Economic Problems of Socialism in the U.S.S.R.
To the Participants in the Economic Discussion
Remarks on Economic Questions Connected With the November
I have received all the materials on the economic
discussion arranged to assess the draft textbook on political economy.
The material received includes the "Proposals for the Improvement of
the Draft Textbook on Political Economy," "Proposals for the
Elimination of Mistakes and Inaccuracies" in the draft, and the
"Memorandum on Disputed Issues."
On all these materials, as well as on the draft
textbook, I consider it necessary to make the following remarks.
1. Character of Economic Laws under Socialism
Some comrades deny the objective character of laws
of science, and of laws of political economy particularly, under socialism. They deny that the laws of political economy reflect
law-governed processes which operate independently of the will of man.
They believe that in view of the specific role assigned to the Soviet
state by history, the Soviet state and its leaders can abolish existing
laws of political economy and can "form," "create," new laws.
These comrades are profoundly mistaken. It is
evident that they confuse laws of science, which reflect objective
processes in nature or society, processes which take place
independently of the will of man, with the laws which are issued by
governments, which are made by the will of man, and which have only
juridical validity. But they must not be confused.
Marxism regards laws of science – whether they be
laws of natural science or laws of political economy – as the
reflection of objective processes which take place independently of the
will of man. Man may discover these laws, get to know them, study them,
reckon with them in his activities and utilize them in the interests of
society, but he cannot change or abolish them. Still less can he form
or create new laws of science.
Does this mean, for instance, that the results of
the action of the laws of nature, the results of the action of the
forces of nature, are generally inavertible, that the destructive
action of the forces of nature always and everywhere proceeds with an
elemental and inexorable power that does not yield to the influence of
man? No, it does not. Leaving aside astronomical, geological and other
similar processes, which man really is powerless to influence, even if
he has come to know the laws of their development, in many other cases
man is very far from powerless, in the sense of being able to influence
the processes of nature. In all such cases, having
come to know the laws of nature, reckoning with them and relying on
them, and intelligently applying and utilizing them, man can restrict
their sphere of action, and can impart a different direction to the
destructive forces of nature and convert them to the use of society.
To take one of numerous examples. In olden times the
overflow of big rivers, floods, and the resulting destruction of homes
and crops, was considered an inavertible calamity, against which man
was powerless. But with the lapse of time and the development of human
knowledge, when man had learned to build dams and hydro-electric
stations, it became possible to protect society from the calamity of
flood which had formerly seemed to be inavertible. More, man learned to
curb the destructive forces of nature, to harness them, so to speak, to
convert the force of water to the use of society and to utilize it for
the irrigation of fields and the generation of power.
Does this mean that man has thereby abolished laws
of nature, laws of science, and has created new laws of nature, new
laws of science? No, it does not. The fact is that all this procedure
of averting the action of the destructive forces of water and of
utilizing them in the interests of society takes place without any
violation, alteration or abolition of scientific laws or the creation
of new scientific laws. On the contrary, all this procedure is effected
in precise conformity with the laws of nature and the laws of science,
since any violation, even the slightest, of the laws of nature would
only upset matters and render the procedure futile.
The same must be said of the laws of economic
development, the laws of political economy – whether in the period of
capitalism or in the period of socialism. Here, too, the laws of
economic development, as in the case of natural science, are objective laws, reflecting processes of economic
development which take place independently of the will of man. Man may
discover these laws, get to know them and, relying upon them, utilize
them in the interests of society, impart a different direction to the
destructive action of some of the laws, restrict their sphere of
action, and allow fuller scope to other laws that are forcing their way
to the forefront; but he cannot destroy them or create new economic
One of the distinguishing features of political
economy is that its laws, unlike those of natural science, are
impermanent, that they, or at least the majority of them, operate for a
definite historical period, after which they give place to new laws.
However, these laws are not abolished, but lose their validity owing to
the new economic conditions and depart from the scene in order to give
place to new laws, laws which are not created by the will of man, but
which arise from the new economic conditions.
Reference is made to Engels' Anti-Dühring, to
his formula which says that, with the abolition of capitalism and the
socialization of the means of production, man will obtain control of
his means of production, that he will be set free from the yoke of
social and economic relations and become the "master" of his social
life. Engels calls this freedom "appreciation of necessity.''1 And
what can this "appreciation of necessity" mean? It means that, having
come to know objective laws ("necessity"), man will apply them with
full consciousness in the interests of society. That is why Engels says
in the same book:
"The laws of his own social action, hitherto
standing face to face with man as laws of nature foreign to, and
dominating him, will then be used with full understanding, and so mastered by him."2
As we see, Engels' formula does not speak at all in
favour of those who think that under socialism existing economic laws
can be abolished and new ones created. On the contrary, it demands, not
the abolition, but the understanding of economic laws and their
It is said that economic laws are elemental in
character, that their action is inavertible and that society is
powerless against them. That is not true. It is making a fetish of
laws, and oneself the slave of laws. It has been demonstrated that
society is not powerless against laws, that, having come to know
economic laws and relying upon them, society can restrict their sphere
of action, utilize them in the interests of society and "harness" them,
just as in the case of the forces of nature and their laws, just as in
the case of the overflow of big rivers cited in the illustration above.
Reference is made to the specific role of Soviet
government in building socialism, which allegedly enables it to abolish
existing laws of economic development and to "form" new ones. That also
The specific role of Soviet government was due to
two circumstances: first, that what Soviet government had to do was not
to replace one form of exploitation by another, as was the case in
earlier revolutions, but to abolish exploitation altogether; second,
that in view of the absence in the country of any ready-made rudiments
of a socialist economy, it had to create new, socialist forms of
economy, "starting from scratch," so to speak.
That was undoubtedly a difficult, complex and
unprecedented task. Nevertheless, the Soviet government accomplished
this task with credit. But it accomplished it not because it supposedly destroyed the existing economic laws and "formed"
new ones, but only because it relied on the economic law that the
relations of production must necessarily conform with the character of
the productive forces. The productive forces of our country, especially
in industry, were social in character, the form of ownership, on the
other hand, was private, capitalistic. Relying on the economic law that
the relations of production must necessarily conform with the character
of the productive forces, the Soviet government socialized the means of
production, made them the property of the whole people, and thereby
abolished the exploiting system and created socialist forms of economy.
Had it not been for this law, and had the Soviet government not relied
upon it, it could not have accomplished its mission.
The economic law that the relations of production
must necessarily conform with the character of the productive forces
has long been forcing its way to the forefront in the capitalist
countries. If it has failed so far to force its way into the open, it
is because it is encountering powerful resistance on the part of
obsolescent forces of society. Here we have another distinguishing
feature of economic laws. Unlike the laws of natural science, where the
discovery and application of a new law proceeds more or less smoothly,
the discovery and application of a new law in the economic field,
affecting as it does the interests of obsolescent forces of society,
meets with the most powerful resistance on their part. A force, a
social force, capable of overcoming this resistance, is therefore
necessary. In our country, such a force was the alliance of the working
class and the peasantry, who represented the overwhelming majority of
society. There is no such force yet in other, capitalist countries.
This explains the secret why the Soviet government was able to smash
the old forces of society, and why in our country the economic law that
the relations of production must necessarily conform with the character
of the productive forces received full scope.
It is said that the necessity for balanced
(proportionate) development of the national economy in our country
enables the Soviet government to abolish existing economic laws and to
create new ones. That is absolutely untrue. Our yearly and five-yearly
plans must not be confused with the objective economic law of balanced,
proportionate development of the national economy. The law of balanced
development of the national economy arose in opposition to the law of
competition and anarchy of production under capitalism. It arose from
the socialization of the means of production, after the law of
competition and anarchy of production had lost its validity. It became
operative because a socialist economy can be conducted only on the
basis of the economic law of balanced development of the national
economy. That means that the law of balanced development of the
national economy makes it possible for our planning bodies to plan
social production correctly. But possibility must not be confused with
actuality. They are two different things. In order to turn the
possibility into actuality, it is necessary to study this economic law,
to master it, to learn to apply it with full understanding, and to
compile such plans as fully reflect the requirements of this law. It
cannot be said that the requirements of this economic law are fully
reflected by our yearly and five-yearly plans.
It is said that some of the economic laws operating
in our country under socialism, including the law of value, have been
"transformed," or even "radically transformed," on the basis of planned
economy. That is likewise untrue. Laws cannot be "transformed," still less "radically" transformed. If they
can be transformed, then they can be abolished and replaced by other
laws. The thesis that laws can be "transformed" is a relic of the
incorrect formula that laws can be "abolished" or "formed." Although
the formula that economic laws can be transformed has already been
current in our country for a long time, it must be abandoned for the
sake of accuracy. The sphere of action of this or that economic law may
be restricted, its destructive action – that is, of course, if it is
liable to be destructive – may be averted, but it cannot be
"transformed" or "abolished."
Consequently, when we speak of "subjugating" natural
forces or economic forces, of "dominating" them, etc., this does not
mean that man can "abolish" or "form" scientific laws. On the contrary,
it only means that man can discover laws, get to know them and master
them, learn to apply them with full understanding, utilize them in the
interests of society, and thus subjugate them, secure mastery over
Hence, the laws of political economy under socialism
are objective laws, which reflect the fact that the processes of
economic life are law-governed and operate independently of our will.
People who deny this postulate are in point of fact denying science,
and, by denying science, they are denying all possibility of
prognostication – and, consequently, are denying the possibility of
directing economic activity.
It may be said that all this is correct and
generally known; but that there is nothing new in it, and that it is
therefore not worth spending time reiterating generally-known truths.
Of course, there really is nothing new in this; but it would be a
mistake to think that it is not worth spending time reiterating certain
truths that are well known to us. The fact is that we, the leading
core, are joined every year by thousands of new and young forces who are ardently desirous of
assisting us and ardently desirous of proving their worth, but who do
not possess an adequate Marxist education, are unfamiliar with many
truths that are well known to us, and are therefore compelled to grope
in the darkness. They are staggered by the colossal achievements of
Soviet government, they are dazzled by the extraordinary successes of
the Soviet system, and they begin to imagine that Soviet government can
"do anything," that "nothing is beyond it," that it can abolish
scientific laws and form new ones. What are we to do with these
comrades? How are we to educate them in Marxism-Leninism? I think that
systematic reiteration and patient explanation of so-called
"generally-known" truths is one of the best methods of educating these
comrades in Marxism.
2. Commodity Production under Socialism
Certain comrades affirm that the Party acted wrongly
in preserving commodity production after it had assumed power and
nationalized the means of production in our country. They consider that
the Party should have banished commodity production there and then. In
this connection they cite Engels, who says:
"With the seizing of the means of production by
society, production of commodities is done away with, and,
simultaneously, the mastery of the product over the producer."3
These comrades are profoundly mistaken.
Let us examine Engels' formula. Engels' formula
cannot be considered fully clear and precise, because it does not
indicate whether it is referring to the seizure by society of all or
only part of the means of production, that is, whether all or only part
of the means of production are converted into public property. Hence,
this formula of Engels' may be understood either way.
Elsewhere in Anti-Dühring Engels speaks of
mastering "all the means of production," of taking possession of "all
means of production." Hence, in this formula Engels has in mind the
nationalization not of part, but of all the means of production, that
is, the conversion into public property of the means of production not
only of industry, but also of agriculture.
It follows from this that Engels has in mind
countries where capitalism and the concentration of production have
advanced far enough both in industry and in agriculture to permit the
expropriation of all the means of production in the country and their
conversion into public property. Engels, consequently, considers that
in such countries, parallel with the socialization of all the means of
production, commodity production should be put an end to. And that, of
course, is correct.
There was only one such country at the close of the
last century, when Anti-Dühring was published – Britain. There
the development of capitalism and the concentration of production both
in industry and in agriculture had reached such a point that it would
have been possible, in the event of the assumption of power by the
proletariat, to convert all the country's means of production into
public property and to put an end to commodity production.
I leave aside in this instance the question of the
importance of foreign trade to Britain and the vast part it plays in
her national economy. I think that only after an investigation of this
question can it be finally decided what would be the future of
commodity production in Britain after the proletariat had assumed power
and all the means of production had been nationalized.
However, not only at the close of the last century,
but today too, no country has attained such a degree of development of
capitalism and concentration of production in agriculture as is to be
observed in Britain. As to the other countries, notwithstanding the
development of capitalism in the countryside, they still have a fairly
numerous class of small and medium rural owner-producers, whose future
would have to be decided if the proletariat should assume power.
But here is a question: what are the proletariat and
its party to do in countries, ours being a case in point, where the
conditions are favourable for the assumption of power by the
proletariat and the overthrow of capitalism, where capitalism has so
concentrated the means of production in industry that they may be
expropriated and made the property of society, but where agriculture,
notwithstanding the growth of capitalism, is divided up among numerous
small and medium owner-producers to such an extent as to make it
impossible to consider the expropriation of these producers?
To this question Engels' formula does not furnish an
answer. Incidentally, it was not supposed to furnish an answer, since
the formula arose from another question, namely, what should be the
fate of commodity production after all the means of production had been
And so, what is to be done if not all, but only part
of the means of production have been socialized, yet the conditions are
favourable for the assumption of power by the proletariat – should the
proletariat assume power and should commodity production be abolished
We cannot, of course, regard as an answer the
opinion of certain half-baked Marxists who believe that under such
conditions the thing to do is to refrain from taking power and to wait
until capitalism has succeeded in ruining the millions of small and
medium producers and converting them into farm labourers and in
concentrating the means of production in agriculture, and that only
after this would it be possible to consider the assumption of power by
the proletariat and the socialization of all the means of production.
Naturally, this is a "solution" which Marxists cannot accept if they do
not want to disgrace themselves completely.
Nor can we regard as an answer the opinion of other
half-baked Marxists, who think that the thing to do would be to assume
power and to expropriate the small and medium rural producers and to
socialize their means of production. Marxists cannot adopt this
senseless and criminal course either, because it would destroy all
chances of victory for the proletarian revolution, and would throw the
peasantry into the camp of the enemies of the proletariat for a long
The answer to this question was given by Lenin in
his writings on the "tax in kind" and in his celebrated "cooperative
Lenin's answer may be briefly summed up as follows:
a) Favourable conditions for the assumption of power
should not be missed – the proletariat should assume power without
waiting until capitalism has succeeded in ruining the millions of small
and medium individual producers;
b) The means of production in industry should be expropriated and converted into public property;
c) As to the small and medium individual producers,
they should be gradually united in producers' cooperatives, i.e., in
large agricultural enterprises, collective farms;
d) Industry should be developed to the utmost and
the collective farms should be placed on the modern technical basis of
large-scale production, not expropriating them, but on the contrary
generously supplying them with first-class tractors and other machines;
e) In order to ensure an economic bond between town
and country, between industry and agriculture, commodity production
(exchange through purchase and sale) should be preserved for a certain
period, it being the form of economic tie with the town which is alone
acceptable to the peasants, and Soviet trade – state, cooperative, and
collective-farm – should be developed to the full and the capitalists
of all types and descriptions ousted from trading activity.
