From the December 1965 issue of the Socialist Standard
Those who have been following the discussion of this question in our columns may be interested in two further pieces of information. The first is another article by Liberman, in the Sunday Times of October l0th. As to the origin of profits Liberman repeats the same incorrect arguments he gave to the Daily Worker correspondent. But there are two passages worth comment.
Arguing against the suggestion that Russia is “returning” to profit-making, he points out:
“Our enterprises have been driving for cash profits since 1921, that is, for more than 40 years.”
Quite! Since it developed there, capitalism has never ceased to exist in Russia. For most of this period, however, cash profits played a minor role in regulating production. Liberman complains:
“The significance of profit in the Soviet Union was reduced because the law of value was ignored to a certain extent. This law was incorrectly interpreted by certain Soviet economists as a sort of unpleasant hang-over of capitalism which supposedly had to be got rid of as quickly as possible.”
Naturally the law of value will disappear in socialist society, where production will be for use. Marxian terminology, which by a peculiar historical accident had been inherited by the rulers of Russia, has proved a nuisance to them on this point. At first their theoreticians argued that the law of value would continue to exist in the transition from capitalism to socialism but would wither away before the advent of socialism. These are the economists Liberman criticises. This was changed in the early 1940’s when it was baldly announced that in future the law of value would continue to operate in a socialist society! Liberman is merely a product of this change: perhaps he genuinely doesn’t know that the Marxian concepts he uses apply exclusively to capitalist society.
The second item is from The Times of October 18th under the headline LOANS TO REPLACE GRANTS IN RUSSIA, Garbuzov, the Finance Minister, suggested, says the report:
“financing a substantial share of the nation’s investment, possibly as much as half, by long-term bank loans instead of outright interest-free grants out of the Government budget as in the past.”
This change by encouraging the State enterprises to make enough profit to be able to pay the interest charges would bring the financing of the nationalised industries in Russia nearer to the British system.