly somewhat confused) recognition of the state-capitalist nature of Russia and Eastern Europe is a step in the right direction, and a sign that there will be others still in these countries who realise this too.

Letter: Russia and the Abyss (1974)

Letter to the Editors from the November 1974 issue of the Socialist Standard

Russia and the Abyss

The otherwise excellent piece on Russian elections (August Socialist Standard page 133) concludes that 200 collective farm workers and 50 others automatically means 1,000 non-workers. But be careful! Russian classifications are abstruse and devious, many are classified as “Peasants”, several “Intellectuals” (Intelligents) even “Technicians”. I readily agree that it’s all baloney anyway, even a Peasant member of the Supreme Soviet is an “Apparatchik”. Perhaps it’s better to say this, or that we are well aware of Soviet nomenclature.

Secondly with reference to the series on the famous books. Good idea and sure to take. But can we be careful to point to the fallacy of facile comparisons between then and now otherwise we fall right into the Labour Party trap — “There you are how much better now . . .”

So long as we emphasise that in a 1970 world of electronics the “Abyss”, as it was, could no longer exist. Or as we say about The Ragged Trousered Philanthropists, many similarities still exist.

The new high-rise flats are an abomination and disaster.

Horatio.

The Russian Embassy attacks the Socialist Standard (1976)

From the November 1976 issue of the Socialist Standard

A reader sent a copy of the July Socialist Standard containing the article "USSR, Land of Privilege” to the Russian Embassy. The letter he received from them is is reproduced below, in shortened form, with our comments.

Dear Mr. Brinton,

I am certainly glad to answer your letter in which you say that you were disturbed, and understandably so, by the enclosed article in the Socialist Standard.

As regards the subject matter in question, the following should be said. Material wealth is distributed in the socialist society according to the principle of “from each according to his abilities, to each according to his work”. Different kinds of work, as regards both quantity and quality, bring different remuneration in the USSR. As a worker gains skill and experience his wages grow accordingly. An experienced teacher gets more than his younger colleague, fresh from a teacher’s training college. A captain of a ship gets more than the crew. Eminent scientists, writers and other creative workers are better paid than ordinary working people.

The principle of “from each according to his abilities, to each according to his needs” will be applied under communism, which is the highest stage of the development of socialism. But to achieve this an abundance of resources must first be secured, and this is what the Soviet people and their government are working at.

Objective laws governing the development of the society in the USSR prevent material inequality from becoming a social evil. First, there is no exploitation of man by man in our society which means that material benefits can only be obtained by working for them. Second, all citizens have access to public consumption funds: free education, free health service, pensions, etc. These funds grow from year to year alongside the development of the national economy. Third, the policy of reducing gaps in the wage levels of various groups of working people is being carried out consistently. The minimum wage has been steadily rising, pensions have also been increased.

As to shortcomings, their criticism is regarded in our society as an indispensable means of progress and is in fact, encouraged in every way. There is a difference, of course, between constructive criticism and slanderous distortion. Articles like the one in question only misinform the British public about the Soviet reality and thus stand in the way of better understanding and stronger confidence between the people of the Soviet Union and Great Britain.

(signed) Secretary

Our answer:

The thinness of the above reply is somewhat surprising. Our article maintained “that there is no essential difference in the class system in the Soviet Union from that elsewhere.” We went on to say: “The common features of western capitalism, exploitation of wage labour and production for profit are present — with the resulting social inequality.” These statements formed the basis of our article and it is these points which our opponent must answer. We note the glossy phrases such as “slanderous fabrications”, “gross distortion” and, to round off the vocabulary roundabout, “slanderous distortion”, but the attempt to refute our statements in fact does the opposite. We are told that in Russia there are laws to prevent material inequality from becoming a social evil; that material benefits can only be obtained by working for them; citizens have access to free education, health services and pensions; there is a policy to reduce gaps in wage levels and that the minimum wage is rising together with pensions. It hardly needs pointing out that this could be Mr. Callaghan or the President of the United States talking about their avowedly capitalist systems. The description certainly has nothing to do with Socialism where there will be no gaps in wage levels, minimum wages or pensions for the fundamental reason that the wage-labour and capital relation will not exist.

It is significant to note that the Russian Communist Party has moved away from its original position when Socialism was described as a society “in which there will not be the market, buying and selling, but consciously and systematically organised distribution.” [1] The secretary chooses to call Russian capitalism “socialism” — he is not the first, but mere repetition of a contradiction does not allow it to make any more sense.

To give, as our article gave (with sources), further instances of inequality in Russia would be superfluous as our opponent is prepared to dismiss them airily on the one hand as “slanderous fabrications”, while prepared to argue on the other that “Different kinds of work, as regards both quantity and quality, bring different remuneration in the USSR.” He makes our point for us. This piece of timid justification is advanced in all capitalist countries in defence of inequality. If our opponent did not mean to be evasive, no doubt he would be prepared to produce official statistics outlining the extent of inequality of income and wealth in Russia, as do all other industrialized capitalist countries. Then we may go into the matter in detail. We are, however, not unduly optimistic that such information will be forthcoming — our opponent does not appear to have much time for details.

On the question of "reducing gaps in wage levels” it is again worth noting the move in policy. Almost 60 years ago Lenin had declared that the introduction of “equal wages” was “a concrete task immediately practicable” although he had to retreat from this position in 1918 and acknowledge that the Russians had “to make use of the old bourgeois method and agreed to a very high remuneration for the service of the bourgeois specialists.” To Lenin this was a temporary measure however. He considered it “a step backward.” [2] Now, we learn from our opponent that this state of affairs is considered “just.”

He refers to “public consumption funds”. These appear to finance education, the health service and “pensions etc.” It is the “etc” which attracted our attention. For instance, is spending on armaments considered “public consumption”? If it is not, clearly the government must finance it from some other fund. The point being that any funds which the Russian government may control can only be the monetary expression of the surplus-value (unpaid labour) of the Russian workers. No amount of twisting and turning can remove that fact. This then puts a true light on his statement that “there is no exploitation of man by man”, which we take to refer to private capitalists exploiting workers in a private concern. Although this statement in itself can be refuted, its purpose is calculated to evade the crucial point that the Russian system is predominantly one of exploitation by the State.

In short, a system of state capitalism. It will be remembered that it was Lenin who said “Reality says that State Capitalism would be a step forward for us”. That step has been taken, but the Russian workers are no nearer Socialism, or Communism — the terms mean the same — than are the workers in the Post Office and other state-capitalist institutions in Britain or elsewhere. The ruling class, in this case the State, retains control and ownership of the means of production and distribution. To claim that the State is the people completely flies in the face of all the facts. Our opponent does not make this claim directly but refers to “what the Soviet people and their government are aiming at.” The distinction between the two is appropriate, they are opposing classes, but the statement also belies a fundamental misconception over the nature of Socialism. The implication is made that, given the right internal conditions, the Russians could establish a Socialist (or Communist) society within their national borders. To anyone who understands the concept of a system of society based upon common ownership and democratic control of the means of wealth production and distribution, it is evident that such a society can only be established on a world-wide basis. The writer clearly has no- such concept in mind.