The history of socialist construction in our country
has shown that this path of development, mapped out by Lenin, has fully
There can be no doubt that in the case of all
capitalist countries with a more or less numerous class of small and
medium producers, this path of development is the only possible and
expedient one for the victory of socialism.
It is said that commodity production must lead, is
bound to lead, to capitalism all the same, under al conditions. That is
not true. Not always and not under all conditions! Commodity production
must not be identified with capitalist production. They are two
different things. Capitalist production is the highest form of
commodity production. Commodity production leads to capitalism only if
there is private ownership of the means of production, if labour power
appears in the market as a commodity which can be bought by the
capitalist and exploited in the process of production, and if,
consequently, the system of exploitation of wageworkers by capitalists
exists in the country. Capitalist production begins when the means of production are concentrated in private hands, and
when the workers are bereft of means of production and are compelled to
sell their labour power as a commodity. Without this there is no such
thing as capitalist production.
Well, and what is to be done if the conditions for
the conversion of commodity production into capitalist production do
not exist, if the means of production are no longer private but
socialist property, if the system of wage labour no longer exists and
labour power is no longer a commodity, and if the system of
exploitation has long been abolished – can it be considered then that
commodity production will lead to capitalism all the same? No, it
cannot. Yet ours is precisely such a society, a society where private
ownership of the means of production, the system of wage labour, and
the system of exploitation have long ceased to exist.
Commodity production must not be regarded as
something sufficient unto itself, something independent of the
surrounding economic conditions. Commodity production is older than
capitalist production. It existed in slave-owning society, and served
it, but did not lead to capitalism. It existed in feudal society and
served it, yet, although it prepared some of the conditions for
capitalist production, it did not lead to capitalism. Why then, one
asks, cannot commodity production similarly serve our socialist society
for a certain period without leading to capitalism, bearing in mind
that in our country commodity production is not so boundless and
all-embracing as it is under capitalist conditions, being confined
within strict bounds thanks to such decisive economic conditions as
social ownership of the means of production, the abolition of the
system of wage labour, and the elimination of the system of
It is said that, since the domination of social
ownership of the means of production has been established in our
country, and the system of wage labour and exploitation has been
abolished, commodity production has lost all meaning and should
therefore be done away with.
That is also untrue. Today there are two basic forms
of socialist production in our county: state, or publicly-owned
production and collective-farm production, which cannot be said to be
publicly owned. In the state enterprises, the means of production and
the product of production are national property. In the collective
farm, although the means of production (land, machines) do belong to
the state, the product of production is the property of the different
collective farms since the labour, as well as the seed, is their own,
while the land, which has been turned over to the collective farms in
perpetual tenure, is used by them virtually as their own property, in
spite of the fact that they cannot sell, buy, lease or mortgage it.
The effect of this is that the state disposes only
of the product of the state enterprises, while the product of the
collective farms, being their property,is disposed of only by them. But
the collective farms are unwilling to alienate the products except in
the form of commodities in exchange for which they desire to receive
the commodities they need. At present the collective farms will not
recognize any other economic relation with the town except the
commodity relation – exchange through purchase and sale. Because of
this, commodity production and trade are as much a necessity with us
today as they were, say, thirty years ago, when Lenin spoke of the
necessity of developing trade to the utmost.
Of course, when instead of the two basic production
sectors, the state sector and the collective-farm sector, there will be
only one all-embracing production sector, with the right to
dispose of all the consumer goods produced in the country, commodity
circulation, with its "money economy," will disappear, as being an
unnecessary element in the national economy. But so long as this is not
the case, so long as the two basic production sectors remain, commodity
production and commodity circulation must remain in force, as a
necessary and very useful element in our system of national economy.
How the formation of a single and united sector will come about,
whether simply by the swallowing up of the collective-farm sector by
the state sector – which is hardly likely (because that would be
looked upon as the expropriation of the collective farms) – or by the
setting up of a single national economic body (comprising
representatives of state industry and of the collective farms), with
the right at first to keep account of all consumer product in the
country, and eventually also to distribute it, by way, say, of
products-exchange – is a special question which requires separate
Consequently, our commodity production is not of the
ordinary type, but is a special kind of commodity production, commodity
production without capitalists, which is concerned mainly with the
goods of associated socialist producers (the state, the collective
farms, the cooperatives), the sphere of action of which is confined to
items of personal consumption, which obviously cannot possibly develop
into capitalist production, and which, together with its "money
economy," is designed to serve the development and consolidation of
Absolutely mistaken, therefore, are those comrades
who allege that, since socialist society has not abolished commodity
forms of production, we are bound to have the reappearance of all the economic categories characteristic of capitalism:
labour power as a commodity, surplus value, capital, capitalist profit,
the average rate of profit, etc. These comrades confuse commodity
production with capitalist production, and believe that once there is
commodity production there must also be capitalist production. They do
not realize that our commodity production radically differs from
commodity production under capitalism.
Further, I think that we must also discard certain
other concepts taken from Marx's Capital – where Marx was concerned
with an analysis of capitalism – and artificially applied to our
socialist relations. I am referring to such concepts, among others, as
"necessary" and "surplus" labour, "necessary" and "surplus" product,
"necessary" and "surplus" time. Marx analyzed capitalism in order to
elucidate the source of exploitation of the working class – surplus
value – and to arm the working class, which was bereft of means of
production, with an intellectual weapon for the overthrow of
capitalism. It is natural that Marx used concepts (categories) which
fully corresponded to capitalist relations. But it is strange, to say
the least, to use these concepts now, when the working class is not
only not bereft of power and means of production, but, on the contrary,
is in possession of the power and controls the means of production.
Talk of labour power being a commodity, and of "hiring" of workers
sounds rather absurd now, under our system: as though the working
class, which possesses means of production, hires itself and sells its
labour power to itself. It is just as strange to speak now of
"necessary" and "surplus" labour: as though, under our conditions, the
labour contributed by the workers to society for the extension of
production, the promotion of education and public health, the
organization of defence, etc., is not just as necessary to the working class, now in power, as the
labour expended to supply the personal needs of the worker and his
It should be remarked that in his Critique of the
Gotha Program, where it is no longer capitalism that he is
investigating, but, among other things, the first phase of communist
society, Marx recognizes labour contributed to society for extension of
production, for education and public health, for administrative
expenses, for building up reserves, etc., to be just as necessary as
the labour expended to supply the consumption requirements of the
I think that our economists should put an end to
this in congruity between the old concepts and the new state of affairs
in our socialist country, by replacing the old concepts with new ones
that correspond to the new situation.
We could tolerate this incongruity for a certain period, but the time has come to put an end to it.
3. The Law of Value under Socialism
It is sometimes asked whether the law of value
exists and operates in our country, under the socialist system.
Yes, it does exist and does operate. Wherever
commodities and commodity production exist, there the law of value must
In our country, the sphere of operation of the law
of value extends, first of all, to commodity circulation, to the
exchange of commodities through purchase and sale, the exchange,
chiefly, of articles of personal consumption. Here, in this sphere, the
law of value preserves, within certain limits, of course, the function
of a regulator.
But the operation of the law of value is not
confined to the sphere of commodity circulation. It also extends to
production. True, the law of value has no regulating function in our
socialist production, but it nevertheless influences production, and
this fact cannot be ignored when directing production. As a matter of
fact, consumer goods, which are needed to compensate the labour power
expended in the process of production, are produced and realized in our
country as commodities coming under the operation of the law of value.
It is precisely here that the law of value exercises its influence on
production. In this connection, such things as cost accounting and
profitableness, production costs, prices, etc., are of actual
importance in our enterprises. Consequently, our enterprises cannot,
and must not, function without taking the law of value into account.
Is this a good thing? It is not a bad thing. Under
present conditions, it really is not a bad thing, since it trains our
business executives to conduct production on rational lines and
disciplines them. It is not a bad thing because it teaches our
executives to count production magnitudes, to count them accurately,
and also to calculate the real things in production precisely, and not
to talk nonsense about "approximate figures," spun out of thin air. It
is not a bad thing because it teaches our executives to look for, find
and utilize hidden reserves latent in production, and not to trample
them under foot. It is not a bad thing because it teaches our
executives systematically to improve methods of production, to lower
production costs, to practise cost accounting, and to make their
enterprises pay. It is a good practical school which accelerates the
development of our executive personnel and their growth into genuine
leaders of socialist production at the present stage of development.
The trouble is not that production in our country is
influenced by the law of value. The trouble is that our business
executives and planners, with few exceptions, are poorly acquainted
with the operations of the law of value, do not study them, and are
unable to take account of them in their computations. This, in fact,
explains the confusion that still reigns in the sphere of price-fixing
policy. Here is one of many examples. Some time ago it was decided to
adjust the prices of cotton and grain in the interest of cotton
growing, to establish more accurate prices for grain sold to the cotton
growers, and to raise the prices of cotton delivered to the state. Our
business executives and planners submitted a proposal on this score
which could not but astound the members of the Central Committee, since
it suggested fixing the price of a ton of grain at practically the same
level as a ton of cotton, and, moreover, the price of a ton of grain
was taken as equivalent to that of a ton of baked bread. In reply to
the remarks of members of the Central Committee that the price of a ton
of bread must be higher than that of a ton of grain, because of the
additional expense of milling and baking, and that cotton was generally
much dearer than grain, as was also borne out by their prices in the
world market, the authors of the proposal could find nothing coherent
to say. The Central Committee was therefore obliged to take the matter
into its own hands and to lower the prices of grain and raise the
prices of cotton. What would have happened if the proposal of these
comrades had received legal force? We should have ruined the cotton
growers and would have found ourselves without cotton.
But does this mean that the operation of the law of
value has as much scope with us as it has under capitalism, and that it
is the regulator of production in our country too? No, it does not. Actually, the sphere of operation of the law of value
under our economic system is strictly limited and placed within
definite bounds. It has already been said that the sphere of operation
of commodity production is restricted and placed within definite bounds
by our system. The same must be said of the sphere of operation of the
law of value. Undoubtedly, the fact that private ownership of the means
of production does not exist, and that the means of production both in
town and country are socialized, cannot but restrict the sphere of
operation of the law of value and the extent of its influence on
In this same direction operates the law of balanced
(proportionate) development of the national economy, which has
superseded the law of competition and anarchy of production.
In this same direction, too, operate our yearly and
five-yearly plans and our economic policy generally, which are based on
the requirements of the law of balanced development of the national
The effect of all this, taken together, is that the
sphere of operation of the law of value in our country is strictly
limited, and that the law of value cannot under our system function as
the regulator of production.
This, indeed, explains the "striking" fact that
whereas in our country the law of value, in spite of the steady and
rapid expansion of our socialist production, does not lead to crises of
overproduction, in the capitalist countries this same law, whose sphere
of operation is very wide under capitalism, does lead, in spite of the
low rate of expansion of production, to periodical crises of
It is said that the law of value is a permanent law,
binding upon all periods of historical development, and that if it does
lose its function as a regulator of exchange relations in the second phase of communist society, it retains at this phase of
development its function as a regulator of the relations between the
various branches of production, as a regulator of the distribution of
labour among them.
That is quite untrue. Value, like the law of value,
is a historical category connected with the existence of commodity
production. With the disappearance of commodity production, value and
its forms and the law of value also disappear.
In the second phase of communist society, the amount
of labour expended on the production of goods will be measured not in a
roundabout way, not through value and its forms, as is the case under
commodity production, but directly and immediately – by the amount of
time, the number of hours, expended on the production of goods. As to
the distribution of labour, its distribution among the branches of
production will be regulated not by the law of value, which will have
ceased to function by that time, but by the growth of society's demand
for goods. It will be a society in which production will be regulated
by the requirements of society, and computation of the requirements of
society will acquire paramount importance for the planning bodies.
Totally incorrect, too, is the assertion that under
our present economic system, in the first phase of development of
communist society, the law of value regulates the "proportions" of
labour distributed among the various branches of production.
If this were true, it would be incomprehensible why
our light industries, which are the most profitable, are not being
developed to the utmost, and why preference is given to our heavy
industries, which are often less profitable, and some times altogether
If this were true, it would be incomprehensible why
a number of our heavy industry plants which are still unprofitable and
where the labour of the worker does not yield the "proper returns," are
not closed down, and why new light industry plants, which would
certainly be profitable and where the labour of the workers might yield
"big returns," are not opened.
If this were true, it would be incomprehensible why
workers are not transferred from plants that are less profitable, but
very necessary to our national economy, to plants which are more
profitable – in accordance with the law of value, which supposedly
regulates the "proportions" of labour distributed among the branches of
Obviously, if we were to follow the lead of these
comrades, we should have to cease giving primacy to the production of
means of production in favour of the production of articles of
consumption. And what would be the effect of ceasing to give primacy to
the production of the means of production? The effect would be to
destroy the possibility of the continuous expansion of our national
economy, because the national economy cannot be continuously expanded
with out giving primacy to the production of means of production.
These comrades forget that the law of value can be a
regulator of production only under capitalism, with private ownership
of the means of production, and competition, anarchy of production, and
crises of overproduction. They forget that in our country the sphere of
operation of the law of value is limited by the social ownership of the
means of production, and by the law of balanced development of the
national economy, and is consequently also limited by our yearly and
five-yearly plans, which are an approximate reflection of the
requirements of this law.
Some comrades draw the conclusion from this that the
law of balanced development of the national economy and economic
planning annul the principle of profitableness of production. That is
quite untrue. It is just the other way round. If profitableness is
considered not from the stand-point of individual plants or industries,
and not over a period of one year, but from the standpoint of the
entire national economy and over a period of, say, ten or fifteen
years, which is the only correct approach to the question, then the
temporary and unstable profitableness of some plants or industries is
beneath all comparison with that higher form of stable and permanent
profitableness which we get from the operation of the law of balanced
development of the national economy and from economic planning, which
save us from periodical economic crises disruptive to the national
economy and causing tremendous material damage to society, and which
ensure a continuous and high rate of expansion of our national economy.
In brief, there can be no doubt that under our
present socialist conditions of production, the law of value cannot be
a "regulator of the proportions" of labour distributed among the
various branches of production.
4. Abolition of the Antithesis Between Town and
Country, and Between Mental and Physical Labour, and Elimination of
Distinctions Between Them
This heading covers a number of problems which
essentially differ from one another. I combine them in one section, not
in order to lump them together, but solely for brevity of exposition.
Abolition of the antithesis between town and
country, between industry and agriculture, is a well-known problem
which was discussed long ago by Marx and Engels. The economic basis of
this antithesis is the exploitation of the country by the town, the
expropriation of the peasantry and the ruin of the majority of the
rural population by the whole course of development of industry, trade
and credit under capitalism. Hence, the antithesis between town and
country under capitalism must be regarded as an antagonism of
interests. This it was that gave rise to the hostile attitude of the
country towards the town and towards "townfolk" in general.
