Effect of the Russian Government's currency changes (1948)

From the January 1948 issue of the Socialist Standard

The Economist (20/12/47) in an article on the Russian Government’s financial changes summarises the effect as follows :

“The main effect of the reform is a redistribution of purchasing power, primarily between towns and countryside, in favour of the town. In the towns, the highest stratum of the privileged bureaucracy and intelligentsia has been shorn of some of its power to snatch scarce goods and amenities of life from the mass of the employees and workers. It would, however, be an exaggeration to say that Soviet policy has now gone hack to the uravnilovka, the egalitarian principles of the early years of the Soviet regime. What is being redressed is a social balance that has been gravely upset by the war. The reform eliminates the gross inequalities that have spontaneously grown up until recently, and that, moreover, the rulers could not but tolerate or even encourage. Having now done away with these anomalies, the Government continues to base the plans for the economic development of the country on the accepted system of incentive wages and salaries.

“This conclusion emerges clearly from a brief analysis of the new wages and prices policy embodied in the reform. ‘While the currency reform is being effected,’ says the decree signed by Stalin and Zhdanov, ‘the wages of workers and employees, as well as the incomes of peasants from deliveries to the State, and other earned incomes of all sections of the population, will not be affected by the reform. They will be paid in the new currency at the previous rates.’ The purchasing power of workers and employees will thus be relatively strengthened by comparison with the purchasing power of the peasantry. But the differential scale of wages and salaries remain in force. The reform of wages adopted early this year (see the Economist, of March 22nd and 29th, 1947) provided for a drastic extension of incentive wages ; it raised the minimum rates of output per worker by 20 to 25 per cent., and it replaced time rates by piece rates in those branches of industry and in agriculture where time rates had still been prevalent. The Stakhanovite has forfeited cash and savings which would have given him an enormous start over his less fortunate or less industrious fellow-workers in the competition for scarce goods ; but he is still able to recoup himself and to maintain a relatively high standard of living if he goes on beating records in output. The present reform is likely to make the system of incentive wages more, and not less effective than it has been hitherto.”

Incentive and initiative (1974)

From the Special 300th issue of The Western Socialist

Link to Canned profits

You’ve got to have incentive, they tell us again and again. Without incentive to better oneself life would not be worth living. Capitalism, they argue, offers real incentive and opportunities for initiative whereas socialism would kill any ambition to get ahead. If we knew we had our needs taken care of who would want to work? We’d all become lazy and goof off from the job. General living conditions would deteriorate fast. Why, they go on, even in Communist countries they have discovered this truth and offer the workers all sorts of incentive plans.

Now the most surprising thing about this sort of philosophy is that it has stood up so well through the decades, despite its obvious, even glaring limitations. One could ask some embarrassing questions, such as: You say that once you knew that your needs and wants were taken care of. you would lose all incentive to work? Then why try to become wealthy? Surely if that were true then it would have to follow that your statistical chances of becoming a bum would rise in direct proportion to your acquisition of wealth. Think of the harm one would do to his own future character by becoming wealthy! And what of your children? By making it possible for them to live a life free from financial pressures and burdens you would be robbing them of their initiative, their incentive, their very birthright. They would most probably wind up as bums, even if wealthy bums.

Nonsense? Poppycock? Of course it is. It is that old argument, so beloved by the theologians, about the camel and the eye of the needle, dressed up in secular clothing. We would suggest that those who believe that yarn tell it to the capitalist class, as well as to Sweeney and to the Marines!

Actually, it is the other way around. It is capitalism that robs most of incentive and initiative. Have you ever wondered why there are so few outstanding performers in any field one can think of? Certainly there must be a large number who live in obscurity and even poverty because there can be room for but a few at the top in capitalist society. But far beyond those in numbers are the potential artists, writers, musicians, scientists who never got off the ground because they are compelled, first of all, to earn a living for self and family. Nor let us forget the potential greats whose lives have been snuffed out in capitalism’s wars.