In conclusion we draw attention to- one point made in our original article. We said: “At other times when there are differences of policy with western powers, anti-Russian propaganda will expose and exaggerate these shortcomings”. In short, we are aware that the Press in Britain (as elsewhere) has an axe to grind more or less severely, according to circumstances. This, of course, is not limited exclusively to Russian affairs, it is true of their dealings in all aspects of international capitalism. Our purpose is not to grind axes, or to single out the Russian system of capitalism for special treatment: indeed the point we have made is that from the view of the working class, the form of society in Russia is little different from that of other countries. Our opponent has ably confirmed this conclusion. Our purpose is to work for the democratic removal of private property society. In doing so we must necessarily reject the arguments, or more accurately the assertions, of those who claim that Socialism exists in certain countries today. The interests of the Russian people, and the interests of the working class outside Russia, are the same. The abolition of capitalism, state or private, and the establishment of Socialism.

[1] Bogdanov: Short Course of Economic Science.

[2] Lenin: The Soviets at Work.

Blogger's Note:

"Mr. Brinton" wasn't Maurice Brinton. Of course not. There was a Colin Brinton from Harwich who was writing to the Socialist Standard at this time. Maybe it was him.

Where is Russia Going? (1988)

From the September 1988 issue of the Socialist Standard

Russia has — and at no time since the 1917 revolution ceased to have — a capitalist economy characterised by the existence of commodity-production, wage-labour and capital accumulation. What has changed, and is changing again under Gorbachev, is the way in which economic decision-making within this system is organised.

Capitalism is a class society in which those who do the actual work of production, whether manual or intellectual, are separated from the means of production and have to live by selling their mental and physical energies to those who monopolise the farms, factories, mines, warehouses, offices and other places where wealth is created.

What distinguishes capitalism from other class societies is the fact that the great bulk of wealth is produced by wage-labour, for sale on a market. It is a society where all wealth is produced with a view to being bought and sold, which is what Marx meant when he spoke of capitalism as involving generalised “commodity production”. A commodity is an item of wealth that has been produced for sale and, as Marx put it in the opening line of Capital: “The wealth of societies in which the capitalist mode of production prevails appears as an immense collection of commodities”.

Commodity-production in Russia

Wage-labour has never been abolished in Russia; on the contrary it expanded massively as more and more peasants were transformed into wage-workers for developing industry. The existence of wage-labour as the predominant form of productive work has been in itself sufficient proof of the capitalist nature of the Russian economy. But what about commodity-production? Can this too be said to have always existed in Russia since 1917?

There has never been any argument about consumer goods in Russia being commodities; they are quite obviously produced with a view to being sold and are just as obviously bought for money. In Stalin’s time, however, the official Russian position was that producer goods such as raw materials, machinery and other elements of production were not commodities.

The case for denying that producer goods, called “means of production” in the debate, were commodities rested on the nature of the system of central planning instituted in Russia in the 1930s. Under this system, the factories and other places where wealth was produced received strict instructions from the central state, not only about what to produce but also to whom they should deliver their products and from whom they should get their supplies. Factories were in effect supplied by the central state with the materials and equipment they needed for production.

Stalin argued that, as this amounted to a system of direct supply in kind, the products involved were not commodities but simply useful things being physically transferred from one unit in the productive system to another. As he argued in 1951 against a certain Notkin who, apparently, had dared to argue that producer goods in Russia were commodities:

“A commodity is a product which may be sold to any purchaser, and when its owner sells it, he loses ownership of it and the purchaser becomes the owner of the commodity, which he may resell, pledge or allow to rot. Do means of production come into this category? They obviously do not. In the first place, means of production are not “sold” to any purchaser, they are not “sold” even to collective farms; they are only allocated by the state to its enterprises. In the second place, when transferring means of production to any enterprise, their owners – the state – does not lose the ownership of them; on the contrary, it retains it fully. In the third place, directors of enterprises who receive means of production from the Soviet state, far from becoming their owners, are deemed to be the agents of the state in the utilisation of the means of production in accordance with the plans established by the state.” (Economic Problems of Socialism in the USSR)

In other words, according to Stalin the central state was simply engaged in transferring wealth it owned from one of its factories to another; just as, for instance, the Ford motor company did when parts produced in one of its factories were transferred to another for incorporation into the final product.

Faced with this argument those in the Marxist tradition responded with a number of possible, and not always compatible answers. One was to accept that Russian producer goods were not commodities and that therefore Russia was not capitalist but some new form of exploiting class society.

Another was to accept the analogy with Fords and argue that Russia was a single, giant capitalist firm operating within the context of the world capitalist system.

A third argument was that the products Russian enterprises transferred to each other were commodities because they had to be paid for, the receiving enterprise having to transfer a sum of money from its account to that of the supplying enterprise. So what the central planners in Russia were planning was not the simple physical transfer of productive resources between productive units but the exchange of commodities among commodity-producing enterprises.

This last was undoubtedly a correct analysis as the central planners not only had to plan the physical transfer of producer goods from enterprise to enterprise but also to fix prices’ generally. Since the death of Stalin the Russian authorities have come to accept that producer goods in Russia are commodities (which leaves a few die-hard orthodox Trotskyists as the only defenders of Stalin’s position).

The following, then, is a more accurate description of the system of imperative (that is, compulsory, binding) central state planning in Russia, an understanding of which is essential to a comprehension of the changes proposed by Gorbachev under the name of perestroika:

“In the Soviet Union some three-quarters of total production is made up of means of production. In a Western type commodity-capitalist economy production and exchange takes place through market relations established directly between enterprises, i.e. in a decentralised way. In the Soviet system, on the other hand, production and exchange relations between enterprises are not directly established horizontally but take place via a vertical centralisation. It is the system of material supply that controls and plans the circulation of commodities. Herein lies the fundamental element of the originality of the Soviet economy. The enterprise receives orders not only on what it must produce and in what amounts. It also has precise instructions on the destination of the commodities it produces: their buyers and users are laid down by the planning authorities. And, above all, the origin, amounts and specifications, and delivery date of their own supply of raw materials, semi-finished products and equipment – the input of their production – are similarly planned. Thus the major part of inter-enterprise exchanges are controlled and organised by administrative apparatuses situated outside and above the units concerned.”  (B. Chavance, Le système économique soviétique).

To which must be added that, as indicated, the prices which enterprises must pay their suppliers and must charge their customers are also fixed centrally.