Undoubtedly, with the abolition of capitalism and
the exploiting system in our country, and with the consolidation of the
socialist system, the antagonism of interests between town and country,
between industry and agriculture, was also bound to disappear. And that
is what happened. The immense assistance rendered by the socialist
town, by our working class, to our peasantry in eliminating the
landlords and kulaks strengthened the foundation for the alliance
between the working class and the peasantry, while the systematic
supply of first-class tractors and other machines to the peasantry and
its collective farms converted the alliance between the working class
and the peasantry into friendship between them. Of course, the workers
and the collective-farm peasantry do represent two classes differing
from one another in status. But this difference does not weaken their
friendship in any way. On the contrary, their interests lie along one
common line, that of strengthening the socialist system and attaining
the victory of communism. It is not surprising, therefore, that not a
trace remains of the former distrust, not to speak of the former
hatred, of the country for the town.
All this means that the ground for the antithesis
between town and country, between industry and agriculture, has already
been eliminated by our present socialist system.
This, of course, does not mean that the effect of
the abolition of the antithesis between town and country will be that
"the great towns will perish."4 Not only will the great towns not
perish, but new great towns will appear as centres of the maximum
development of culture, and as centres not only of large-scale
industry, but also of the processing of agricultural produce and of
powerful development of all branches of the food industry. This will
facilitate the cultural progress of the nation and will tend to even up
conditions of life in town and country.
We have a similar situation as regards the problem
of the abolition of the antithesis between mental and physical labour.
This too is a well-known problem which was discussed by Marx and Engels
long ago. The economic basis of the antithesis between mental and
physical labour is the exploitation of the physical workers by the
mental workers. Everyone is familiar with the gulf which under
capitalism divided the physical workers of enterprises from the
managerial personnel. We know that this gulf gave rise to a hostile
attitude on the part of the workers towards managers, foremen,
engineers and other members of the technical staff, whom the workers
regarded as their enemies. Naturally, with the abolition of capitalism
and the exploiting system, the antagonism of interests between physical
and mental labour was also bound to disappear. And it really has
disappeared in our present socialist system. Today, the physical
workers and the managerial personnel are not enemies, but comrades and friends, members of a single collective body
of producers who are vitally interested in the progress and improvement
of production. Not a trace remains of the former enmity between them.
Of quite a different character is the problem of the
disappearance of distinctions between town (industry) and country
(agriculture), and between physical and mental labour. This problem was
not discussed in the Marxist classics. It is a new problem, one that
has been raised practically by our socialist construction.
Is this problem an imaginary one? Has it any
practical or theoretical importance for us? No, this problem cannot be
considered an imaginary one. On the contrary, it is for us a problem of
the greatest seriousness.
Take, for instance, the distinction between
agriculture and industry. In our country it consists not only in the
fact that the conditions of labour in agriculture differ from those in
industry, but, mainly and chiefly, in the fact that whereas in industry
we have public ownership of the means of production and of the product
of industry, in agriculture we have not public, but group,
collective-farm ownership. It has already been said that this fact
leads to the preservation of commodity circulation, and that only when
this distinction between industry and agriculture disappears, can
commodity production with all its attendant consequences also
disappear. It therefore cannot be denied that the disappearance of this
essential distinction between agriculture and industry must be a matter
of paramount importance for us.
The same must be said of the problem of the
abolition of the essential distinction between mental labour and
physical labour. It, too, is a problem of paramount importance for us. Before the socialist emulation movement assumed mass
proportions, the growth of our industry proceeded very haltingly, and
many comrades even suggested that the rate of industrial development
should be retarded. This was due chiefly to the fact that the cultural
and technical level of the workers was too low and lagged far behind
that of the technical personnel. But the situation changed radically
when the socialist emulation movement assumed a mass character. It was
from that moment on that industry began to advance at accelerated
speed. Why did socialist emulation assume the character of a mass
movement? Because among the workers whole groups of comrades came to
the fore who had not only mastered the minimum requirements of
technical knowledge, but had gone further and risen to the level of the
technical personnel; they began to correct technicians and engineers,
to break down the existing norms as antiquated, to introduce new and
more up-to-date norms, and so on. What should we have had if not only
isolated groups, but the majority of the workers had raised their
cultural and technical level to that of the engineering and technical
personnel? Our industry would have risen to a height unattainable by
industry in other countries. It therefore cannot be denied that the
abolition of the essential distinction between mental and physical
labour by raising the cultural and technical level of the workers to
that of the technical personnel cannot but be of paramount importance
Some comrades assert that in the course of time not
only will the essential distinction between industry and agriculture,
and between physical and mental labour, disappear, but so will all
distinction between them. That is not true. Abolition of the essential distinction between industry and agriculture
cannot lead to the abolition of all distinction between them. Some
distinction, even if inessential, will certainly remain, owing to the
difference between the conditions of work in industry and in
agriculture. Even in industry the conditions of labour are not the same
in all its branches: the conditions of labour, for example, of coal
miners differ from those of the workers of a mechanized shoe factory,
and the conditions of labour of ore miners from those of engineering
workers. If that is so, then all the more must a certain distinction
remain between industry and agriculture.
The same must be said of the distinction between
mental and physical labour. The essential distinction between them, the
difference in their cultural and technical levels, will certainly
disappear. But some distinction, even if inessential, will remain, if
only because the conditions of labour of the managerial staffs and
those of the workers are not identical.
The comrades who assert the contrary do so
presumably on the basis of the formulation given in some of my
statements, which speaks of the abolition of the distinction between
industry and agriculture, and between mental and physical labour,
without any reservation to the effect that what is meant is the
abolition of the essential distinction, not of all distinction. That is
exactly how the comrades understood my formulation, assuming that it
implied the abolition of all distinction. But this indicates that the
formulation was unprecise, unsatisfactory. It must be discarded and
replaced by another formulation, one that speaks of the abolition of
essential distinctions and the persistence of inessential distinctions
between industry and agriculture, and between mental and physical
5. Disintegration of the Single World Market and Deepening of the Crisis of the World Capitalist System
The disintegration of the single, all-embracing
world market must be regarded as the most important economic sequel of
the Second World War and of its economic consequences. It has had the
effect of further deepening the general crisis of the world capitalist
The Second World War was itself a product of this
crisis. Each of the two capitalist coalitions which locked horns in the
war calculated on defeating its adversary and gaining world supremacy.
It was in this that they sought a way out of the crisis. The United
States of America hoped to put its most dangerous competitors, Germany
and Japan, out of action, seize foreign markets and the world's raw
material resources, and establish its world supremacy.
But the war did not justify these hopes. It is true
that Germany and Japan were put out of action as competitors of the
three major capitalist countries: the U.S.A., Great Britain and France.
But at the same time China and other, European, people's democracies
broke away from the capitalist system and, together with the Soviet
Union, formed a united and powerful socialist camp confronting the camp
of capitalism. The economic consequence of the existence of two
opposite camps was that the single all-embracing world market
disintegrated, so that now we have two parallel world markets, also
confronting one another.
It should be observed that the U.S.A., and Great
Britain and France, themselves contributed – without themselves
desiring it, of course – to the formation and consolidation of the new,
parallel world market. They imposed an economic blockade on
the U.S.S.R., China and the European people's democracies, which did
not join the "Marshall plan" system, thinking thereby to strangle them.
The effect, however, was not to strangle, but to strengthen the new
But the fundamental thing, of course, is not the
economic blockade, but the fact that since the war these countries have
joined together economically and established economic cooperation and
mutual assistance. The experience of this cooperation shows that not a
single capitalist country could have rendered such effective and
technically competent assistance to the people's democracies as the
Soviet Union is rendering them. The point is not only that this
assistance is the cheapest possible and technically superb. The chief
point is that at the bottom of this cooperation lies a sincere desire
to help one another and to promote the economic progress of all. The
result is a fast pace of industrial development in these countries. It
may be confidently said that, with this pace of industrial development,
it will soon come to pass that these countries will not only be in no
need of imports from capitalist countries, but will themselves feel the
necessity of finding an outside market for their surplus products.
But it follows from this that the sphere of
exploitation of the world's resources by the major capitalist countries
(U.S.A., Britain France) will not expand, but contract; that their
opportunities for sale in the world market will deteriorate, and that
their industries will be operating more and more below capacity. That,
in fact, is what is meant by the deepening of the general crisis of the
world capitalist system in connection with the disintegration of the
This is felt by the capitalists themselves, for it
would be difficult for them not to feel the loss of such markets as the
U.S.S.R. and China. They are trying to offset these difficulties with
the "Marshall plan," the war in Korea, frantic rearmament, and
industrial militarization. But that is very much like a drowning man
clutching at a straw.
This state of affairs has confronted the economists with two questions:
a) Can it be affirmed that the thesis expounded by
Stalin before the Second World War regarding the relative stability of
markets in the period of the general crisis of capitalism is still
b) Can it be affirmed that the thesis expounded by
Lenin in the spring of 1916 – namely, that, in spite of the decay of
capitalism, "on the whole, capitalism is growing far more rapidly than
before"5 – is still valid?
I think that it cannot. In view of the new
conditions to which the Second World War has given rise, both these
theses must be regarded as having lost their validity.
6. Inevitability of Wars Between Capitalist Countries
Some comrades hold that, owing to the development of
new international conditions since the Second World War, wars between
capitalist countries have ceased to be inevitable. They consider that
the contradictions between the socialist camp and the capitalist camp
are more acute than the contradictions among the capitalist countries;
that the U.S.A. has brought the other capitalist countries sufficiently
under its sway to be able to prevent them going to war among themselves
and weakening one another; that the foremost capitalist minds have been
sufficiently taught by the two world wars and the severe damage they
caused to the whole capitalist world not to venture to involve the
capitalist countries in war with one another again – and that, because
of all this, wars between capitalist countries are no longer
These comrades are mistaken. They see the outward
phenomena that come and go on the surface, but they do not see those
profound forces which, although they are so far operating
imperceptibly, will nevertheless determine the course of developments.
Outwardly, everything would seem to be "going well":
the U.S.A. has put Western Europe, Japan and other capitalist countries
on rations; Germany (Western), Britain, France, Italy and Japan have
fallen into the clutches of the U.S.A. and are meekly obeying its
commands. But it would be mistaken to think that things can continue to
"go well" for "all eternity," that these countries will tolerate the
domination and oppression of the United States endlessly, that they
will not endeavour to tear loose from American bondage and take the
path of independent development.
Take, first of all, Britain and France. Undoubtedly,
they are imperialist countries. Undoubtedly, cheap raw materials and
secure markets are of paramount importance to them. Can it be assumed
that they will endlessly tolerate the present situation, in which,
under the guise of "Marshall plan aid," Americans are penetrating into
the economies of Britain and France and trying to convert them into
adjuncts of the United States economy, and American capital is seizing
raw materials and markets in the British and French colonies and
thereby plotting disaster for the high profits of the British and
French capitalists? Would it not be truer to say that capitalist
Britain, and, after her, capitalist France, will be compelled in the
end to break from the embrace of the U.S.A. and enter into conflict
with it in order to secure an independent position and, of course, high
Let us pass to the major vanquished countries,
Germany (Western) and Japan. These countries are now languishing in
misery under the jackboot of American imperialism. Their industry and
agriculture, their trade, their foreign and home policies, and their
whole life are fettered by the American occupation "regime." Yet only
yesterday these countries were great imperialist powers and were
shaking the foundations of the domination of Britain, the U.S.A. and
France in Europe and Asia. To think that these countries will not try
to get on their feet again, will not try to smash the U.S. "regime,"
and force their way to independent development, is to believe in
It is said that the contradictions between
capitalism and socialism are stronger than the contradictions among the
capitalist countries. Theoretically, of course, that is true. It is not
only true now, today; it was true before the Second World War. And it
was more or less realized by the leaders of the capitalist countries.
Yet the Second World War began not as a war with the U.S.S.R., but as a
war between capitalist countries. Why? Firstly, because war with the
U.S.S.R., as a socialist land, is more dangerous to capitalism than war
between capitalist countries; for whereas war between capitalist
countries puts in question only the supremacy of certain capitalist
countries over others, war with the U.S.S.R. must certainly put in
question the existence of capitalism itself. Secondly, because the
capitalists, although they clamour, for "propaganda" purposes, about the aggressiveness of the Soviet
Union, do not themselves believe that it is aggressive, because they
are aware of the Soviet Union's peaceful policy and know that it will
not itself attack capitalist countries.
After the First World War it was similarly believed
that Germany had been definitely put out of action, just as certain
comrades now believe that Japan and Germany have been definitely put
out of action. Then, too, it was said and clamoured in the press that
the United States had put Europe on rations; that Germany would never
rise to her feet again, and that there would be no more wars between
capitalist countries. In spite of this, Germany rose to her feet again
as a great power within the space of some fifteen or twenty years after
her defeat, having broken out of bondage and taken the path of
independent development. And it is significant that it was none other
than Britain and the United States that helped Germany to recover
economically and to enhance her economic war potential. Of course, when
the United States and Britain assisted Germany's economic recovery,
they did so with a view to setting a recovered Germany against the
Soviet Union, to utilizing her against the land of socialism. But
Germany directed her forces in the first place against the
Anglo-French-American bloc. And when Hitler Germany declared war on the
Soviet Union, the Anglo-French-American bloc, far from joining with
Hitler Germany, was compelled to enter into a coalition with the
U.S.S.R. against Hitler Germany.
Consequently, the struggle of the capitalist
countries for markets and their desire to crush their competitors
proved in practice to be stronger than the contradictions between the
capitalist camp and the socialist camp.
What guarantee is there, then, that Germany and
Japan will not rise to their feet again, will not attempt to break out
of American bondage and live their own independent lives? I think there
is no such guarantee.
But it follows from this that the inevitability of wars between capitalist countries remains in force.
It is said that Lenin's thesis that imperialism
inevitably generates war must now be regarded as obsolete, since
powerful popular forces have come forward today in defence of peace and
against another world war. That is not true.
The object of the present-day peace movement is to
rouse the masses of the people to fight for the preservation of peace
and for the prevention of another world war. Consequently, the aim of
this movement is not to overthrow capitalism and establish socialism –
it confines itself to the democratic aim of preserving peace. In this
respect, the present-day peace movement differs from the movement of
the time of the First World War for the conversion of the imperialist
war into civil war, since the latter movement went farther and pursued
It is possible that in a definite conjuncture of
circumstances the fight for peace will develop here or there into a
fight for socialism. But then it will no longer be the present-day
peace movement; it will be a movement for the overthrow of capitalism.
What is most likely is that the present-day peace
movement, as a movement for the preservation of peace, will, if it
succeeds, result in preventing a particular war, in its temporary
postponement, in the temporary preservation of a particular peace, in
the resignation of a bellicose government and its supersession by
another that is prepared temporarily to keep the peace. That, of
course, will be good. Even very good. But, all the same, it will not be enough to eliminate the
inevitability of wars between capitalist countries generally. It will
not be enough, because, for all the successes of the peace movement,
imperialism will remain, continue in force – and, consequently, the
inevitability of wars will also continue in force.
To eliminate the inevitability of war, it is necessary to abolish imperialism.
7. The Basic Economic Laws of Modern Capitalism and of Socialism
As you know, the question of the basic economic laws
of capitalism and of socialism arose several times in the course of the
discussion. Various views were expressed on this score, even the most
fantastic. True, the majority of the participants in the discussion
reacted feebly to the matter, and no decision on the point was
indicated. However, none of the participants denied that such laws
Is there a basic economic law of capitalism? Yes,
there is. What is this law, and what are its characteristic features?