But now let us look for a moment at that hook that is so frequently thrown at us about the so-called Communist countries discovering the value of incentive and initiative. The trouble with that argument is that it is nothing new with them. As far back as Lenin's times the Soviet Union had an incentive system known as the New Economic Policy In which private enterprise was encouraged. Later, In Stalin's times. In the build-up of heavy Industry, an incentive plan known as Stakhanovism was introduced. Workers received financial rewards and national recognition by improving their performances and output on the job. In this way the expected output could be raised and the degree of exploitation of all the workers increased. Today, in Russia and throughout the world of state-capitalist, so-called Communism, all sorts of incentive, or carrot-on-the-end-of-a-stick plans are offered the workers. Just as in the avowedly capitalist West. Under capitalism—whatever the variety—a few stand to get ahead and it is the few who are touted and whose praises are sung. The millions, however, remain in poverty never quite being able to reach that dangling carrot.

Yes, it will be different under socialism. Mass production techniques will be used to take care of the needs of the population rather than to enrich a few. When the pressures of providing the necessities of life itself are removed all restrictions on the fulfillment of one’s potentials will be gone. The world will belong to all mankind. There will be nowhere for anybody who wants to become great to go but up.

Link to In the meantime

A Letter from Russia (1936)

From the January 1936 issue of the Socialist Standard

(The letter below is translated from “Here sulo," an Esperanto journal published in Paris. The letter is dated November 15th, 1935, and is written from Russia. Owing to the savage repression of Socialist and other opponents of the Communist Party, the name and address of the writer are not given. The letter is useful as a reminder that independent views still gain expression in spite of the Dictatorship.')

Although I do not doubt that you certainly have sent me “heretical" literature, yet, if by chance this letter reaches you, it will show that I have received nothing from you for the past two months— absolutely nothing. I should like to pour out my indignation concerning this grave-like home of orthodoxy in which I am compelled to live—with a mask over my face. You will understand that the more indignant one may be, the more necessary it is outwardly to exhibit approval of the regime, and to cry loudly on every occasion, “Long Live Stalin the Great!” But this pouring out of indignation would avail nothing, and I know that you prefer concrete, exact facts and figures.

Therefore, you will find on the other side a table, which I compiled from the most trustworthy sources and which relates to prices at the beginning of October. You can prepare a similar table of prices in Paris, and in that way will be able to judge the standard of living of the Soviet working-class as it is eighteen years after its “emancipation.” [This table, and a similar one compiled for France, are excluded for reasons of space. They show that average wages in Russia will buy much less food than can be bought by average wages in France. The comparison is, however, incomplete, because it does not take into account the low rents in Russia and the services provided free of cost.— Editorial Committee.]

However, I cannot refrain from saying that this low standard of living is not the worst side of our “socialist" regime; at least, so far as I myself am concerned. In the main, I long for freedom of speech and of meeting; I am sick to death with. “officialism." But— and that possibly will be the most terrible news to you — more and more people here lose the desire for liberty: the new generation does not even understand what liberty means to you and me. Its chief care and desire is only to follow precisely the instructions from the Kremlin.

In the schools they are shamelessly reintroducing the old, traditional method of teaching, with strict discipline for the scholars. And it will appear to you very characteristic that there is great agitation to put all the scholars into uniforms. Soon our schools will be like barracks. In the Army also, discipline becomes more and more strict. Recently, they even re-established the old ranks, so that “Comrade" Vorosilov is now a Marshal! In every way they popularise him by means of articles and pictures. On the specimen postcard accompanying this letter you can admire his fat, jovial and self-satisfied face, and his breast decorated with eight orders.

What also characterises our present régime is the widespread campaign of so-called “udamiks," whose task is to speed-up production and secure a record output.