In other words, what the central state in Russia has been planning from Stalin’s time to today has not been the simple physical transfer of wealth between the various productive units it owned but the exchange of commodities between them. Productive units in Russia produce wealth to be sold (commodities), even if they have not been free to decide to whom to sell and at what price. But despite this state control there is still commodity-production by wage labour, and so therefore capitalism.

Failure of central planning

The aim of production in Russia, as in any capitalist country, is to maximise the amount of surplus value extracted from the class of wage and salary earners. To do so requires some measure of the rate of exploitation of wage-labour, of the surplus produced by workers over and above the value of their wages and salaries. This can only be provided by a price structure in which the prices of resources used in production accurately reflect their cost of production plus the average rate of profit (what Marx called their “price of production”).

In Western-type capitalism such a price structure is brought about more or less spontaneously through the operations of market forces. In Russia the central planners had to try to work it out themselves. For various reasons they failed, as has been admitted by Academician Abel Aganbegyan, one of Gorbachev’s top economic advisers and a leading theorist of perestroika, when he writes in his recent book The Challenge: Economics of Perestroika (Hutchinson, £8.95):

“The existing system of prices does not give a true valuation because prices do not reflect social costs and the efficiency of production. Up to now this common denomination has been lacking in the Soviet Union.”

This has meant that the Russian ruling class has been deprived of an accurate measure of the rate of extraction of surplus value at enterprise and industrial branch level as well as at the level of the economy as a whole, and so hasn’t been able to calculate properly where to invest new capital so as to make the most profit and achieve the highest possible average rate of profit over the whole economy.

Although central planning has been successful in developing one or two specially selected industrial sectors; in ‘particular the military (for such a comparatively backward country economically, Russia’s advances in weaponry and space research, whatever else may be said about them, represent a considerable technological achievement), it has proved a failure for the rest of industry .

This is not just the consequence of an inability to develop a coherent price system, but also because it could not provide a substitute for competition as a spur to enterprises increasing labour productivity through technological innovation and advance.

This failure has been evident to the Russian rulers since the late 1950s and various reforms have been introduced to rectify things, but all to no avail. In Khrushchev’s time, the economist Liberman proposed that enterprises should be allowed more freedom to seek and retain profits. Experiments in this direction were made but were never extended to the whole economy, as this would have demanded the complete dismantling of central state planning. As reform after reform failed, and the Russian economy continued to stagnate in terms of productivity and technological advance (it is not for nothing that the Russian rulers refer to the 20 years of Brezhnev rule as “the period of stagnation”), this question had finally to be faced. Which is what Gorbachev has done and what perestroika, or restructuring, is all about.

Perestroika and market forces

The restructuring that perestroika involves is precisely the abandoning of central state planning of commodity production and exchange in favour of allowing enterprises to buy and sell directly from each other at prices fixed by the market.

As explained by Aganbegyan, the first step towards this has already been taken in the “Law on Socialist Enterprises” passed in June 1987 and operative on 1 January this year. Under this law individual enterprises have been granted their independence from the state:

“Enterprises and associations are to become independent, self-accounting, self-financing and self-managing. These four characteristics all involve the responsibility of the enterprise, and imply a completely new economic situation for the basic production units in the Soviet economic system. Only in these conditions can the working collective of an enterprise really be master, owner and director of the resources of production available to it.”

Since such independence is being guaranteed by a law enforceable in the Courts this amounts to a virtual “privatisation” of these enterprises. This time it is not just a question, as it was in a previous law passed at the time of the Liberman experiments in 1965, of allowing enterprises to retain some of their profits as an incentive to get them to carry out the central state’s orders and instructions efficiently. Enterprises are to become autonomous legal and economic units dependent for their income on the sale of the commodities they produce.

“Enterprises are changing over to full self-accounting, in which all expenditure must be covered by income. What does full economic accounting mean? It may be contrasted with partial economic accounting. Currently enterprise income covers only running costs, while at the same time a significant part of capital investment of the enterprise comes from centralised resources. Full economic accounting, above all, implies that there are no subsidies so that the income of an enterprise from production covers both its running costs and its capital expenditure.”

In a later chapter Aganbegyan expands on what this will mean:

“Enterprises will receive their earnings from the sale of their output. The gross revenue of enterprises will be formed by these earnings after material input expenses have been met (on raw materials, finishing, and even amortisation). From this gross revenue an enterprise makes payments for resources used (natural resources and labour, and the use of capital stock), makes contribution to the budget, local authority rates and to ministry funds, pays off bank credit and any fines 10 contractors and makes any other payments due. The remainder is self-managed income at the full disposal of the enterprise’s working collective, determining its well-being and further development. To receive a large self-accountable net income more goods must be sold, through increasing both the quantity and quality of production, and by trying to get higher prices. For this a competitive edge will need to be maintained against other similar enterprises and higher quality and a better technological level of output will need 10 be attained. All this is a precondition for a larger self accountable income. The self-accountable income also depends on production costs. The lower the fuel, energy and raw material consumption, the larger the enterprise’s income.”

In other words, the enterprises are going to be expected to behave in the same way as private and state enterprises do in the openly capitalist West: to seek to maximise their retained profits (“self accountable income”) both by minimising costs and increasing sales.

Their relationship to the banks is to be similar too. “It will be advantageous for an enterprise”, writes Aganbegyan, “to draw on credit and this will increase its self-accountable income if the credit is well used so that the profit is increased at a greater rate than the interest paid on the credit”.

The next step in perestroika after this granting of legal and economic independence to enterprises will be to allow them to choose their own suppliers and customers and to agree among themselves the prices of the goods they trade with each other. Aganbegyan does not disguise the fact that this will have to involve the dismantling of the old system of central state planning described above, under which enterprises’ suppliers, customers and prices were fixed centrally:

“Up to now the market in the Soviet Union has been both restricted and deformed. Most means of production have been centrally allocated by the state through a material and technical supply system. They are not freely bought and sold . . . During perestroika market relations in the USSR will be deepened and broadened. Above all the market is set to more than double in size thanks to the transition from centralised material and technical supply to wholesale trading in means of production, including direct commercial links between enterprises. In this way a well-developed market in means of production will be created, and the proportion of centrally set prices will be retained only for the most essential products, to control their rate of growth and to stave off inflation. At the same time the scope of contracted and free prices will grow significantly.”

The abolition of “centralised material and technical supply” (as described above by Chavance) and “centralised pricing” which have been features of the Russian economy since the 1930s would represent a really radical change in the organisation of the Russian economy, but the timetable for this has already been laid down. By 1990 60 per cent of all production is to take place through wholesale trading, rising to 80-90 per cent in 1992. Similarly, the number of prices set centrally is to be reduced so as to cover only the more essential products (such as fuel, electricity and certain raw materials and steel products). The rest are to be determined by market forces and even then the prices of those commodities which remain centrally fixed are to be linked to their world market price. Planning will still remain but be indicative — providing global estimates of market demand — rather than imperative.