The basic economic law of capitalism is such a law as determines not
some particular aspect or particular processes of the development of
capitalist production, but all the principal aspects and all the
principal processes of its development – one, consequently, which
determines the essence of capitalist production, its essential nature.
Is the law of value the basic economic law of
capitalism? No. The law of value is primarily a law of commodity
production. It existed before capitalism, and, like commodity
production, will continue to exist after the overthrow of capitalism,
as it does, for instance, in our country, although, it is true, with a
restricted sphere of operation. Having a wide sphere of operation in
capitalist conditions, the law of value, of course, plays a big part in
the development of capitalist production. But not only does it not
determine the essence of capitalist production and the principles of
capitalist profit; it does not even pose these problems. Therefore, it
cannot be the basic economic law of modern capitalism.
For the same reasons, the law of competition and
anarchy of production, or the law of uneven development of capitalism
in the various countries cannot be the basic economic law of capitalism
It is said that the law of the average rate of
profit is the basic economic law of modern capitalism. That is not
true. Modern capitalism, monopoly capitalism, cannot content it self
with the average profit, which moreover has a tendency to decline, in
view of the increasing organic composition of capital. It is not the
average profit, but the maximum profit that modern monopoly capitalism
demands, which it needs for more or less regular extended reproduction.
Most appropriate to the concept of a basic economic
law of capitalism is the law of surplus value, the law of the origin
and growth of capitalist profit. It really does determine the basic
features of capitalist production. But the law of surplus value is too
general a law that does not cover the problem of the highest rate of
profit, the securing of which is a condition for the development of
monopoly capitalism. In order to fill this hiatus, the law of surplus
value must made more concrete and developed further in adaptation to
the conditions of monopoly capitalism, at the same time bearing in mind that monopoly capitalism demands not any sort of
profit, but precisely the maximum profit. That will be the basic
economic law of modern capitalism.
The main features and requirements of the basic
economic law of modern capitalism might be formulated roughly in this
way: the securing of the maximum capitalist profit through the
exploitation, ruin and impoverishment of the majority of the population
of the given country, through the enslavement and systematic robbery of
the peoples of other countries, especially backward countries, and,
lastly, through wars and militarization of the national economy, which
are utilized for the obtaining of the highest profits.
It is said that the average profit might
nevertheless be regarded as quite sufficient for capitalist development
under modern conditions. That is not true. The average profit is the
lowest point of profitableness, below which capitalist production
becomes impossible. But it would be absurd to think that, in seizing
colonies, subjugating peoples and engineering wars, the magnates of
modern monopoly capitalism are striving to secure only the average
profit. No, it is not the average profit, nor yet super-profit –
which, as a rule, represents only a slight addition to the average
profit – but precisely the maximum profit that is the motor of
monopoly capitalism. It is precisely the necessity of securing the
maximum profits that drives monopoly capitalism to such risky
undertakings as the enslavement and systematic plunder of colonies and
other backward countries, the conversion of a number of independent
countries into dependent countries, the organization of new wars –
which to the magnates of modern capitalism is the "business" best
adapted to the extraction of the maximum profit – and, lastly,
attempts to win world economic supremacy.
The importance of the basic economic law of
capitalism consists, among other things, in the circumstance that,
since it determines all the major phenomena in the development of the
capitalist mode of production, its booms and crises, its victories and
defeats, its merits and demerits – the whole process of its
contradictory development – it enables us to understand and explain
Here is one of many "striking" examples.
We are all acquainted with facts from the history
and practice of capitalism illustrative of the rapid development of
technology under capitalism, when the capitalists appear as the
standard-bearers of the most advanced techniques, as revolutionaries in
the development of the technique of production. But we are also
familiar with facts of a different kind, illustrative of a halt in
technical development under capitalism, when the capitalists appear as
reactionaries in the development of new techniques and not infrequently
resort to hand labour.
How is this howling contradiction to be explained?
It can only be explained by the basic economic law of modern
capitalism, that is, by the necessity of obtaining the maximum profit.
Capitalism is in favour of new techniques when they promise it the
highest profit. Capitalism is against new techniques, and for resort to
hand labour, when the new techniques do not promise the highest profit.
That is how matters stand with the basic economic law of modern capitalism.
Is there a basic economic law of socialism? Yes,
there is. What are the essential features and requirements of this law?
The essential features and requirements of the basic law of socialism
might be formulated roughly in this way: the securing of the maximum
satisfaction of the constantly rising material and cultural requirements of the whole of society
through the continuous expansion and perfection of socialist production
on the basis of higher techniques.
Consequently: instead of maximum profits – maximum
satisfaction of the material and cultural requirements of society;
instead of development of production with breaks in continuity from
boom to crisis and from crisis to boom – unbroken expansion of
production; instead of periodic breaks in technical development,
accompanied by destruction of the productive forces of society – an
unbroken process of perfecting production on the basis of higher
It is said that the law of the balanced,
proportionate development of the national economy is the basic economic
law of socialism. That is not true. Balanced development of the
national economy, and hence, economic planning, which is a more or less
faithful reflection of this law, can yield nothing by themselves, if it
is not known for what purpose economic development is planned, or if
that purpose is not clear. The law of balanced development of the
national economy can yield the desired result only if there is a
purpose for the sake of which economic development is planned. This
purpose the law of balanced development of the national economy cannot
itself provide. Still less can economic planning provide it. This
purpose is inherent in the basic economic law of socialism, in the
shape of its requirements, as expounded above. Consequently, the law of
balanced development of the national economy can operate to its full
scope only if its operation rests on the basic economic law of
As to economic planning, it can achieve positive
results only if two conditions are observed: a) if it correctly
reflects the requirements of the law of balanced development of the
national economy, and b) if it conforms in every way to the
requirements of the basic economic law of socialism.
8. Other Questions
1) Extra-economic coercion under feudalism.
Of course, extra-economic coercion did play a part
in strengthening the economic power of the feudal landlords; however,
not it, but feudal ownership of the land was the basis of feudalism.
2) Personal property of the collective-farm household.
It would be wrong to say, as the draft textbook
does, that "every household in a collective farm has in personal use a
cow, small livestock and poultry." Actually, as we know, it is not in
personal use, but as personal property that the collective-farm
household has its cow, small livestock, poultry, etc. The expression
"in personal use" has evidently been taken from the Model Rules of the
Agricultural Artel. But a mistake was made in the Model Rules of the
Agricultural Artel. The Constitution of the U.S.S.R., which was drafted
more carefully, puts it differently, viz.:
"Every household in a collective farm . . . has as
its personal property a subsidiary husbandry on the plot, a dwelling
house, livestock, poultry and minor agricultural implements."
That, of course, is correct.
It would be well, in addition, to state more
particularly that every collective farmer has as his personal property
from one to so many cows, depending on local conditions, so many sheep,
goats, pigs (the number also depending on local conditions), and an
unlimited quantity of poultry (ducks, geese, hens, turkeys).
Such detailed particulars are of great importance
for our comrades abroad, who want to know what exactly has remained as
the personal property of the collective-farm household now that
agriculture in our country has been collectivized.
3) Total rent paid by the peasants to the landlords; also total expenditure on the purchase of land.
The draft textbook says that as a result of the
nationalization of the land, "the peasantry were released from paying
rent to the landlords to a total of about 500 million rubles annually"
(it should be "gold" rubles). This figure should be verified, because
it seems to me that it does not include the rent paid over the whole of
Russia, but only in a majority of the Russian gubernias. It should also
be borne in mind that in some of the border regions of Russia rent was
paid in kind, a fact which the authors of the draft text book have
evidently overlooked. Furthermore, it should be remembered that the
peasants were released not only from the payment of rent, but also from
annual expenditure for the purchase of land. Was this taken into
account in the draft textbook? It seems to me that it was not; but it
should have been.
4) Coalescence of the monopolies with the state machine.
The word "coalescence" is not appropriate. It
superficially and descriptively notes the process of merging of the
monopolies with the state, but it does not reveal the economic import
of this process. The fact of the matter is that the merging process is
not simply a process of coalescence, but the subjugation of the state
machine to the monopolies. The word "coalescence" should therefore be
discarded and replaced by the words "subjugation of the state machine to the monopolies."
5) Use of machines in the U.S.S.R.
The draft textbook says that "in the U.S.S.R.
machines are used in all cases when they economize the labour of
society." That is by no means what should be said. In the first place,
machines in the U.S.S.R. always economize the labour of society, and we
accordingly do not know of any cases in the U.S.S.R. where they have
not economized the labour of society. In the second place, machines not
only economize labour; they also lighten the labour of the worker, and
accordingly, in our conditions, in contradistinction to the conditions
of capitalism, the workers use machines in the processes of labour with
the greatest eagerness.
It should therefore be said that nowhere are
machines used so willingly as in the U.S.S.R., because they economize
the labour of society and lighten the labour of the worker, and, as
there is no unemployment in the U.S.S.R., the workers use machines in
the national economy with the greatest eagerness.
6) Living standards of the working class in capitalist countries.
Usually, when speaking of the living standards of
the working class, what is meant is only the standards of employed
workers, and not of what is known as the reserve army of unemployed. Is
such an attitude to the question of the living standards of the working
class correct? I think it is not. If there is a reserve army of
unemployed, whose members cannot live except by the sale of their
labour power, then the unemployed must necessarily form part of the
working class; and if they do form part of the working class, then
their destitute condition cannot but influence the living standards of the workers engaged in production. I therefore think that
when describing the living standards of the working class in capitalist
countries, the condition of the reserve army of unemployed workers
should also be taken into account.
7) National income.
I think it absolutely necessary to add a chapter on national income to the draft textbook.
8) Should there be a special chapter in the textbook
on Lenin and Stalin as the founders of the political economy of
I think that the chapter, "The Marxist Theory of
Socialism. Founding of the Political Economy of Socialism by V. I.
Lenin and J. V. Stalin," should be excluded from the textbook. It is
entirely unnecessary, since it adds nothing, and only colourlessly
reiterates what has already been said in greater detail in earlier
chapters of the textbook.
As regards the other questions, I have no remarks to
make on the "Proposals" of Comrades Ostrovityanov, Leontyev, Shepilov,
9. International Importance of a Marxist Textbook on Political Economy
I think that the comrades do not appreciate the
importance of a Marxist textbook on political economy as fully as they
should. It is needed not only by our Soviet youth. It is particularly
needed by Communists and communist sympathizers in all countries. Our
comrades abroad want to know how we broke out of capitalist slavery; how we rebuilt the economy
of our country on socialist lines; how we secured the friendship of the
peasantry; how we managed to convert a country which was only so
recently poverty-stricken and weak into a rich and mighty country; what
are the collective farms; why, although the means of production are
socialized, we do not abolish commodity production, money, trade, etc.
They want to know all this, and much else, not out of mere curiosity,
but in order to learn from us and to utilize our experience in their
own countries. Consequently, the appearance of a good Marxist textbook
on political economy is not only of political importance at home, but
also of great international importance.
What is needed, therefore, is a textbook which might
serve as a reference book for the revolutionary youth not only at home,
but also abroad. It must not be too bulky, because an over-bulky
textbook cannot be a reference book and is difficult to assimilate, to
master. But it must contain everything fundamental relating both to the
economy of our country and to the economy of capitalism and the
During the discussion, some comrades proposed the
inclusion in the textbook of a number of additional chapters: the
historians – on history, the political scientists – on politics, the
philosophers – on philosophy, the economists – on economics. But the
effect of this would be to swell the text book to unwieldy dimensions.
That, of course, must not be done. The textbook employs the historical
method to illustrate problems of political economy, but that does not
mean that we must turn a textbook on political economy into a history
of economic relations.
What we need is a textbook of 500 pages, 600 at most, no more. This
would be a reference book on Marxist political economy – and an
excellent gift to the young Communists of all countries.
Incidentally, in view of the inadequate level of
Marxist development of the majority of the Communist Parties abroad,
such a textbook might also be of great use to communist cadres abroad
who are no longer young.
10. Ways of Improving the Draft Textbook on Political Economy
During the discussion some comrades "ran down" the
draft textbook much too assiduously, berated its authors for errors and
oversights, and claimed that the draft was a failure. That is unfair.
Of course, there are errors and oversights in the textbook – they are
to be found in practically every big undertaking. Be that as it may,
the overwhelming majority of the participants in the discussion were
nevertheless of the opinion that the draft might serve as a basis for
the future textbook and only needed certain corrections and additions.
Indeed, one has only to compare the draft with the textbooks on
political economy already in circulation to see that the draft stands
head and shoulders above them. For that the authors of the draft
deserve great credit.
I think that in order to improve the draft textbook,
it would be well to appoint a small committee which would include not
only the authors of the textbook, and not only supporters, but also
opponents of the majority of the participants in the discussion,
out-and-out critics of the draft textbook.
It would also be well to include in the committee a
competent statistician to verify the figures and to supply additional
statistical material for the draft, as well as a competent jurist to
verify the accuracy of the formulations.
The members of the committee should be temporarily
relieved of all other work and should be well provided for, so that
they might devote themselves entirely to the textbook.
Furthermore, it would be well to appoint an
editorial committee, of say three persons, to take care of the final
editing of the textbook. This is necessary also in order to achieve
unity of style, which, unfortunately, the draft text book lacks.
Time limit for presentation of the finished textbook to the Central Committee – one year.
February 1, 1952
Reply to Comrade Alexander Ilyich Notkin
I was in no hurry to reply, because I saw no urgency
in the questions you raised. All the more so because there are other
questions which are urgent, and which naturally deflected attention
from your letter.
I shall answer point by point.
The first point.
There is a statement in the "Remarks" to the effect
that society is not powerless against the laws of science, that man,
having come to know economic laws, can utilize them in the interests of
society. You assert that this postulate cannot be extended to other
social formations, that it holds good only under socialism and
communism, that the elemental character of the economic processes under
capitalism, for example, makes it impossible for society to utilize
economic laws in the interests of society.
That is not true. At the time of the bourgeois
revolution in France, for instance, the bourgeoisie utilized against
feudalism the law that relations of production must necessarily conform
with the character of the productive forces, overthrew the feudal
relations of production, created new, bourgeois relations of
production, and brought them into conformity with the character of the
productive forces which had arisen in the bosom of the feudal system.
The bourgeoisie did this not because of any particular abilities it
possessed, but because it was vitally interested in doing so. The
feudal lords put up resistance to this not from stupidity, but because
they were vitally interested in preventing this law from becoming
The same must be said of the socialist revolution in
our country. The working class utilized the law that the relations of
production must necessarily conform with the character of the
productive forces, overthrew the bourgeois relations of production,
created new, socialist relations of production and brought them into
conformity with the character of the productive forces. It was able to
do so not because of any particular abilities it possessed, but because
it was vitally interested in doing so. The bourgeoisie, which from an
advanced force at the dawn of the bourgeois revolution had already
become a counter-revolutionary force offered every resistance to the
implementation of this law – and it did so not because it lacked
organization, and not because the elemental nature of economic
processes drove it to resist, but chiefly because it was to its vital
interest that the law should not become operative.