The new kind of exploitation under our State capitalism has reached such a degree that in some places workers, in their resentment, have attacked these record-breakers. Of course, the result has been that the suppression has been intensified. I knew working conditions in Czarist times, and can assure you that the working-class were less driven then than now (literally “their sweat was more precious then than now ”).

Not only was their sweat more precious, but their lives also. With regard to that, judge for yourself from the following information, which is printed in black and white in Izvestia, on November 10th, 1935. Nozdrin, a railway conductor, was condemned to death and executed because he caused a collision between two trains. Note that no lives were lost, and that the accident occurred between goods trains. Under the Czarist regime such a monstrous punishment would not have been possible, nor, I am sure, would it be possible in any other country. Our technical experts are more heartless than aristocrats or plutocrats.

Possibly it would be wiser for me to forget these things, ignore what is around me, and simply enjoy the privileged situation which I personally happen to have. But I just cannot forget that we made a revolution in order to stop the exploitation of men by men, and that the result is quite different from what we aimed at. If only our experience could teach the Western working-class! But it seems not so, as our exploiters are still considered by you to be revolutionaries.

Dear comrade, pardon the bitter tone of my letter, and only remember this: on no account and at no time should workers resign the right of free speech and of meeting freely; under no excuse and in no circumstances ought they to consent to their trade unions and co-operative movements becoming part of the State apparatus, and consequently instruments in the hands of exploiting leaders; no-how should they permit the re-establishment, under any kind of guise whatsoever, of that which aims at destroying the revolution.

What's the Russian for "blackleg"? (1985)

From the November 1985 issue of the Socialist Standard

Conservatives who fell for Thatcher's conveniently distorted version of "Victorian values" may be gratified to learn that the Russian government recently commemorated one of that country's great exponents of hard work and dedicated patriotism.

In August 1935 a mining team in the Donbas, led by Alexei Stakhanov, cut 102 tons of coal in one six-hour shift. (Or so it was reported; some accounts doubt that it happened at all, or was any more than a propaganda stunt dreamed up by the Stalinist rulers of the time.) This tonnage was about 14 times the norm of the shift (in Great Britain, output per man shift was then about 1.15 tons) and it resulted from Stakhanov devising a more efficient division of labour for his team, separating the processes of cutting coal from that of propping the shaft and assigning each to different workers.

This achievement was immediately welcomed by the Kremlin as an example to other Russian workers, who were being urged to give their all to the Stalin government's drive to overtake the production of western capitalism. Anyone who matched Stakhanov's feat was named, in his honour, as a Stakhanovite and the movement was quickly given official blessing. In November 1935, Stalin himself told the First All Union Conference of Stakhanovites that they were:

. . . a movement which is smashing the old technical standards, because they are inadequate, which in a number of case is surpassing the productivity of labour of the foremost capitalist countries, and is thus creating the practical possibility of further consolidating socialism in our country . . .   

Within six months, some industries had as much as a quarter of their workforce in the movement. All over Russia, workers were hailed as heroes of the tractor factory, or heroines of the cowshed or the beet field. The apex of achievement was to be graded a member of the Brigade of Socialist Labour, or even better—such was the Kremlin's distortion of the dictionary of socialism—the Brigade of Communist Labour. There was, as we might expect, rather more to it than that, in this country which was supposed to be "consolidating socialism" the Stakhanovites were motivated by the established capitalist incentives of material advantages. They were rewarded with special bonuses which could yield a wage ten or 15 times the basic, with better housing, recreational facilities and the like.

The official version of the movement was that it was a spontaneous expression of devotion to the concept of socialism in one country and a selfless determination to see it triumph over the hostile capitalist world outside. It is nearer the truth to say that the Stakhanovites were deliberately encouraged by the Party as a pressure group for a general increase in productivity—or in other words a general intensifying of exploitation. (In other countries, another name for them might have been blacklegs). Far from being spontaneous, the Stakhanovites were carefully selected for stardom and then, in a self-fulfilling prophecy, set up with specially favourable working conditions to give them the best chance of turning out higher production statistics. Managers were naturally keen on the idea, which reflected well on them, and were not above a little  illicit adjustment of the books (just as production control managers in this country have been known to fiddle quota to ensure the highest possible production bonus) in order to have some of their workforce admitted to the ranks of the movement.