Return of the bondholder?

If it is implemented — and it remains to be seen whether or not this reform will suffer the fate of previous ones — perestroika will represent a fundamental change in the form of capitalism that has existed in Russia until now. It will represent a transition from centrally planned commodity production and exchange to a more competitive system in which the competing units would be, as in the West, legally and economically autonomous enterprises. The economic laws of capitalism will come to operate in Russia through competition rather than through the State which, Aganbegyan admits, has proved to be an inadequate substitute.

Other changes can be expected to follow. In his book Aganbegyan dismisses the idea that a stock exchange could develop in Russia. Other advisers to the Russian rulers are not so sure, according to a recent newspaper report:

“A senior Communist Party official yesterday predicted that the Soviet Union could eventually have its own stock exchange under reforms promoted by Gorbachev. Mr Evard Figuranov, of the Party’s Central Committee’s economic department, said creation of an exchange was the logical extension of new forms of stimulating use of savings introduced over the past year. “It is not under consideration yet, but I think it will be in the future”, he said at one of a series of news briefings, organised to coincide with the current Party conference in Moscow . . . Over the past year, small, state-owned enterprises around the country have begun offering shares to employees and bonds for specific development projects as control by ministries in Moscow has been relaxed. Mr Figuranov said a bond market could arise alongside a share market for the construction of social projects like kindergartens and sports complexes.” (Daily Telegraph, 2 July 1988)

This would indeed be a logical extension of perestroika, and not just kindergartens and sport complexes. For, if enterprises are to be allowed autonomy to seek to maximise their so-called “self accountable income”, why should they be obliged to go to the banks when they want money to pay for some development project? Why shouldn’t they be allowed to offer bonds and shares for sale to the general public? It should not be imagined that there are no rich people in Russia. There are – the children of scientific and artistic prize-winners who have inherited wealth from their parents, for instance, as well as the top members of the nomenklatura and their families, and black marketeers past and present – and many of these would be only too keen to invest their wealth for profit.

Adam Buick

Next month we look at the consequences for Russia’s paper commitment to be working towards a moneyless society of Gorbachev’s acceptance of so-called “market socialism”.

Letter: Has Russia "Production for Use?" (1934)

Letter to the Editors from the October 1934 issue of the Socialist Standard

Has Russia "Production for Use?"

A correspondent (S.N.), writing from Waihi, asks how the S.P.G.B. justifies its attitude towards Russia in face of the following statement made by an observer of Russian conditions: —

After all, there is nothing wonderful about these (Russia’s) achievements. The simple and sufficient explanation is that in a mad world, one country is acting rationally—and is planning her industry and producing for use not for profit. . . .

The name of this observer is not given, but whoever he is, his observation is very much at fault. Nobody denies that the output of Russian industry has increased, but that can be said of many countries which make no claim to being anything but capitalistic. Whether or not those in charge of Russia can be said to be acting “rationally” depends on the point of view. From one angle it has been said that since Socialism in Russia is at present, and for many years to come, an impossibility, it is wise to come to terms with the capitalist world and enter into the mad scramble for markets which is a feature of world capitalism. At any rate, that is what Russia is doing. One outstanding instance of this is the enormous efforts Russia is making to develop the production of gold. The July issue of the Monthly Review of the Moscow Narodny Bank (an official | Soviet institution), publishes an article on gold production, from which we learn that the output of gold has been advancing rapidly. In December, 1933, it was nearly twice as great as in December, 1932, and a further great increase is planned. Russian gold output in 1933 was second largest in the world, being beaten only by Transvaal. The writer of the article in the Bank Review (A. Serebrovsky—chairman of the Central Administration of the Russian Government Gold Trust), holds out the hope that "in the near future the U.S.S.R. will assume first place in the world as a gold-producing country."

Is this rational, except on a purely capitalist basis? Of course it is not, and the Bolsheviks knew this well enough not so long ago. Did not Lenin tell us that under Socialism gold would no doubt be used for the construction of street lavatories ?

Again, this observer is quite wrong about Russia producing for use. Production for use (and this, too, the Bolsheviks once knew quite well) involves the abandonment of buying and selling, and profit-making. In Russia, however, goods are not produced for use but for sale, at a profit. The first charge on Russian industry is to meet the enormous cost (upwards of £100 millions a year) of the interest payments to the bondholders (mainly Russian citizens) who have invested money in the loans continually being raised by the Russian Government.

Quite unintentionally a pro-Bolshevik observer, Mr. Louis Fischer, who for years represented American newspapers in Moscow, showed the capitalist character of Russia in a recent article called " In Russia, Life grows Easier." He wrote: "The food situation, too, is much better than it was last winter. There is scarcely anything one cannot buy—if one has the money." (Nation, New York, June 13th, 1934. Italics ours.)

That is not production for use but production for sale, as in other capitalist countries, " to those who have the money." Ed. Comm.

Here and There: "Socialism’’ in Russia (1936)

The Here and There column from the October 1936 issue of the Socialist Standard

"Socialism’’ in Russia

 

Mr. Maisky, the Russian Ambassador, recently addressed the Liberal Summer School on Russian foreign policy. In the course of his lecture he said: —

But at the same time we fully realise that we are still very far from our achieving our goal. We are only half way there, and it will take decades and decades to complete the construction of the Socialist society, which at a later stage will be transformed into Communist society. This is a very long development which will absorb the efforts of more than any generation.—(Manchester Guardian, August 3rd.) 

Communists and others who expected the millennium in Russia after the successive Five-Year Plans might note.

 

Britain for the British

 

A newspaper comments:—

British Equity, the actors' Trade Union, has won a big victory in the case of an American show which is shortly to open in London.

Equity insisted that an equal number of English girls be put into the show. Failing that, the permits would be opposed.

At the present time, when there are so many people out of work in the theatres, the action of Equity and its result cannot be too highly commended. 

The newspaper was the Daily Worker (August 10th, 1936).

There is a much bigger victory awaiting the workers of all countries, and when there are fewer misguided reformers to over-emphasise the importance of minor things, such as this, the workers will begin to understand why and how they should obtain it.

Straws in the Wind

Sir Abe Bailey, one of the principal Transvaal (S. Africa) mine owners, is a staunch patriot and imperialist—which, in the circumstances, is not very surprising. He writes to The Times (August 6th): —

I should like to see our National Government still further strengthened by the inclusion of the best elements of the Liberal and Labour parties and of some of those distinguished supporters of the present Government who are not members of the Cabinet. Such a Government, pinning its faith to the patriotism of its people, would be strong enough to tell the truth to' Englishmen (always at their best when up against it) and to take those measures—I believe conscription should be one of them—which will alone give security to this island and its oversea communications.