1. Economic processes, economic laws are in one
degree or another utilized in the interests of society not only under
socialism and communism, but under other formations as well;
2. The utilization of economic laws in class society
always and everywhere has a class background, and, moreover, always and
everywhere the champion of the utilization of economic laws in the
interests of society is the advanced class, while the obsolescent
classes resist it.
The difference in this matter between the
proletariat and the other classes which at any time in the course of
history revolutionized the relations of production consists in the fact
that the class interests of the proletariat merge with the interests of
the overwhelming majority of society, because proletarian revolution
implies the abolition not of one or another form of exploitation, but
of all exploitation, while the revolutions of other classes, which
abolished only one or another form of exploitation, were confined
within the limits of their narrow class interests, which conflicted
with the interests of the majority of society.
The "Remarks" speak of the class background of the
utilization of economic laws in the interests of society. It is stated
there that "unlike the laws of natural science, where the discovery and
application of a new law proceeds more or less smoothly, the discovery
and application of a new law in the economic field, affecting as it
does the interests of obsolescent forces of society, meets with the
most powerful resistance on their part." This point you missed.
The second point.
You assert that complete conformity of the relations
of production with the character of the productive forces can be
achieved only under socialism and communism, and that under other
formations the conformity can only be partial.
This is not true. In the epoch following the
bourgeois revolution, when the bourgeoisie had shattered the feudal
relations of production and established bourgeois relations of
production, there undoubtedly were periods when the bourgeois
production relations did fully conform with the character of the
productive forces. Otherwise, capitalism could not have developed as
swiftly as it did after the bourgeois revolution.
Further, the words "full conformity" must not be
understood in the absolute sense. They must not be understood as
meaning that there is altogether no lagging of the relations of
production behind the growth of the productive forces under socialism.
The productive forces are the most mobile and revolutionary forces of
production. They undeniably move in advance of the relations of
production even under socialism. Only after a certain lapse of time do
the relations of production change in line with the character of the
How, then, are the words "full conformity" to be
understood? They are to be understood as meaning that under socialism
things do not usually go to the length of a conflict between the
relations of production and the productive forces, that society is in a
position to take timely steps to bring the lagging relations of
production into conformity with the character of the productive forces.
Socialist society is in a position to do so because it does not include
the obsolescent classes that might organize resistance. Of course, even
under socialism there will be backward, inert forces that do not
realize the necessity for changing the relations of production; but
they, of course, will not be difficult to overcome without bringing
matters to a conflict.
The third point.
It appears from your argument that you regard the
means of production, and, in the first place, the implements of
production produced by our nationalized enterprises, as commodities.
Can means of production be regarded as commodities
in our socialist system? In my opinion they certainly cannot.
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 within 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 owner – the state – does not at all 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 utilization of the means of production in
accordance with the plans established by the state.
It will be seen, then, that under our system means
of production can certainly not be classed in the category of
Why, in that case, do we speak of the value of means
of production, their cost of production, their price, etc.?
For two reasons.
Firstly, this is needed for purposes of calculation
and settlement, for determining whether enterprises are paying or
running at a loss, for checking and controlling the enterprises. But
that is only the formal aspect of the matter.
Secondly, it is needed in order, in the interests of
our foreign trade, to conduct sales of means of production to foreign
countries. Here, in the sphere of foreign trade, but only in this
sphere, our means of production really are commodities, and really are
sold (in the direct meaning of the term).
It therefore follows that in the sphere of foreign
trade the means of production produced by our enterprises retain the
properties of commodities both essentially and formally, but that in
the sphere of domestic economic circulation, means of production lose
the properties of commodities, cease to be commodities and pass out of
the sphere of operation of the law of value, retaining only the outward
integument of commodities (calculation, etc.).
How is this peculiarity to be explained?
The fact of the matter is that in our socialist
conditions economic development proceeds not by way of upheavals, but
by way of gradual changes, the old not simply being abolished out of
hand, but changing its nature in adaptation to the new, and retaining
only its form; while the new does not simply destroy the old, but
infiltrates into it, changes its nature and its functions, without
smashing its form, but utilizing it for the development of the new.
This, in our economic circulation, is true not only of commodities, but
also of money, as well as of banks, which, while they lose their old
functions and acquire new ones, preserve their old form, which is
utilized by the socialist system.
If the matter is approached from the formal angle,
from the angle of the processes taking place on the surface of
phenomena, one may arrive at the incorrect conclusion that the categories of capitalism retain their validity under our economy.
If, however, the matter is approached from the standpoint of Marxist
analysis, which strictly distinguishes between the substance of an
economic process and its form, between the deep processes of
development and the surface phenomena, one comes to the only correct
conclusion, namely, that it is chiefly the form, the outward
appearance, of the old categories of capitalism that have remained in
our country, but that their essence has radically changed in adaptation
to the requirements of the development of the socialist economy.
The fourth point.
You assert that the law of value exercises a
regulating influence on the prices of the "means of production"
produced by agriculture and delivered to the state at the procurement
prices. You refer to such "means of production" as raw materials –
cotton, for instance. You might have added flax, wool and other
agricultural raw materials.
It should first of all be observed that in this case
it is not "means of production" that agriculture produces, but only one
of the means of production – raw materials. The words "means of
production" should not be juggled with. When Marxists speak of the
production of means of production, what they primarily have in mind is
the production of implements of production, what Marx calls "the
instruments of labour, those of a mechanical nature, which, taken as a
whole, we may call the bone and muscles of production," which
constitute the "characteristics of a given epoch of production."6 To
equate a part of the means of production (raw materials) with the means
of production, including the implements of production, is to sin
against Marxism, because Marxism considers that the implements of production play a decisive
role compared with all other means of production. Everyone knows that,
by themselves, raw materials cannot produce implements of production,
although certain kinds of raw material are necessary for the production
of implements of production, while no raw material can be produced
without implements of production.
Further: is the influence of the law of value on the
price of raw materials produced by agriculture a regulating influence,
as you, Comrade Notkin, claim? It would be a regulating one, if prices
of agricultural raw materials had "free" play in our country, if the
law of competition and anarchy of production prevailed, if we did not
have a planned economy, and if the production of raw materials were not
regulated by plan. But since all these "ifs" are missing in our
economic system, the influence of the law of value on the price of
agricultural raw materials cannot be a regulating one. In the first
place, in our country prices of agricultural raw materials are fixed,
established by plan, and are not "free." In the second place, the
quantities of agricultural raw materials produced are not determined
spontaneously or by chance elements, but by plan. In the third place,
the implements of production needed for the producing of agricultural
raw materials are concentrated not in the hands of individuals, or
groups of individuals, but in the hands of the state. What then, after
this, remains of the regulating function of the law of value? It
appears that the law of value is itself regulated by the
above-mentioned factors characteristic of socialist production.
Consequently, it cannot be denied that the law of
value does influence the formation of prices of agricultural raw
materials, that it is one of the factors in this process. But still
less can it be denied that its influence is not, and cannot be, a
The fifth point.
When speaking, in my "Remarks," of the
profitableness of the socialist national economy, I was controverting
certain comrades who allege that, by not giving great preference to
profitable enterprises, and by tolerating the existence side by side
with them of unprofitable enterprises, our planned economy is killing
the very principle of profitableness of economic undertakings. The
"Remarks" say that profitableness considered from the standpoint of
individual plants or industries is beneath all comparison with that
higher form of profitableness which we get from our socialist mode of
production, which saves us from crises of overproduction and ensures us
a continuous expansion of production.
But it would be mistaken to conclude from this that
the profitableness of individual plants and industries is of no
particular value and is not deserving of serious attention. That, of
course, is not true. The profitableness of individual plants and
industries is of immense value for the development of our industry. It
must be taken into account both when planning construction and when
planning production. It is an elementary requirement of our economic
activity at the present stage of development.
The sixth point.
It is not clear how your words "extended production
in strongly deformed guise" in reference to capitalism are to be
understood. It should be said that such production, and extended
production at that, does not occur in nature. It is evident that, after
the world market has split, and the sphere of exploitation of the
world's resources by the major capitalist countries (U.S.A., Britain, France) has begun to
contract, the cyclical character of the development of capitalism –
expansion and contraction of production – must continue to operate.
However, expansion of production in these countries will proceed on a
narrower basis, since the volume of production in these countries will
The seventh point.
The general crisis of the world capitalist system
began in the period of the First World War, particularly due to the
falling away of the Soviet Union from the capitalist system. That was
the first stage in the general crisis. A second stage in the general
crisis developed in the period of the Second World War, especially
after the European and Asian people's democracies fell away from the
capitalist system. The first crisis, in the period of the First World
War, and the second crisis, in the period of the Second World War, must
not be regarded as separate, unconnected and independent crises, but as
stages in the development of the general crisis of the world capitalist
Is the general crisis of world capitalism only a
political, or only an economic crisis? Neither the one, nor the other.
It is a general, i.e., all-round crisis of the world capitalist system,
embracing both the economic and the political spheres. And it is clear
that at the bottom of it lies the ever-increasing decay of the world
capitalist economic system, on the one hand, and the growing economic
might of the countries which have fallen away from capitalism – the
U.S.S.R., China and the other people's democracies – on the other.
April 21, 1952
Concerning the Errors of Comrade L. D. Yaroshenko
Some time ago the members of the Political Bureau of
the C.C., C.P.S.U.(B.) received a letter from Comrade Yaroshenko, dated
March 20, 1952, on a number of economic questions which were debated at
the November discussion. The author of the letter complains that the
basic documents summing up the discussion, and Comrade Stalin's
"Remarks," "contain no reflection whatever of the opinion" of Comrade
Yaroshenko. Comrade Yaroshenko also suggests in his note that he should
be allowed to write a "Political Economy of Socialism," to be completed
in a year or a year and a half, and that he should be given two
assistants to help him in the work.
I think that both Comrade Yaroshenko's complaint and his proposal need to be examined on their merits.
Let us begin with the complaint.
Well, then, what is the "opinion" of Comrade
Yaroshenko which has received no reflection whatever in the above
I Comrade Yaroshenko's Chief Error
To describe Comrade Yaroshenko's opinion in a couple
of words, it should be said that it is un-Marxist – and, hence,
Comrade Yaroshenko's chief error is that he forsakes
the Marxist position on the question of the role of the productive
forces and of the relations of production in the development of
society, that he inordinately overrates the role of the productive
forces, and just as inordinately underrates the role of the relations
of production, and ends up by declaring that under socialism the
relations of production are a component part of the productive forces.
Comrade Yaroshenko is prepared to grant the
relations of production a certain role under the conditions of
"antagonistic class contradictions," inasmuch as there the relations of
production "run counter to the development of the productive forces."
But he confines it to a purely negative role, the role of a factor
which retards the development of the productive forces, which fetters
their development. Any other functions, positive functions, of the
relations of production, Comrade Yaroshenko fails to see.
As to the socialist system, where "antagonistic
class contradictions" no longer exist, and where the relations of
production "no longer run counter to the development of the productive
forces," here, according to Comrade Yaroshenko, the relations of
production lose every vestige of an independent role, they cease to be
a serious factor of development, and are absorbed by the productive
forces, becoming a component part of them. Under socialism, Comrade
Yaroshenko says, "men's production relations become part of the organization of
the productive forces, as a means, an element of their
If that is so, what is the chief task of the
"Political Economy of Socialism"? Comrade Yaroshenko replies: "The
chief problem of the Political Economy of Socialism, therefore, is not
to investigate the relations of production of the members of socialist
society , it is to elaborate and develop a scientific theory of the
organization of the productive forces in social production, a theory of
the planning of economic development."8
That, in fact, explains why Comrade Yaroshenko is
not interested in such economic questions of the socialist system as
the existence of different forms of property in our economy, commodity
circulation, the law of value, etc., which he believes to be minor
questions that only give rise to scholastic disputes. He plainly
declares that in his Political Economy of Socialism "disputes as to the
role of any particular category of socialist political economy –
value, commodity, money, credit, etc., – which very often with us are
of a scholastic character, are replaced by a healthy discussion of the
rational organization of the productive forces in social production, by
a scientific demonstration of the validity of such organization.''9
In short, political economy without economic problems.
Comrade Yaroshenko thinks that it is enough to
arrange a "rational organization of the productive forces," and the
transition from socialism to communism will take place without any
particular difficulty. He considers that this is quite sufficient for
the transition to communism. He plainly declares that "under socialism,
the basic struggle for the building of a communist society reduces
itself to a struggle for the proper organization of the productive forces and their rational
utilization in social production.''10 Comrade Yaroshenko solemnly
proclaims that "Communism is the highest scientific organization of the
productive forces in social production."
It appears, then, that the essence of the communist
system begins and ends with the "rational organization of the
From all this, Comrade Yaroshenko concludes that
there cannot be a single political economy for all social formations,
that there must be two political economies: one for pre-socialist
social formations, the subject of investigation of which is men's
relations production, and the other for the socialist system, the
subject of investigation of which should be not the production, i.e.,
the economic, relations, but the rational organization of the
Such is the opinion of Comrade Yaroshenko.
What can be said of this opinion?
It is not true, in the first place, that the role of
the relations of production in the history of society has been confined
to that of a brake, a fetter on the development of the productive
forces. When Marxists speak of the retarding role of the relations of
production, it is not all relations of production they have in mind,
but only the old relations of production, which no longer conform to
the growth of the productive forces and, consequently, retard their
development. But, as we know, besides the old, there are also new
relations of production, which supersede the old. Can it be said that
the role of the new relations of production is that of a brake on the
productive forces? No, it cannot. On the contrary, the new relations of
production are the chief and decisive force, the one which in fact
determines the further, and, moreover, powerful, development of the productive forces, and
without which the latter would be doomed to stagnation, as is the case
today in the capitalist countries.
Nobody can deny that the development of the
productive forces of our Soviet industry has made tremendous strides in
the period of the five-year plans. But this development would not have
occurred if we had not, in October 1917, replaced the old, capitalist
relations of production by new, socialist relations of production.
Without this revolution in the production, the economic, relations of
our country, our productive forces would have stagnated, just as they
are stagnating today in the capitalist countries.
Nobody can deny that the development of the
productive forces of our agriculture has made tremendous strides in the
past twenty or twenty-five years. But this development would not have
occurred if we had not in the 'thirties replaced the old, capitalist
production relations in the countryside by new, collectivist production
relations. Without this revolution in production, the productive forces
of our agriculture would have stagnated, just as they are stagnating
today in the capitalist countries.
Of course, new relations of production cannot, and
do not, remain new forever; they begin to grow old and to run counter
to the further development of the productive forces; they begin to lose
their role of principal mainspring of the productive forces, and become
a brake on them. At this point, in place of these production relations
which have become antiquated, new production relations appear whose
role it is to be the principal mainspring spurring the further
development of the productive forces.