The Stakhanovites came into this because, by averaging their production against that of the rest of the workers, it was possible to impose an increase in production norms—to demand that more be produced in the same working time. During 1936, norms were raised in every industry—for coal they went up between 22 per cent and 27.5 per cent; for iron and steel between 13 per cent and 20 per cent; for textiles between 35 per cent and 50 per cent; for building between 54 per cent and 80 per cent; and so on. Like a mass panic, the preoccupation with production quotas took hold and spread, and norms proliferated until there were literally millions of them laying down how much Russian workers should turn out in a given time. It is easy to imagine the glorious complexities this must have created for the bureaucrats, the smug satisfaction of the Stakhanovites, but what fear and anxiety for the ordinary workers. It is less easy to imagine how this elitist, exploitative insult could have been passed off as socialism, as a society where each will produce according to ability and consume according to need. In any case the norms were often as crazy and illusory as the propaganda behind them; during 1937/8 some 60 per cent of Russian workers could not meet their quota, let alone come up to the Stakhanovite standards.

This harassment, on top of what workers expect as the everyday burden of exploitation, was imposed on the Russian workers with scant opposition from, and often with active support of, their trade unions. During Stalin's rule (and of course it is still so today) the official line was that, as Russia was a workers' state, the workers did not need to be protected from it. The unions role was to lubricate their members' exploitation by stimulating production, organising something chillingly called "socialist competition" in the workplace, ensuring that the contributions kept coming in for the "voluntary" state bonds. Seventeen years elapsed between the 9th and 10th congresses of Russian trade unions, during which time the screw of exploitation was tightened by measures such as the abolition of the seven hour day and the laying down of harsh penalties for absenteeism and lateness.

In spite of everything, the Russian workers did not take the Stakhanovite insult lying down. There was much resentment at the attention paid to them, when their apparently higher production was due to unusually favourable conditions and in any case resulted from the joint efforts of their anonymous, unhonoured, work mates. There was anger also at the privileges reserved for the Stakhanovites. In the time honoured tradition of Luddism, there was some sabotage of production and some cases of assault, even perhaps of murder, of Stakhanovites. Reality was, then, nastily different from Stakhanov's airy boast that "For the Soviet people work has become a pleasure".

For fifty years, Stakhanov's image has persisted as an example to the rest of the workers to co-operate enthusiastically in their being robbed of the fruits of their labour. Russian television, commemorating the movement's anniversary, emphasised the continuing usefulness of the Stakhanovite principles and Donetsk miners agreed to put in some extra work as their contribution to the celebrations. Gorbachev recently warned industrial officials that they would be sacked if they did not find new ways of increasing output instead of relying on injections of state investment. "We cannot and will not support those leaders who are oriented towards previous ways, old fashioned norms" he said. Hard work; moderate wages; patriotism; a devotion to the interests of the class which represents us; these are, and have long been, of value to the capitalist class throughout the world. That is why Thatcher launched her campaign about "Victorian values". It was why the employers in this country welcomed the hysteria of "I'm Backing Britain" in the 1960s. It is why the capitalist media praise the "common sense" of the workers who volunteer for wage cuts and harder work so that their employers' profits may survive.

These similarities between Russia and other, avowedly capitalist, states can be explained only on the understanding that all of them operate under the same social system. Whatever superficial differences there are between one country and another capitalism, with its social structure based in ownership by one class and exploitation of the other, exists in Russia just as in America, Britain, Germany, Japan . . . And no class in human society can hope to achieve its emancipation by tightening the screws on itself.

Ivan