Sir Abe Bailey sees the rise of other imperialist powers in Africa, where he has immense industrial and financial interests, and is obviously nervous. We do not doubt that if the Empire were faced with an international crisis the “ best elements ” of the Liberal and Labour parties would show their willingness to join and support the Government in defending capitalism.

Communists in Canada

According to the Winnipeg Free Press (July 30th), Manitoba has had the honour of electing the first Communist M.P. on the American continent. The newspaper report says: —

Litterick became the first Communist to be elected to a provincial or state assembly on the American Continent and the second member of the party to become a member of parliament or legislature in the British Empire.

Should the illusion prevail that Communists abroad differ from those in England in their methods of vote-catching we quote from Mr. Litterick’s election programme.

• Provision of work for unemployed at trade union rates of pay.
• Clearance of slums, home construction and other necessary work.
• Abolition of the two per cent. wage tax.
• Extension and more rigid enforcement of the Minimum Wage Act.
• Provincial Health Act to cover all with incomes under 12,000 per year.
• Old Age Pensions of $50.00 per month, payable at 60.
• Extension of municipal franchise to all residents over 21 years.
• Extension of municipal democracy—abolition of municipal administrators.
• Adequate system of vocational and technical training.
• Provincial grants for scholarships and subsidies for needy students.
• Opposition to all attempts at railroad amalgamation.
• Five year moratorium on interest and principal of all provincial indebtedness.
• A steeply graduated increase in the corporation income tax.
• A steeply graduated increase in the income tax on all incomes over $2,000 per year, with adequate exemptions for all dependents.
• Capital levy on surplus reserve funds of corporations and banks.

There is no mention in it of Socialism or Communism—of course; nothing which the average supporter of capitalism, with very little adjustment, would oppose; and much which has already been applied by Mussolini and Hitler, such as the “ Capital Levy . . .” and “ A steeply graduated increase in the income tax. . . .”

Harry Waite

Letter: State Capitalism (1960)

Letter to the Editors from the October 1960 issue of the Socialist Standard

State Capitalism

After coming into contact with the SPGB through the pages of the American Western Socialist, I am left with the following doubt. Does the SPGB wish to see a regime of full scale nationalisation (i.e.. State Capitalism) instituted, or would industries be controlled by workers’ soviets?

As an anarchist, I cannot see that a centralised state bureaucracy can ever give true public control. Industry must be organised and run by elected workers' councils. What is the SPGB's attitude to this?

J. A. D.

Darlington. Co. Durham.

Reply:

Our correspondent correctly points out that full scale nationalisation is capitalism directly organised by the state machine. Socialists are opposed to capitalism in any form, including state capitalism. The method of controlling industries is determined by the type of ownership to which they are subject. Thus, it is of little importance whether privately owned industry is organised by private companies, as in many cases in this country, or by a central bureaucracy through so-called workers’ soviets, as in some cases in the USSR. Both types of organisation administer privately owned industries in the interests of their owning—or capitalist—class.

When Socialism is established, the control of industry will still be in line with its ownership. It is impossible, at the present, to give a detailed picture of the organisation which a Socialist community will use for controlling industry. That will depend upon the conditions prevailing at the time. But, because the means of wealth production will be commonly owned, we can say that they will be democratically controlled in the interests of the whole of mankind.

Editorial Committee.

Capitalism v. Socialism (1935)

From the October 1935 issue of the Socialist Standard

 

Trade Union official cites Russia!

There has lately come before us a copy of The General and Municipal "Workers' Journal (June, 1935). Reminiscent of a parish magazine, its pages contain so many incorrect statements and samples of loose thinking that it would take several issues of the Socialist Standard to deal with them individually. It may, however, be of interest to deal with the “Notes” of the General Secretary, Mr. Charles Dukes, especially those under the heading of “Capitalism v. Socialism.” The United States is quoted as an example of capitalism, whilst Russia is referred to as “Socialist Russia.” The General Secretary states that the disaster of capitalism in the United States is due to the fact that they have no policy for refunding their National debt, which has increased by nearly 12,000 million dollars as a result of the “New Deal” policy. The General Secretary should know, however, that national debts are not necessarily disliked by the capitalist class—who are the only people concerned; in fact, some of them like them so well, that there is at the moment a widespread newspaper campaign for expanding armaments by means of a £250,000,000 loan, instead of by means of taxation.

A national debt is nothing more than a sum of money owed by the capitalist class as a whole to that section of the capitalist class which invests its money in war loans and other government securities. The incomes of the whole class are taxed in order to pay the interest to that section. National debts, therefore, are no indication of disaster to the capitalist class.

His remarks on Socialism show that Mr. Dukes knows not what this is. Our own definition of Socialism will be found by reference to our object on the centre page of every issue of the Socialist Standard. As it is now fairly well known that the conditions in Russia do not correspond to this definition—in particular, the means of production are controlled, not democratically, but by the controllers of the Communist Party—it will be obvious that Socialism has not been established in Russia.

Again, as under Socialism goods would be produced solely for use, the necessity of the exchange medium—money—would disappear, yet the General Secretary refers to “money,” “income,” and “expense,” as part of the Russian “Socialist” economy. Another reason given for the “success” of “Socialist” Russia is, that she “does not seek the assistance of foreign loans.” Here, again, he is wrong. Instances of foreign loans negotiated by the Bolsheviks have been recorded previously, but the following is a case in point: —

BIG LOAN TO SOVIET.

Prague, Monday.

Soviet representatives to-day signed an agreement with Czecho-Slovakian banks for a loan of £2,083,000 for five years at six per cent, to finance purchases of Czech manufactures by Russia. —British United Press.

(News Chronicle, June 4th, 1935.)

As to the nature of the “success” itself, this would appear to consist of the fact that there are insufficient workers for the available jobs, and that output in the heavy industries has increased as compared with a year ago. And this is the “success” of “Socialism”! It is, of course, simply the conditions which are regarded as successful under capitalism.

The case for Socialism as against capitalism can be put both correctly and much more simply. Briefly it is that capitalism—a system of society based upon the private ownership of the means of production—produces certain unpleasant effects upon an enslaved class called workers, viz.: poverty and insecurity most of the time, and, by way of a change, unemployment and war. It is, therefore, in the interest of the workers to completely change the basis of a society which produces such effects. As the opposite of private ownership is common ownership. Socialists advocate the replacement of the existing form of society by one based upon this common ownership of the means of production and distribution, namely, Socialism. This result can, however, only be achieved by a class-conscious working class organised for that purpose. It is for that purpose that the Socialist Party of Great Britain was formed, and it is up to all workers who agree with our position to join with us and help on with the work. Now, fellow workers, what about it?

R. Milborne

Letter: Socialists and Russia (1935)

Letter to the Editors from the October 1935 issue of the Socialist Standard

Socialists and Russia

August 6th, 1936.