This peculiar development of the relations of
production from the role of a brake on the productive forces to that of
the principal mainspring impelling them forward, and from the role of
principal mainspring to that of a brake on the productive forces,
constitutes one of the chief elements of the Marxist materialist
dialectics. Every novice in Marxism knows that nowadays. But Comrade
Yaroshenko, it appears, does not know it.
It is not true, in the second place that the
production, i.e., the economic, relation lose their independent role
under socialism, that they are absorbed by the productive forces, that
social production under socialism is reduced to the organization of the
productive forces. Marxism regards social production as an integral
whole which has two inseparable sides: the productive forces of society
(the relation of society to the forces of nature, in contest with which
it secures the material values it needs), and the relations of
production (the relations of men to one another in the process of
production). These are two different sides of social production,
although they are inseparably connected with one another. And just
because they constitute different sides of social production, they are
able to influence one another. To assert that one of these sides may be
absorbed by the other and be converted into its component part, is to
commit a very grave sin against Marxism.
"In production, men not only act on nature but also
on one another. They produce only by cooperating in a certain way and
mutually exchanging their activities. In order to produce, they enter
into definite connections and relations with one another and only
within these social connections and relations does their action on
nature, does production take place.''11
Consequently, social production consists of two
sides, which, although they are inseparably connected, reflect two
different categories of relations: the relations of men to nature
(productive forces), and the relations of men to one another in the
process of production (production relations). Only when both sides of
production are present do we have social production, whether it be
under the socialist system or under any other social formation.
Comrade Yaroshenko, evidently, is not quite in
agreement with Marx. He considers that this postulate of Marx is not
applicable to the socialist system. Precisely for this reason he
reduces the problem of the Political Economy of Socialism to the
rational organization of the productive forces, discarding the
production, the economic, relations and severing the productive forces
If we followed Comrade Yaroshenko, therefore, what
we would get is, instead of a Marxist political economy, something in
the nature of Bogdanov's "Universal Organizing Science."
Hence, starting from the right idea that the
productive forces are the most mobile and revolutionary forces of
production, Comrade Yaroshenko reduces the idea to an absurdity, to the
point of denying the role of the production, the economic, relations
under socialism; and instead of a full-blooded social production, what
he gets is a lopsided and scraggy technology of production – something
in the nature of Bukharin's "technique of social organization."
"In the social production of their life [that is, in
the production of the material values necessary to the life of men –
J. St.], men enter into definite relations that are indispensable and
independent of their will, relations of production which correspond to a definite stage of development of their material
productive forces. The sum total of these relations of production
constitutes the economic structure of society, the real foundation, on
which rises a legal and political superstructure and to which
correspond definite forms of social consciousness."12
This means that every social formation, socialist
society not excluded, has its economic foundation, consisting of the
sum total of men's relations of production. What, one asks, happens to
the economic foundation of the socialist system with Comrade
Yaroshenko? As we know, Comrade Yaroshenko has already done away with
relations of production under socialism as a more or less independent
sphere, and has included the little that remains of them in the
organization of the productive forces. Has the socialist system, one
asks, its own economic foundation? Obviously, seeing that the relations
of production have disappeared as a more or less independent factor
under socialism, the socialist system is left without an economic
In short, a socialist system without an economic foundation. A rather funny situation. . . .
Is a social system without an economic foundation
possible at all? Comrade Yaroshenko evidently believes that it is.
Marxism, however, believes that such social systems do not occur in
It is not true, lastly, that communism means the
rational organization of the productive forces, that the rational
organization of the productive forces is the beginning and end of the
communist system, that it is only necessary to organize the productive
forces rationally, and the transition to communism will take place
without particular difficulty. There is in our literature another
definition, another formula of communism – Lenin's formula: "Communism is Soviet rule plus the
electrification of the whole country.''13 Lenin's formula is
evidently not to Comrade Yaroshenko's liking, and he replaces it with
his own homemade formula: "Communism is the highest scientific
organization of the productive forces in social production."
In the first place, nobody knows what this "higher
scientific" or "rational" organization of the productive forces which
Comrade Yaroshenko advertises represents, what its concrete import is.
In his speeches at the Plenum and in the working panels of the
discussion, and in his letter to the members of the Political Bureau,
Comrade Yaroshenko reiterates this mythical formula dozens of times,
but nowhere does he say a single word to explain how the "rational
organization" of the productive forces, which supposedly constitutes
the beginning and end of the essence of the communist system, should be
In the second place, if a choice must be made
between the two formulas, then it is not Lenin's formula, which is the
only correct one, that should be discarded, but Comrade Yaroshenko's
pseudo formula, which is so obviously chimerical and un-Marxist, and is
borrowed from the arsenal of Bogdanov, from his "Universal Organizing
Comrade Yaroshenko thinks that we have only to
ensure a rational organization of the productive forces, and we shall
be able to obtain an abundance of products and to pass to communism, to
pass from the formula, "to each according to his work," to the formula,
"to each according to his needs." That is a profound error, and reveals
a complete lack of understanding of the laws of economic development of
socialism. Comrade Yaroshenko's conception of the conditions for the
transition from socialism to communism is far too rudimentary and puerile. He does not understand that neither an
abundance of products, capable of covering all the requirements of
society, nor the transition to the formula, "to each according to his
needs," can be brought about if such economic factors as collective
farm, group, property, commodity circulation, etc., remain in force.
Comrade Yaroshenko does not understand that before we can pass to the
formula, "to each according to his needs," we shall have to pass
through a number of stages of economic and cultural re-education of
society, in the course of which work will be transformed in the eyes of
society from only a means of supporting life into life's prime want,
and social property into the sacred and inviolable basis of the
existence of society.
In order to pave the way for a real, and not
declaratory transition to communism, at least three main preliminary
conditions have to be satisfied.
1. It is necessary, in the first place, to ensure,
not a mythical "rational organization" of the productive forces, but a
continuous expansion of all social production, with a relatively higher
rate of expansion of the production of means of production. The
relatively higher rate of expansion of production of means of
production is necessary not only because it has to provide the
equipment both for its own plants and for all the other branches of the
national economy, but also because reproduction on an extended scale
becomes altogether impossible without it.
2. It is necessary, in the second place, by means of
gradual transitions carried out to the advantage of the collective
farms, and, hence, of all society, to raise collective-farm property to
the level of public property, and, also by means of gradual
transitions, to replace commodity circulation by a system of products-exchange, under which the central government, or
some other social-economic centre, might control the whole product of
social production in the interests of society.
Comrade Yaroshenko is mistaken when he asserts that
there is no contradiction between the relations of production and the
productive forces of society under socialism. Of course, our present
relations of production are in a period when they fully conform to the
growth of the productive forces and help to advance them at
seven-league strides. But it would be wrong to rest easy at that and to
think that there are no contradictions between our productive forces
and the relations of production. There certainly are, and will be,
contradictions, seeing that the development of the relations of
production lags, and will lag, behind the development of the productive
forces. Given a correct policy on the part of the directing bodies
these contradictions cannot grow into antagonisms, and there is no
chance of matters coming to a conflict between the relations of
production and the productive forces of society. It would be a
different matter if we were to conduct a wrong policy, such as that
which Comrade Yaroshenko recommends. In that case conflict would be
inevitable, and our relations of production might become a serious
brake on the further development of the productive forces.
The task of the directing bodies is therefore
promptly to discern incipient contradictions, and to take timely
measures to resolve them by adapting the relations of production to the
growth of the productive forces. This, above all, concerns such
economic factors as group, or collective-farm, property and commodity
circulation. At present, of course, these factors are being
successfully utilized by us for the promotion of the socialist economy,
and they are of undeniable benefit to our society. It is undeniable, too, that they will be of benefit also
in the near future. But it would be unpardonable blindness not to see
at the same time that these factors are already beginning to hamper the
powerful development of our productive forces, since they create
obstacles to the full extension of government planning to the whole of
the national economy, especially agriculture. There is no doubt that
these factors will hamper the continued growth of the productive forces
of our country more and more as time goes on. The task, therefore, is
to eliminate these contradictions by gradually converting
collective-farm property into public property, and by introducing –
also gradually – products-exchange in place of commodity circulation.
3. It is necessary, in the third place, to ensure
such a cultural advancement of society as will secure for all members
of society the all-round development of their physical and mental
abilities, so that the members of society may be in a position to
receive an education sufficient to enable them to be active agents of
social development, and in a position freely to choose their
occupations and not be tied all their lives, owing to the existing
division of labour, to some one occupation.
What is required for this?
It would be wrong to think that such a substantial
advance in the cultural standard of the members of society can be
brought about without substantial changes in the present status of
labour. For this, it is necessary, first of all, to shorten the working
day at least to six, and subsequently to five hours. This is needed in
order that the members of society might have the necessary free time to
receive an all round education. It is necessary, further, to introduce
universal compulsory polytechnical education, which is required in
order that the members of society might be able freely to choose
their occupations and not be tied to some one occupation all their
lives. It is likewise necessary that housing conditions should be
radically improved and that real wages of workers and employees should
be at least doubled, if not more, both by means of direct increases of
wages and salaries, and, more especially, by further systematic
reductions of prices for consumer goods.
These are the basic conditions required to pave the way for the transition to communism.
Only after all these preliminary conditions are
satisfied in their entirety may it be hoped that work will be converted
in the eyes of the members of society from a nuisance into "life's
prime want" (Marx),14 that "labour will become a pleasure instead of
being a burden" (Engels),15 and that social property will be regarded
by all members of society as the sacred and inviolable basis of the
existence of society.
Only after all these preliminary conditions have
been satisfied in their entirety will it be possible to pass from the
socialist formula, "from each according to his ability, to each
according to his work," to the communist formula, "from each according
to his ability, to each according to his needs."
This will be a radical transition from one form of
economy, the economy of socialism, to another, higher form of economy,
the economy of communism.
As we see, the transition from socialism to
communism is not such a simple matter as Comrade Yaroshenko imagines.
To attempt to reduce this complex and multiform
process, which demands deep-going economic changes, to the "rational
organization of the productive forces," as Comrade Yaroshenko does, is
to substitute Bogdanovism for Marxism.
II Other Errors of Comrade Yaroshenko
1. From his incorrect opinion, Comrade Yaroshenko
draws incorrect conclusions relative to the character and province of
Comrade Yaroshenko denies the necessity for a single
political economy for all social formations, on the grounds that every
social formation has its specific economic laws. But he is absolutely
wrong there, and is at variance with such Marxists as Engels and Lenin.
Engels says that political economy is "the science
of the conditions and forms under which the various human societies
have produced and exchanged and on this basis have distributed their
products.''16 Hence, political economy investigates the laws of
economic development not of any one social formation, but of the
various social formations.
With this, as we know, Lenin was in full agreement.
In his critical comments on Bukharin's Economics of the Transition
Period, he said that Bukharin was wrong in restricting the province of
political economy to commodity production, and above all to capitalist
production, observing that in doing so Bukharin was taking "a step
backward from Engels.''17
Fully in conformity with this is the definition of
political economy given in the draft textbook, when it says that
political economy is the science which studies "the laws of the social
production and distribution of material values at the various stages of
development of human society."
That is understandable. The various social
formations are governed in their economic development not only by their
own specific economic laws, but also by the economic laws that are
common to all formations, such as, for instance, the law that the
productive forces and the relations of production are united in one
integral social production, and the law governing the relations between
the productive forces and the relations of production in the process of
development of all social formations. Hence, social formations are not
only divided from one another by their own specific laws, but also
connected with one another by the economic laws common to all
Engels was quite right when he said:
"In order to carry out this critique of bourgeois
economy completely, an acquaintance with the capitalist form of
production, exchange and distribution did not suffice. The forms which
had preceded it or those which still exist alongside it in less
developed countries had also, at least in their main features, to be
examined and compared."18
It is obvious that here, on this question, Comrade Yaroshenko is in tune with Bukharin.
Further, Comrade Yaroshenko declares that in his
"Political Economy of Socialism," "the categories of political economy
– value, commodity, money, credit, etc., – are replaced by a healthy
discussion of the rational organization of the productive forces in
social production," that, consequently, the subject of investigation of
this political economy will not be the production relations of
socialism, but "the elaboration and development of a scientific theory
of the organization of the productive forces, theory of economic
planning, etc.," and that, under socialism, the relations of production
lose their independent significance and are absorbed by the productive
forces as a component part of them.
It must be said that never before has any retrograde
"Marxist" delivered himself of such unholy twaddle. Just imagine a
political economy of socialism without economic, production problems!
Does such a political economy exist anywhere in creation? What is the
effect, in a political economy of socialism, of replacing economic
problems by problems of organization of the productive forces? The
effect is to abolish the political economy of socialism. And that is
just what Comrade Yaroshenko does – he abolishes the political economy
of socialism. In this, his position fully gibes with that of Bukharin.
Bukharin said that with the elimination of capitalism, political
economy would also be eliminated. Comrade Yaroshenko does not say this,
but he does it; he does abolish the political economy of socialism.
True, he pretends that he is not in full agreement with Bukharin; but
that is only a trick, and a cheap trick at that. In actual fact he is
doing what Bukharin preached and what Lenin rose up in arms against.
Comrade Yaroshenko is following in the footsteps of Bukharin.
Further, Comrade Yaroshenko reduces the problems of
the political economy of socialism to problems of the rational
organization of the productive forces, to problems of economic
planning, etc. But he is profoundly in error. The rational organization
of the productive forces, economic planning, etc., are not problems of
political economy, but problems of the economic policy of the directing
bodies. They are two different provinces, which must not be confused.
Comrade Yaroshenko has confused these two different things, and has
made a terrible mess of it. Political economy investigates the laws of
development of men's relations of production. Economic policy draws
practical conclusions from this, gives them concrete shape, and builds
its day-to-day work on them. To foist upon political economy problems of economic policy is to kill it as a science.
The province of political economy is the production,
the economic, relations of men. It includes: a) the forms of ownership
of the means of production; b) the status of the various social groups
in production and their interrelations that follow from these forms, or
what Marx calls: "they exchange their activities";19 c) the forms of
distribution of products, which are entirely determined by them. All
these together constitute the province of political economy.
This definition does not contain the word
"exchange," which figures in Engels' definition. It is omitted because
"exchange" is usually understood by many to mean exchange of
commodities, which is characteristic not of all, but only of some
social formations, and this sometimes gives rise to misunderstanding,
even though the word "exchange" with Engels did not mean only commodity
exchange. As will be seen, however, that which Engels meant by the word
"exchange" has been included, as a component part, in the above
definition. Hence, this definition of the province of political economy
fully coincides in content with Engels' definition.
2. When speaking of the basic economic law of some
particular social formation, the presumption usually is that the latter
cannot have several basic economic laws, that it can have only some one
basic economic law, which precisely for that reason is the basic law.
Otherwise we should have several basic economic laws for each social
formation, which would be contrary to the very concept of a basic law.
But Comrade Yaroshenko does not agree with this. He thinks that it is
possible to have not one, but several basic economic laws of socialism.
It is incredible, but a fact. At the Plenary Discussion, he said:
"The magnitudes and correlations of the material
funds of social production and reproduction are determined by the
available labour power engaged in social production and its prospective
increase. This is the basic economic law of socialist society, and it
determines the structure of socialist social production and
That is one basic economic law of socialism.
In this same speech Comrade Yaroshenko declared:
"In socialist society, the correlations between
Departments I and II are determined by the fact that production must
have means of production in quantities sufficient to enlist all the
able-bodied members of the population in social production. This is the
basic economic law of socialism, and it is at the same time a demand of
our Constitution, following from the right to work enjoyed by Soviet
That, so to speak, is a second basic economic law of socialism.
Lastly, in his letter to the members of the Political Bureau, Comrade Yaroshenko declares:
"Accordingly, the essential features and
requirements of the basic economic law of socialism may, it seems to
me, be roughly formulated as follows: the continuous expansion and
perfection of the production of the material and cultural conditions of
life of society."
Here we have a third basic economic law of socialism.
Whether all these laws are basic economic laws of
socialism, or only one of them, and if only one of them, which exactly
– to these questions Comrade Yaroshenko gives no answer in his last
letter addressed to the members of the Political Bureau. When
formulating the basic economic law of socialism in his letter to the members of the Political Bureau he
"forgot," it is to be presumed, that in his speech at the Plenary
Discussion three months earlier he had already formulated two other
basic economic laws of socialism, evidently believing that nobody would
notice this dubious manoeuvre, to say the least of it. But, as we see,
Let us assume that the first two basic economic laws
of socialism formulated by Comrade Yaroshenko no longer exist, and that
from now on he regards as the basic economic law of socialism the third
one, which he formulated in his letter to the members of the Political
Bureau. Let us turn to this letter.
Comrade Yaroshenko says in this letter that he does
not agree with the definition of the basic economic law of socialism
which Comrade Stalin gave in his "Remarks." He says:
"The chief thing in this definition is 'the securing
of the maximum satisfaction of... the requirements of the whole of
society.' Production is presented here as the means of attaining this
principal aim – satisfaction of requirements. Such a definition
furnishes grounds for assuming that the basic economic law of socialism
formulated by you is based not on the primacy of production, but on the
primacy of consumption."
It is evident that Comrade Yaroshenko has completely
failed to understand the essence of the problem, and does not see that
talk about the primacy of consumption or of production has absolutely
nothing to do with the case. When speaking of the primacy of any social
process over another, it is usually assumed that the two processes are
more or less homogeneous in character. One may, and should, speak of
the primacy of the production of means of production over the
production of means of consumption, because production is involved in
both cases, and they are therefore more or less homogeneous. But one
cannot speak, and it would be wrong to speak, of the primacy of
consumption over production, or of production over consumption, because
production and consumption are two entirely different spheres, which,
it is true, are connected with one another, but which are different
spheres all the same. Comrade Yaroshenko obviously fails to realize
that what we are speaking of here is not the primacy of consumption or
of production, but of what aim society sets social production, to what
purpose it subordinates social production, say under socialism. So that
when Comrade Yaroshenko says that "the basis of the life of socialist
society, as of all other society, is production," it is entirely beside
the point. Comrade Yaroshenko forgets that men produce not for
production's sake, but in order to satisfy their needs. He forgets that
production divorced from the satisfaction of the needs of society
withers and dies.
Can we speak in general of the aims of capitalist or
socialist production, of the purposes to which capitalist or socialist
production are subordinated? I think that we can and should.
"The direct aim of production is not the production
of goods, but the production surplus value, or of profit in its
developed form; not the product, but the surplus product. From this
standpoint, labour itself is productive only in so far as it creates
profit or surplus product for capital. In so far as the worker does not
create it, his labour is unproductive. Consequently, the sum-total of
applied productive labour is of interest to capital only to the extent
that through it – or in relation to it – the sum-total of surplus
labour increases. Only to that extent is what is called necessary
labour time necessary. To the extent that it does not produce this
result, it is superfluous and has to be discontinued.
"It is the constant aim of capitalist production to
produce the maximum surplus value or surplus product with the minimum
of capital advanced; in so far as this result is not attained by
overworking the labourer, it is a tendency of capital to seek to
produce a given product with the least expenditure – economizing
labour power and costs....
"The labourers themselves figure in this conception
as what they actually are in capitalist production – only means of
production; not an aim in themselves and not the aim of
These words of Marx are remarkable not only because
they define the aim of capitalist production concisely and precisely,
but also because they indicate the basic aim, the principal purpose,
which should be set for socialist production.
Hence, the aim of capitalist production is
profit-making. As to consumption, capitalism needs it only in so far as
it ensures the making of profit. Outside of this, consumption means
nothing to capitalism. Man and his needs disappear from its field of
What is the aim of socialist production? What is
that main purpose to which social production should be subordinated
The aim of socialist production is not profit, but
man and his needs, that is, the satisfaction of his material and
cultural requirements. As is stated in Comrade Stalin's "Remarks," the
aim of socialist production is "the securing of the maximum
satisfaction of the constantly rising material and cultural
requirements of the whole of society."
Comrade Yaroshenko thinks that what he is confronted
with here is the "primacy" of consumption over production. That, of
course, is a misapprehension. Actually, what we have here is not the
primacy of consumption, but the subordination of socialist production
to its principal aim of securing the maximum satisfaction of the
constantly rising material and cultural requirements of the whole of
Consequently, maximum satisfaction of the constantly
rising material and cultural requirements of the whole of society is
the aim of socialist production; continuous expansion and perfection of
socialist production on the basis of higher techniques is the means for
the achievement of the aim.
Such is the basic economic law of socialism.
Desiring to preserve what he calls the "primacy" of
production over consumption, Comrade Yaroshenko claims that the "basic
economic law of socialism" consists in "the continuous expansion and
perfection of the production of the material and cultural conditions of
society." That is absolutely wrong. Comrade Yaroshenko grossly distorts
and vitiates the formula given in Comrade Stalin's "Remarks." With him,
production is converted from a means into an end, and the maximum
satisfaction of the constantly rising material and cultural
requirements of society is thrown out. What we get is expansion of
production for the sake of expansion of production, production as an
aim in itself; man and his requirements disappear from Comrade
Yaroshenko's field of vision.
It is therefore not surprising that, with the
disappearance of man as the aim of socialist production, every vestige
of Marxism disappears from Comrade Yaroshenko's "conception."
And so, what Comrade Yaroshenko arrives at is not
the "primacy" of production over consumption, but something like the
"primacy" of bourgeois ideology over Marxist ideology.
3. A question by itself is Marx's theory of
reproduction. Comrade Yaroshenko asserts that the Marxist theory of
reproduction is a theory of capitalist reproduction only, that it
contains nothing that might have validity for other social formations,
the socialist social formation in particular. He says:
"The extension of Marx's scheme of reproduction,
which he elaborated for the capitalist economy, to socialist social
production is the fruit of a dogmatic understanding of Marx's theory
and runs counter to the essence of his theory."21
He further asserts: "Marx's scheme of reproduction
does not correspond to the economic laws of socialist society and
cannot serve as a basis in the investigation of socialist
Concerning Marx's theory of simple reproduction,
which establishes a definite correlation between the production of
means of production (Department I) and the production of means of
consumption (Department II), Comrade Yaroshenko says:
"In socialist society, the correlation between
Departments I and II is not determined by Marx's formula v+m of
Department I and c of Department II.23 There should be no such
interconnection in development between Departments I and II under
He asserts: "The theory of the correlation
between Departments I and II worked out by Marx is not applicable in
our socialist conditions, since Marx's theory is based on capitalist
economy and its laws."25
That is how Comrade Yaroshenko makes mincemeat of Marx's theory of reproduction.
Of course, Marx's theory of reproduction, which was
the fruit of an investigation of the laws of the capitalist mode of
production, reflects the specific character of the latter, and,
naturally, is clothed in the form of capitalist-commodity value
relations. It could not have been otherwise. But he who sees in Marx's
theory of reproduction only its form, and does not observe its
fundamentals, its essential substance, which holds good not only for
the capitalist social formation alone, has no understanding whatever of
this theory. If Comrade Yaroshenko had any understanding at all of the
matter, he would have realized the self-evident truth that Marx's
scheme of reproduction does not begin and end with a reflection of the
specific character of the capitalist mode of production, that it at the
same time contains a whole number of fundamental tenets on the subject
of reproduction which hold good for all social formations, particularly
and especially for the socialist social formation. Such fundamental
tenets of the Marxist theory of reproduction as the division of social
production into the production of means of production and the
production of means of consumption; the relatively greater increase of
production of means of production in reproduction on an extended scale;
the correlation between Departments I and II; surplus product as the
sole source of accumulation; the formation and designation of the
social funds; accumulation as the sole source of reproduction on an
extended scale – all these fundamental tenets of the Marxist theory of
reproduction are at the same time tenets which hold good not only for the capitalist formation, and which
no socialist society can dispense with in the planning of its national
economy. It is significant that Comrade Yaroshenko himself, who snorts
so haughtily at Marx's "schemes of reproduction," is obliged every now
and again to call in the help of these "schemes" when discussing
problems of socialist reproduction.
And how did Lenin and Marx view the matter?
Everyone is familiar with Lenin's critical comments
on Bukharin's Economics of the Transition Period. In these remarks, as
we know, Lenin recognized that Marx's formula of the correlation
between Departments I and II, against which Comrade Yaroshenko rises in
arms, holds true both for socialism and for "pure communism," that is,
for the second phase of communism.
As to Marx, he, as we know, did not like to digress
from his investigation of the laws of capitalist production, and did
not, in his Capital, discuss the applicability of his schemes of
reproduction to socialism. However, in Chapter XX, Vol. II of Capital,
in the section, "The Constant Capital of Department I," where he
examines the exchange of Department I products within this department,
Marx, as though in passing, observes that under socialism the exchange
of products within this department would proceed with the same
regularity as under the capitalist mode of production. He says:
"If production were socialized, instead of
capitalistic, it is evident that these products of Department I would
just as regularly be redistributed as means of production to the
various lines of production of this department, for purposes of
reproduction, one portion remaining directly in that sphere of
production which created it, another passing over to other lines of
production of the same department, thereby entertaining a constant
mutual exchange between the various lines of production of this
Consequently, Marx by no means considered that his
theory of reproduction was valid only for the capitalist mode of
production, although it was the laws of the capitalist mode of
production he was investigating. We see, on the contrary, that he held
that his theory of reproduction might be valid also for the socialist
mode of production.
It should be remarked that, when analyzing the
economics of socialism and of the transitional period to communism in
his Critique of the Gotha Program, Marx proceeds from the fundamental
tenets of his theory of reproduction, evidently regarding them as
obligatory for the communist system. It should also be remarked that
when Engels, in his Anti-Dühring, criticizes Dühring's
"socialitarian system" and discusses the economics of the socialist
system, he likewise proceeds from the fundamental tenets of Marx's
theory of reproduction, regarding them as obligatory for the communist
Such are the facts.
It appears, then, that here too, in the question of
reproduction, Comrade Yaroshenko, despite his sneering attitude towards
Marx's "schemes," has again landed on the shoals.
4. Comrade Yaroshenko concludes his letter to the
members of the Political Bureau with the proposal that the compilation
of the "Political Economy of Socialism" be entrusted to him. He writes:
"On the basis of the definition of the province of
the political-economic science of socialism outlined by me at the
plenary meeting, in the working panel, and in the present letter, and
utilizing the Marxist dialectical method, I could, with the help of two
assistants, work out in the space of one year, or a year and a half at
most, the theoretical solution of the basic problems of the political
economy of socialism, that is, expound the Marxist, Leninist-Stalinist
theory of the political economy of socialism, a theory which would
convert this science into an effective weapon of the struggle of the
people for communism."
It must be confessed that modesty is not one of
Comrade Yaroshenko's failings – "even the other way round," it might
be said, borrowing the style of some of our writers.
It has already been pointed out above that Comrade
Yaroshenko confuses the political economy of socialism with the
economic policy of the directing bodies. That which he considers the
province of the political economy of socialism – rational organization
of the productive forces, economic planning, formation of social funds,
etc. – is the province of the economic policy of the directing bodies,
and not of the political economy of socialism.
I say nothing of the fact that the serious blunders
committed by Comrade Yaroshenko, and his un-Marxist "opinion" do not
incline one to entrust him with such a task.
1) The complaint Comrade Yaroshenko levels at the
managers of the discussion is untenable, since they, being Marxists,
could not in their summarizing documents reflect his un-Marxist
2) Comrade Yaroshenko's request to be entrusted with the writing of the
political economy of socialism cannot be taken seriously, if only
because it reeks of Khlestakovism.27
May 22, 1952
Reply to Comrades A. V. Sanina and V. G. Venzher
I have received your letters. It can be seen from
them that their authors are making a profound and serious study of the
economic problems of our country. There are quite a number of correct
formulations and interesting arguments in the letters. But alongside of
these, there are some grave theoretical errors. It is on these errors
that I propose to dwell in this reply.
1. Character of the Economic Laws of Socialism
Comrades Sanina and Venzher claim that "only because
of the conscious action of the Soviet citizens engaged in material
production do the economic laws of socialism arise." This opinion is
Do the laws of economic development exist
objectively, outside of us, independently of the will and consciousness
of man? Marxism answers this question in the affirmative. Marxism holds
that the laws of the political economy of socialism are a
reflection in the minds of men of objective laws existing outside of
us. But Comrades Sanina's and Venzher's formula answers this question
in the negative. That means that these comrades are adopting the
position of an incorrect theory which asserts that under socialism the
laws of economic development are "created," "transformed" by the
directing bodies of society. In other words, they are breaking with
Marxism and taking the stand of subjective idealism.
Of course, men can discover these objective laws,
come to know them and, relying upon them, utilize them in the interests
of society. But they cannot "create" them, nor can they "transform"
Suppose for a moment that we accepted this incorrect
theory which denies the existence of objective laws of economic
activity under socialism, and which proclaims the possibility of
"creating" and "transforming" economic laws. Where would it lead us? It
would lead us into the realm of chaos and chance, we should find
ourselves in slavish dependence on chances, and we should be forfeiting
the possibility not only of understanding, but of simply finding our
way about in this chaos of chances.
The effect would be that we should be destroying
political economy as a science, because science cannot exist and
develop unless it recognizes the existence of objective laws, and
studies them. And by destroying science, we should be forfeiting the
possibility of foreseeing the course of developments in the economic
life of the country, in other words, we should be forfeiting the
possibility of providing even the most elementary economic leadership.
In the end we should find ourselves at the mercy of
"economic" adventurers who are ready to "destroy" the laws of economic
development and to "create" new laws without any understanding of, or
consideration for objective law.