 

Dear Sir,—I was listening to your speaker at Finsbury Park on Sunday evening, August 4th, when he remarked that the Soviet Government had issued loans from 7 to 12½ per cent. profit to subscribers, and hinted that by inviting foreigners to invest they are acting just as State capitalists and that the workers are nothing more or less than wage slaves. May I point out that these loans are used for construction of Socialistic industries and that the bulk of Russian workers, numbering several millions, are subscribers towards the loans, knowing full well the .purpose to which the money is being put. The interest given is certainly an incentive, but it should be pointed out by your speaker that as these loans are spread over an enormous number of subscribers the profit accruing to an individual investor is very small and cannot exercise any influence. Also, the number of foreign investors is estimated at less than one per centum (1%) of the total.

The Bolshevists are practical realists and know full well the impossibility of abolishing wages at the present time. As a matter of fact, this is not so very important, but what is much more essentially valuable is that the ownership and control of the means of production and distribution is held firmly in the hands of the workers themselves. If this is not practical Socialism, what is? Can it be denied that the Bolsheviks took over a graveyard and have now progressed at an amazing rate? Can it be denied that the material well-being of the Russian workers is improving from year to year, and that, to my mind, is the acid test, whether they are wage-slaves or overcoming the conditions of wage-slavery that is inherent in private capitalism.

Your speaker boasted that he is upholding the truth. Therefore he should amplify statements that are likely to be misrepresented by mischievous and unscrupulous individuals.

I remain.

Yours faithfully,

H. Jackson.

Reply.

The principal issues raised by our correspondent are: (1) Whether the social system in Russia is Socialist or Capitalist; (2) Whether the bondholders are all small investors; (3) Whether industry is progressing, and (4) Whether the material conditions of the workers are improving.

For replies to the various points, our correspondent is referred to the pamphlet "The S.P.G.B. and Questions of the Day," and to the Socialist Standard, October, 1934.

Brief replies are also given below: —

(1) Socialists from Marx onwards are agreed that characteristic features of Socialism are the common ownership and democratic control of the means of production and distribution; the production of goods only for use, not for sale; the abolition of all forms of income from the ownership of property; the abolition of the system of wage-labour; and the consequent disappearance of privilege.

Are these things found in Russia to-day? Certainly not. The Communist clique which controls the State machine maintains control of Russian industry as rigid as the control of the British Government over the Post Office. Goods are produced for sale, and at a profit. Rent, interest and profit from the ownership of property, bonds, etc., is a normal and growing feature of economic life. As our correspondent admits, the Bolsheviks, so far from having abolished the system of wage-labour, “know full well the impossibility of abolishing wages at the present time.” Lastly, by various means, including the great and growing inequality of pay between the masses of workers and the high-salaried officials, privilege is enjoyed by a fortunate minority.

(2) It is true that the great majority of bondholders own only small amounts of bonds, but exactly the same plea is made in England and America by the defenders of capitalism. In Russia, although precise figures are not available, it is known that some of the bondholders own large or comparatively large amounts. But in any event, this is beside the point. Under Socialism there will be no investors.

(3) The S.P.G.B. has not questioned the claim that Russian industry (like industry in Japan, Turkey, and other countries) has expanded rapidly since the war.

(4) The S.P.G.B. has not denied that the standard of living has risen since the Bolshevists obtained power. That does not mean, however, that we accept all of the extravagant claims made by some Communists. Russia is a country in which rigid censorship and suppression of independent working-class organisation is the normal order of things. As, therefore, it is impossible to hear the unfettered expression of the opinion of the workers themselves, we must accept with caution the claims made by the Russian Government since that Government has the usual interest in presenting the facts in a favourable light.

In conclusion, we would ask our correspondent a question. Seeing that the Russian economic system is not Socialism because it lacks the essential features of Socialism, will he tell us by what name he would describe it other than the one used by our speaker, “ State capitalism.”

Ed. Comm.

Gorbachev and the End of Communism (1988)

From the October 1988 issue of the Socialist Standard

The Bolsheviks who seized power in Russia in November 1917 drew a distinction, at the insistence of Lenin but unlike Marx and Engels, between socialism and communism.

By “socialism” they meant a society where everybody would be an employee of the state which in turn would own all the means of production; what should more properly be called state capitalism. By “communism” they meant what up to then had more usually been called socialism — a classless, moneyless, wageless, stateless society based on common ownership and democratic control. Thus, in the ABC of Communism, a textbook written to explain the new programme the Bolshevik party had adopted in March 1919, Bukharin and Preobrazhensky stated:

“The communist method of production presupposes in addition that production is not for the market, but for use. Under communism, it is no longer the individual manufacturer or the individual peasant who produces; the work of production is effected by the gigantic cooperative as a whole. In consequence of this change, we no longer have commodities, but only products. These products are not exchanged one for another; they are neither bought nor sold. They are simply stored in the communal warehouses, and are subsequently delivered to those who need them. In such conditions, money will no longer be required. Communist society will know nothing of money. Every worker will produce goods for the general welfare. He will not receive any certificate to the effect that he has delivered the product to society, he will receive no money, that is to say. In like manner, he will pay no money to society when he receives whatever he requires from the common store.”

In Bolshevik theory communism could not be established immediately after the capture of political power but only after “socialism” — defined, as we saw, as 100 per cent state capitalism — had been achieved. A moneyless, wageless society was seen as evolving gradually out of the state capitalist society that was the Bolsheviks’ real immediate aim.

This is still the official dogma of the Russian ruling class though their vision of communism, like everything else they inherited from their 1914 Marxist past, has suffered some significant distortions. It is seen as being able to exist on less than a world scale, either in one large country like Russia or the whole Russian bloc but above all the Party (if not the state as such) is seen as surviving into it.

Stalin proclaimed that “socialism” – more or less total state capitalism – had been achieved in 1936. So, ever since, the country has supposedly been heading for communism. Khrushchev, the last previous “liberal” ruler of Russia before Gorbachev, even tried to give this goal a concrete form as a way of enlisting popular support for his anti-Stalinist reform programme. The new Programme of the Russian Party, adopted in October 1961, declared in its introduction:

“Today the Communist Party of the Soviet Union (CPSU) is adopting its third Programme, a programme for the building of communist society . . . . The supreme goal of the Party is to build a communist society on whose banner will be inscribed: ‘From each according to his ability, to each according to his needs.”

and ended with the words:

“The Party solemnly proclaims: the present generation of Soviet people shall live in communism!”

A specific timetable was even laid down:

“The material and technical basis of communism will be built up by the end of the second decade (1971-80) . . . The construction of communist society will be fully completed in the subsequent period.”

The “communist principle of distribution according to need” was to be introduced gradually, even before 1980, before being extended generally in the 1980s:

“In the course of the second decade housing will gradually become rent-free for all citizens. Public transport facilities (trolleys, buses, trolley-buses and subways) will become free in the course of the second decade, and at the end of it such public amenities as water, gas and heating will also be free.

In addition to the existing free medical services, accommodation of sick persons at sanatoria and the dispensing of medicines will become gratuitous.

The transition to free public catering (midday meals) at enterprises and institutions, and for collective farmers at work, will begin in the second decade.”

Free housing, public transport, water, gas, heating, medical services and meals at work – this was the promise for the 1980s that the ruling party made to the Russian workers in 1961. Other promises included falling prices and the abolition of income tax. The fact that not one of these has been realised – Russian workers still have to pay for public transport, water, gas, heating and so on -shows that it is not just Western politicians who make promises that they don’t – in fact can’t – keep.

One of the first things Gorbachev had to do after he became Party leader in 1985 was to admit failure in this respect. As he told the 27th Party Congress held in February 1986:

“Much has changed in our life in the quarter of a century since the adoption of the Third Party Programme. New historical experience has been accumulated. Not all of the estimates and conclusions turned out to be correct. The idea of translating the tasks of the full-scale building of communism into direct practical action has proved to be premature. Certain miscalculations were made, too, in fixing deadlines for the solution of a number of concrete problems.”

He went on to denounce “simplistic ideas about the ways and period of time for carrying out the tasks of communist construction” and to declare that ”as for the chronological limits in which the Party’s targets are to be attained, they do not seem to be needed”; all that could be said on this was that these targets would be achieved after the end of the present century.

Gorbachev was announcing, in other words, that the establishment of “communism” in Russia was being postponed indefinitely. More in fact, since his alternative to Khrushchev’s “construction of communist society” as a mirage to hold before the Russian people — perestroika — amounts to a virtual abandoning of communism as a goal. The essence of perestroika, which is merely the Russian word for restructuring, is the gearing of production of individual state enterprises more to the profitable market demand than hitherto, involving in particular a price reform which, with the ending of state subsidies, is likely to mean a rise — rather than a fall towards zero, as promised by Khrushchev —in the price of many goods and services. Gorbachev said so explicitly at the special Party conference held at the end of June this year:

“The price reform cannot fail to affect retail prices. Today the retail price of many food products, notably that of meat and milk, is considerably lower than the actual cost of producing them, lower than the state’s procurement price. The state is compelled to cover this difference in the form of a subsidy. That is not a normal situation. It undermines the incentive for producing these products and gives rise to a wasteful attitude, especially towards bread.

We know all this perfectly well, comrades. It is absolutely necessary to resolve this problem, no matter how difficult it may be and no matter what doubts and fears it may create at first glance.

Here is our approach: the funds which the state is paying out as subsidies today will be handed over in full to the population as compensation.”(Financial Times, 29 June 1988)

In other words, instead of free services and falling prices being subsidised as a supposed transition to “the communist principle of distribution according to need”, both prices and wages are going to be allowed to rise, so forcing workers to buy what they need at a price corresponding to economic cost as determined by the operation of market forces. Money-commodity relations are to be strengthened rather than gradually abolished, as envisaged in the 1961 Party Programme. Perestroika, in fact, represents a complete repudiation of this perspective.

So where does this leave “communism”, or rather the free distribution by the Russian ruling class to its workers of goods and services? This goal now seems to have been shelved. The original version of the Party Programme adopted at the 22nd Party Congress in 1961 declared that “with the transition to the single form of people’s property and the communist system of distribution, commodity-money relations will become economically outdated and will wither away”. However the revised version adopted, under Gorbachev, at the 27th Party Congress in 1986 affirmed market relations to be inherent to the Russian social system (as indeed they are).

Propagandists for Gorbachev’s reforms go out of their way to emphasise that the goal is now a society in which the market will still exist. Abel Aganbegyan, a top economic adviser to Gorbachev and one of the theorists of perestroika, speaks in his recent book The Challenge: Economics of Perestroika of achieving in the 21st century, not the free distribution promised by Khrushchev for the 1980s and 90s, but “the full supply to the market of all the sought-after goods in order to ensure the full satisfaction of demand”. Another supporter of Gorbachev, Fedor Burlatsky, who in his time was also a  propagandist for Khrushchev, now criticises Khrushchev for having wanted to “leap” into communism. In an article this April in Literaturnaya Gazeta (translated into English and published in the June issue of Marxism Today) he contrasted “state socialism”, of which he sees Khrushchev’s “communism” as a variant, with what he calls “public, self-managing socialism” which he defines as “the planned commodity economy based on individual cost-accounting by enterprises”.

Though they have not done so yet, the Russian Party may end up embracing the same position as their Chinese counterparts who have also made a U-turn on this issue and who now see the “socialist” (in reality, state capitalist} stage, with commodity-production and market relations, lasting for another hundred years.

“In the latest attack on Stalin, the Shanghai journal Shu Lin carried an article attacking him for pressing too rapidly the transition from socialism to communism . . . Nowadays, the article said, China was only at the beginning of a 100-year socialist stage which was laying the foundation for the final realisation of Communism – only hazily defined even by Deng Xiaoping, the senior leader.” (Independent, 27 July 1988)

By that time the workers of the world should long have overthrown both the Russian and Chinese ruling classes and themselves have established a socialist (or communist, for the two words mean exactly the same thing} society based on common ownership and democratic control in which wealth will be produced simply as useful products to satisfy needs and no longer as commodities to be bought and sold on a market.

Adam Buick

The Soviet State - Part 2 (1962)

From the September 1962 issue of the Socialist Standard

Link to Part 1.

The Russian State is powerful. Russian workers would be the first to agree with this, for their dependence upon the State as their employer is the measure of the State’s power over them. Again, the Communists may not agree that there is anything undesirable in this, but what did Lenin write about it in his book State and Revolution? “While the State exists there is no freedom, when there will be freedom there will be no state.”

There cannot be much of Lenin’s sort of freedom in Russia today, when the State has its fingers in every pie. Consider, for example, the Twenty Year Plan, recently published (Moscow, 1961) amidst much clamour, which promised free housing, transport and food to the Russian workers sometime between now and 1980. When this programme (a better word for it than “Plan”) is stripped of the ballyhoo, there is no difficulty in seeing it for what it is—a familiar document of Capitalism.

In Management of the National Economy and Planning, the statement: “The sphere of material production is the main sphere in the life of society” is the key to the situation which is illustrated by the following quotations:

“The Party attaches prime importance to the more effective investment of capital, the choice of the most profitable and economical trends in capital construction, achievement everywhere of the maximum growth of output per invested rouble, and reduction of the time-lapse between investment and return. It is necessary continuously to improve the structure of capital investments and to expand that portion of them which is spent on equipment, machinery and machine tools.” (Page 71).