Everyone is familiar with the classic formulation of
the Marxist position on this question given by Engels in his
"Active social forces work exactly like natural
forces: blindly, forcibly, destructively, so long as we do not
understand, and reckon with, them. But when once we understand them,
when once we grasp their action, their direction, their effects, it
depends only upon ourselves to subject them more and more to our own
will, and by means of them to reach our own ends. And this holds quite
especially of the mighty productive forces of today. As long as we
obstinately refuse to understand the nature and the character of these
productive forces – and this understanding goes against the grain of
the capitalist mode of production and its defenders – so long these
forces are at work in spite of us, in opposition to us, so long they
master us, as we have shown above in detail. But when once their nature
is understood, they can, in the hands of the producers working
together, be transformed from master demons into willing servants. The
difference is as that between the destructive force of electricity in
the lightning of the storm, and electricity under command in the
telegraph and the voltaic arc; the difference between a conflagration,
and fire working in the service of man. With this recognition, at last,
of the real nature of the productive forces of today, the social
anarchy of production gives place to a social regulation of production
upon a definite plan, according to the needs of the community and of
each individual. Then the capitalist mode of appropriation, in which the product enslaves first the producer and then the
appropriator, is replaced by the mode of appropriation of the products
that is based upon the nature of the modern means of production; upon
the one hand, direct social appropriation, as means to the maintenance
and extension of production – on the other, direct individual
appropriation, as means of subsistence and of enjoyment."28
2. Measures for Elevating Collective-Farm Property to the Level of Public Property
What measures are necessary to raise collective-farm
property, which, of course, is not public property, to the level of
public ("national") property?
Some comrades think that the thing to do is simply
to nationalize collective-farm property, to proclaim it public
property, in the way that was done in the past in the case of
capitalist property. Such a proposal would be absolutely wrong and
quite unacceptable. Collective-farm property is socialist property, and
we simply cannot treat it in the same way as capitalist property. From
the fact that collective-farm property is not public property, it by no
means follows that it is not socialist property.
These comrades believe that the conversion of the
property of individuals or groups of individuals into state property is
the only, or at any rate the best, form of nationalization. That is not
true. The fact is that conversion into state property is not the only,
or even the best, form of nationalization, but the initial form of
nationalization, as Engels quite rightly says in Anti-Dühring. Unquestionably, so long
as the state exists, conversion into state property is the most natural
initial form of nationalization. But the state will not exist forever.
With the extension of the sphere of operation of socialism in the
majority of the countries of the world the state will die away, and, of
course, the conversion of the property of individuals or groups of
individuals into state property will consequently lose its meaning. The
state will have died away, but society will remain. Hence, the heir of
the public property will then be not the state, which will have died
away, but society itself, in the shape of a central, directing economic
That being so, what must be done to raise collective-farm property to the level of public property?
The proposal made by Comrades Sanina and Venzher as
the chief means of achieving such an elevation of collective farm
property is to sell the basic implements of production concentrated in
the machine and tractor stations to the collective farms as their
property, thus releasing the state from the necessity of making capital
investments in agriculture, and to make the collective farms themselves
responsible for the maintenance and development of the machine and
tractor stations. They say:
"It is wrong to believe that collective-farm
investments must be used chiefly for the cultural needs of the
collective farm village, while the greater bulk of the investments for
the needs of agricultural production must continue as hitherto to be
borne by the state. Would it not be more correct to relieve the state
of this burden, seeing that the collective farms are capable of taking
it entirely upon themselves? The state will have plenty of undertakings
in which to invest its funds with a view to creating an abundance of articles of consumption in the country."
The authors advance several arguments in support of their proposal.
First. Referring to Stalin's statement that means of
production are not sold even to the collective farms, the authors of
the proposal cast doubt on this statement of Stalin's by declaring that
the state, after all, does sell means of production to the collective
farms, such as minor implements, like scythes and sickles, small power
engines, etc. They consider that if the state can sell such means of
production to the collective farms, it might also sell them other means
of production, such as the machines of the machine and tractor
This argument is untenable. The state, of course,
does sell minor implements to the collective farms, as, indeed, it has
to in compliance with the Rules of the Agricultural Artel and the
Constitution. But can we lump in one category minor implements and such
basic agricultural means of production as the machines of the machine
and tractor stations, or, let us say, the land, which, after all, is
also one of the basic means of production in agriculture? Obviously
not. They cannot be lumped in one category because minor implements do
not in any degree decide the fate of collective-farm production,
whereas such means of production as the machines of the machine and
tractor stations and the land entirely decide the fate of agriculture
in our present day conditions.
It should not be difficult to understand that when
Stalin said that means of production are not sold to the collective
farms, it was not minor implements he had in mind, but the basic means
of agricultural production: the machines of the machine and tractor stations, the land. The authors are playing
with the words "means of production" and are confusing two different
things, without observing that they are getting into a mess.
Second. Comrades Sanina and Venzher further refer to
the fact that in the early period of the mass collective-farm movement
– end of 1929 and beginning of 1930 – the C.C., C.P.S.U.(B.) was
itself in favour of transferring the machine and tractor stations to
the collective farms as their property, requiring them to pay off the
cost of the machine and tractor stations over a period of three years.
They consider that although nothing came of this at the time, "in view
of the poverty" of the collective farms, now that they have become
wealthy it might be expedient to return to this policy, namely, the
sale of the machine and tractor stations to the collective farms.
This argument is likewise untenable. A decision
really was adopted by the C.C., C.P.S.U.(B.) in the early part of 1930
to sell the machine and tractor stations to the collective farms. It
was adopted at the suggestion of a group of collective-farm shock
workers as an experiment, as a trial, with the idea of reverting to the
question at an early date and re-examining it. But the first trial
demonstrated the inadvisability of this decision, and a few months
later, namely, at the close of 1930, it was rescinded.
The subsequent spread of the collective-farm
movement and the development of collective-farm construction definitely
convinced both the collective farmers and the leading officials that
concentration of the basic implements of agricultural production in the
hands of the state, in the hands of the machine and tractor stations,
was the only way of ensuring a high rate of expansion of collective-farm production.
We are all gratified by the tremendous strides
agricultural production in our country is making, by the increasing
output of grain, cotton, flax, sugar beet, etc. What is the source of
this increase? It is the increase of up-to-date technical equipment,
the numerous up-to-date machines which are serving all branches of
production. It is not a question of machinery generally; the question
is that machinery cannot remain at a standstill, it must be perfected
all the time, old machinery being scrapped and replaced by new, and the
new by newer still. Without this, the onward march of our socialist
agriculture would be impossible; big harvests and an abundance of
agricultural produce would be out of the question. But what is involved
in scrapping hundreds of thousands of wheel tractors and replacing them
by caterpillar tractors, in replacing tens of thousands of obsolete
harvester-combines by more up-to-date ones, in creating new machines,
say, for industrial crops? It involves an expenditure of billions of
rubles which can be recouped only after the lapse of six or eight
years. Are our collective farms capable of bearing such an expense,
even though their incomes may run into the millions? No, they are not,
since they are not in the position to undertake the expenditure of
billions of rubles which may be recouped only after a period of six or
eight years. Such expenditures can be borne only by the state, for it,
and it alone, is in the position to bear the loss involved by the
scrapping of old machines and replacing them by new; because it, and it
alone, is in a position to bear such losses for six or eight years and
only then recover the outlays.
What, in view of this, would be the effect of
selling the machine and tractor stations to the collective farms as
their property? The effect would be to involve the collective farms in
heavy loss and to ruin them, to undermine the mechanization of
agriculture, and to slow up the development of collective-farm
The conclusion therefore is that, in proposing that
the machine and tractor stations should be sold to the collective farms
as their property, Comrades Sanina and Venzher are suggesting a step in
reversion to the old backwardness and are trying to turn back the wheel
Assuming for a moment that we accepted Comrades
Sanina's and Venzher's proposal and began to sell the basic implements
of production, the machine and tractor stations, to the collective
farms as their property. What would be the outcome?
The outcome would be, first, that the collective
farms would become the owners of the basic instruments of production;
that is, their status would be an exceptional one, such as is not
shared by any other enterprise in our country, for, as we know, even
the nationalized enterprises do not own their instruments of
production. How, by what considerations of progress and advancement,
could this exceptional status of the collective farms be justified? Can
it be said that such a status would facilitate the elevation of
collective-farm property to the level of public property, that it would
expedite the transition of our society from socialism to communism?
Would it not be truer to say that such a status could only dig a deeper
gulf between collective farm property and public property, and would
not bring us any nearer to communism, but, on the contrary, remove us
farther from it?
The outcome would be, secondly, an extension of the
sphere of operation of commodity circulation, because a gigantic
quantity of instruments of agricultural production would come within
its orbit. What do Comrades Sanina and Venzher think – is the
extension of the sphere of commodity circulation calculated to promote
our advance to wards communism? Would it not be truer to say that our
advance towards communism would only be retarded by it?
Comrades Sanina's and Venzher's basic error lies in
the fact that they do not understand the role and significance of
commodity circulation under socialism; that they do not understand that
commodity circulation is incompatible with the prospective transition
from socialism to communism. They evidently think that the transition
from socialism to communism is possible even with commodity
circulation, that commodity circulation can be no obstacle to this.
That is a profound error, arising from an inadequate grasp of Marxism.
Criticizing Dühring's "economic commune," which
functions in the conditions of commodity circulation, Engels, in his
Anti-Dühring, convincingly shows that the existence of commodity
circulation was inevitably bound to lead Dühring's so-called
"economic communes" to the regeneration of capitalism. Comrades Sanina
and Venzher evidently do not agree with this. All the worse for them.
But we, Marxists, adhere to the Marxist view that the transition from
socialism to communism and the communist principle of distribution of
products according to needs preclude all commodity exchange, and,
hence, preclude the conversion of products into commodities, and, with
it, their conversion into value.
So much for the proposal and arguments of Comrades Sanina and Venzher.
But what, then, should be done to elevate collective-farm property to the level of public property?
The collective farm is an unusual kind of
enterprise. It operates on land, and cultivates land which has long
been public, and not collective-farm property. Consequently, the
collective farm is not the owner of the land it cultivates.
Further, the collective farm operates with basic
implements of production which are public, not collective-farm
property. Consequently, the collective farm is not the owner of its
basic implements of production.
Further, the collective farm is a cooperative
enterprise: it utilizes the labour of its members, and it distributes
its income among its members on the basis of workday units; it owns its
seed, which is renewed every year and goes into production.
What, then, does the collective farm own? Where is
the collective-farm property which it disposes of quite freely, at its
own discretion? This property of the collective farm is its product,
the product of collective farming: grain, meat, butter, vegetables,
cotton, sugar beet, flax, etc., not counting the buildings and the
personal husbandry of the collective farmers on their household plots.
The fact is that a considerable part of this product, the surplus
collective-farm output, goes into the market and is thus included in
the system of commodity circulation. It is precisely this circumstance
which now prevents the elevation of collective-farm property to the
level of public property. It is therefore precisely from this end that
the work of elevating collective farm property to the level of public
property must be tackled.
In order to raise collective-farm property to the
level of public property, the surplus collective-farm output must be
excluded from the system of commodity circulation and included in the
system of products-exchange between state industry and the collective
farms. That is the point.
We still have no developed system of
products-exchange, but the rudiments of such a system exist in the
shape of the "merchandising" of agricultural products. For quite a long
time already, as we know, the products of the cotton-growing,
flax-growing, beet-growing and other collective farms are
"merchandised." They are not "merchandised" in full, it is true, but
only partly, still they are "merchandised." Be it mentioned in passing
that "merchandising" is not a happy word, and should be replaced by
"products-exchange." The task is to extend these rudiments of
products-exchange to all branches of agriculture and to develop them
into a broad system, under which the collective farms would receive for
their products not only money, but also and chiefly the manufactures
they need. Such a system would require an immense increase in the goods
allocated by the town to the country, and it would therefore have to be
introduced without any particular hurry, and only as the products of
the town multiply. But it must be introduced unswervingly and
unhesitatingly, step by step contracting the sphere of operation of
commodity circulation and widening the sphere of operation of
Such a system, by contracting the sphere of
operation of commodity circulation, will facilitate the transition from
socialism to communism. Moreover, it will make it possible to include
the basic property of the collective farms, the product of collective
farming, in the general system of national planning.
That will be a real and effective means of raising
collective farm property to the level of public property under our
Will such a system be advantageous to the collective-farm peasantry? It
undoubtedly will. It will, because the collective-farm peasantry will
receive far more products from the state than under commodity
circulation, and at much cheaper prices. Everyone knows that the
collective farms which have products-exchange ("merchandising")
contracts with the government receive incomparably greater advantages
than the collective farms which have no such contracts. If the
products-exchange system is extended to all the collective farms in the
country, these advantages will become available to all our
September 28, 1952
 Frederick Engels, Anti-Dühring, Eng. ed., Foreign
Languages Publishing House, Moscow, 1954, p. 158.
 Ibid., pp. 392-93.
 Ibid., pp. 392.
 Ibid., pp. 412.
 V. I. Lenin, Imperialism the Highest Stage of Capitalism ,
Eng. ed., Foreign Languages Press, Peking, 1969, p.
 Karl Marx, Capital , Eng. ed., Vol. I, Chapter 5, Section I. p. 55.
 Comrade Yaroshenko's letter to the Political Bureau of the Central Committee.
 Comrade Yaroshenko's speech in the Plenary Discussion.
 Comrade Yaroshenko's speech at the Discussion Working Panel.
 Comrade Yaroshenko's speech in the Plenary Discussion.
 Karl Marx, "Wage Labour and Capital", Selected Works of
Karl Marx and Frederick Engels, Eng. ed., FLPH, Moscow, 1951, Vol. I,
 Karl Marx, "Preface to A Contribution to the Critique of
Political Economy", Selected Works of Karl Marx and Frederick Engels,
Eng. ed., FLPH, Moscow, 1951, Vol. I, pp. 328-29.
 V. I. Lenin, "Our Foreign and Domestic Position and the
Tasks of the Party", Collected Works, Russian ed., Vol.
 Karl Marx, "Critique of the Gotha Program", Selected Works
of Karl Marx and Frederick Engels, Eng. ed., FLPH, Moscow, 1951, Vol.
 Frederick Engels, Anti-Dühring, Eng. ed., FLPH, Moscow, 1954, p. 408.
 Ibid., p. 208.
 V. I. Lenin, Critical Comments on Bukharin's "Economics of
the Transition Period ", Russian ed.
 Frederick Engels, Anti-Dühring, Eng. ed., FLPH, Moscow, 1954, p. 209.
 Karl Marx, "Wage Labour and Capital", Selected Works of
Karl Marx and Frederick Engels, Eng. ed., FLPH, Moscow, 1951, Vol. I,
 Karl Marx, "Theory of Surplus Value", Karl Marx and
Frederick Engels, Works, German ed., Vol. 26, Part 2, Chapter
 Comrade Yaroshenko's speech in the Plenary Discussion.
 Here "V" stands for varied capital, "M" for surplus value
and "C" for constant capital. For the formula, see Karl Marx, Capital,
Eng. ed., Vol. 2, Chapter 20.
 Comrade Yaroshenko's speech in the Plenary Discussion.
 Comrade Yaroshenko's letter to the Political Bureau of the Central Committee.
 Karl Marx, Capital, Eng. ed., Vol. 2, Chapter 20, Section 6.
 After the central figure, Khlestakov, in the play The
Inspector General by Nikolai Gogol, meaning an impostor and a
 Frederick Engels, Anti-Dühring, Eng. ed., FLPH, Moscow, 1954, pp. 387-88.
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