“It is necessary for enterprises to play a substantially greater part in introducing the latest machinery.” (Page 73).

These passages leave no doubt that the Soviet government is as much concerned as any of its counterparts with the need to accumulate capital. And capital accumulation, let us remember, means capitalism. It means Capitalism in Great Britain and the U.S.A.—and the U.S.S.R. How is the Russian worker to be persuaded to pull his weight in making “more effective use of capital investment” and the rest? Why, in just the same way as the British or American worker is sometimes persuaded :

“In the process of Communist construction economic management will make use of material and moral incentives for high production figures.” (Page 73).

And to do all this, there is the intricate machinery of checkers and chasers, money grubbers and ledger slaves, all being urged to work harder and better:

“There must be a continuous improvement in rate setting, the system of labour payments and bonuses, in the financial control over the quantity and quality of work, in the elimination of levelling, and the stimulation of collective forms of incentives raising the interest of each employee in the high efficiency of the enterprise as a whole. It is necessary in communist construction to make full use of commodity-money relations in keeping with their new meaning in the Socialist period. In this, such instruments of economic development as cost accounting, money, prices, production costs, profit, trade, credit and finance play a big part.” (Page 74).

The only reference to Communist society in this section is as follows:

“When the transition to one Communist form of peoples’ property and the Communist system of distribution is completed, commodity-money relations will become economically outdated and will wither away.”(Page 74).

This is not explained until the next section of the programme:

“The task will be effected by (a) raising the individual payments of working people according to the quantity and quality of their work, coupled with reduction of all retail prices and abolition of taxes paid by the people; (b) increase of the public funds distributed among members of society irrespective of the quantity and quality of their labour, that is, free of charge, (education, medical treatment, pensions, maintenance of children at children’s institutions, transition to cost-free use of public amenities, etc.) “(Page 75).

This list is amplified later to cover housing, public services, public transport, holiday homes, public catering (mid-day meals).

Taxes

The programme may be ponderously worded, but its implied promises to abolish taxes, reduce prices and make public amenities free, are the stuff which wins by-elections in countries like England. Apart from that, what are they worth? The “abolition of taxes paid by the people” is only possible where the State is the sole realiser of surplus value, so that it can utilise part of the surplus for the running of the public services. Talk of “free services” is misleading and meaningless, because either the State has to pay the workers in wages to cover these services, or provide them directly, which may be cheaper because it can centrally plan and allocate expenditure. The State can budget more or less exactly because it knows that its expenditure is to be taken from existing and known funds, and not from an unknown income, such as fares payments, gas and electricity consumption.

Every “free” State service is a cost to the State as a whole. The plan for public catering, connected as it is to the prices the Soviet State must pay to the collective farms (Kolkhozes), is obviously meant to be financed in part, at any rate, in this way:

“It is essential that the level of state purchasing prices encourages the Kolkhozes to raise labour productivity and reduce production expenses, since greater farm output and lower production costs are the basis of greater incomes for the Kolkhozes.” (Page 68).

Now the main part of production expenses is made up of wages, so that if this section means anything, it is that the Russian farm workers will be expected to produce more for the same pay. A finer example of capitalist sophistry would be hard to find. This applies, too, on the industrial field:

“Technical progress and better production organisation must be fully utilised to increase labour productivity and reduce production costs at every enterprise. This implies a higher rate of increase in labour productivity as compared with remuneration, better rate fixing, prevention of loss of working time, and operation on a profitable basis in all sectors of production.” (Page 62).

Anyway, prices are only to come down (if at all) under certain circumstances:

“Prices must, to a growing extent, reflect the socially-necessary outlays of labour, ensure return of production and circulation expenditures and a certain profit for each normally operating enterprise. Systematically, economically justified price reductions based on growth of labour productivity and reduction of production costs are the main trend of the price policy in the period of Communist construction.” (Page 75).

And the entire programme is summed up by a passage which would be applauded at any Lord Mayor’s banquet at the Mansion House:

“It is necessary to promote profitable operation of enterprises, to work for lower production costs and higher profitability.” (Page 74).

Commodity production

This would be approved in the City of London because in this country wealth is produced for profitable sale—that is, it takes the form of commodities. The Russian State is urging the “. . . profitable operation of enterprises . . .” because in the U.S.S.R. also, wealth is produced as commodities. Stalin, as we saw in part 1 of this article, admitted that the Soviet Union “. . . has not abolished commodity production . . .” and went on, as he had to. to hedge this statement round with qualifications. But Marx was quite clear on the matter. The opening words of Capital read: “The wealth of a community in which the Capitalist mode of production prevails, appears as an immense collection of commodities.”

Marx’s analysis is still valid. Commodity production means Capitalism, whether it is in this country or anywhere else, including Russia.

What can we conclude from the Twenty Year Plan and from the other evidence which seeps through the Iron Curtain? The Soviet Union seems to be trying to become an ever-bigger monolith of an intensely automated, super-efficient, high-powered production machine. Such a nation must generate something of a momentum and values of its own. The Russian workers are caught up in a system which dictates its own terms. The Russians believe that this is Communism and presumably will go on believing so until Capitalism itself wakes them up.

Then they will realise that all the talk about the “all-round, harmonious development of the individual” and a “truly rich spiritual culture” (page 97) is so much humbug. Such concepts cannot flourish in a society that glories in production norms, because it produces people with a production norm mentality.

Alienation

The culture of a people is inseparable from its work. But Capitalism, in Russia and elsewhere, separates work from culture; for most of its people, work is an expenditure of their labour power which they must go through to get their living wage. It has nothing to do with culture and this fact is one of the chief reasons for social illness in a highly industrialised society. The shortening of the working day and the intensification of labour go hand in hand. But the increasing mechanisation and automation of industry must create a void between the worker and the object of his work; and what sort of culture came out of a void? “What, then, constitutes the alienation of labour?” says Marx. “. . . the fact that labour is external to the worker, i.e., that it does not belong to his essential being; that in his work, therefore, he does not affirm himself but denies himself.” (Economic and Philosophic Manuscripts of 1844), Moscow, 1959, page 72.

It is the intention of the Soviet Union to outpace the United States in production; the only way to do this is to outpace them in the techniques of exploitation; but the result of this in America has been this very alienation—in an aggravated form—that Marx wrote about in 1844, and has been further commented upon by others since then.

The British constitution (what there is of it) does not say that the United Kingdom is a capitalist State, but we know that it is because the evidence says so. In the same way, whatever the Soviet: Constitution may say, the evidence says that Russia is a capitalist nation. As long as it remains so, the anomalies and problems of Capitalism will be visited upon its people.

We will not need a constitution to tell us when Socialism is established, because Socialism is a world in which “the Government of people is replaced by the administration of things,” where the whole object is to make men and women masters of themselves—for they have had masters too long.

Ian Jones

 

(Concluded.)