Rudimentary Forms of Products Exchange

N. Smolin


The question of products-exchange was an object of discussion on two major occasions in Soviet Russia and both times it was associated with the question of the construction of communist society. In the period of War Communism, and even earlier, when the Russian communists considered that Soviet Russia was passing over directly to communism Lenin and others proposed the direct exchange of products between town and country with the temporary mediation of monetary relations. The necessity of preserving the worker-peasant alliance at the close of the civil war period and the introduction of the New Economic Period which encompassed the utilisation of commodity-money relations for some time did not permit the question of products exchange to be taken up as an immediate task.(1) The co-existence of Soviet industry with the sea of peasantry wedded to private property and production for profit, the preservation of capitalist social relations in the countryside, were a permanent brake on the advance to socialism and communism. The liquidisation of the rich peasantry as a class, the last capitalist class as had Lenin called it, and the formation of the collective farms of the poor peasantry dramatically transformed the social relations of Soviet society by ending altogether the existence of antagonistic social classes. The Soviet Constitution of 1936 recorded the fact that socialism in the main had been constructed. The CPSU (b) thereafter began to consider the tasks of the completion of the advance to a classless socialist society and the gradual establishment of communism. This is apparent from the internal deliberations of the party on the question of drafting a new party programme as well as the discussions which took place at the Eighteenth Congress and afterwards.(2) The Second World War interrupted these projects. With the rapid return of the productive forces to the level of 1940 and their further accelerated growth thereafter the question of the gradual transition from socialism to communism returned to the fore. The discussions in ‘Economic Problems of Socialism in the USSR’ are witness to this.(3) In this work Stalin suggested inter alia that the existing system of ‘merchandising’ wherein some collective farms exchanged their surplus product in return for the manufactures of state industry required to be expanded to embrace all branches of agriculture which would not only contract the sphere of operation of commodity circulation but also bring the product of the property of the collective farms under the sphere of national planning. The little-known article by N. Smolin reprinted here expanded on the views expressed by Stalin at the Nineteenth Congress of the CPSU held in 1952.(4) These views were current in the USSR for only a short period. Within weeks of the demise of Stalin the perspectives on the transition to communism sketched out at the Nineteenth Congress were phased out and the theses on the need to extend products-exchange were replaced by new proposals on the necessity to expand the sphere of operation of ‘Soviet trade.’ The era of ‘market socialism’ and ‘market communism’ was slowly and silently dawning.

Vijay Singh


1. A useful introduction to the discussions in this period, despite the attachment of the author to the inordinate retention of commodity-money relations in socialist society, may be located in Laszlo Szamuely, ‘First Models of the Socialist Economic Systems, Principles and Theories’, Akademiai Kiado, Budapest, 1974.

2. See: Vijay Singh,‘The CPSU (B), Gosplan and the Question of the Transition to Communist Society in the Soviet Union 1939-1953’, RD Vol. III, No. 1, April 1997.

3. As also the discussion held by Stalin with Soviet economists on 15th February 1952 in RD Vol. IV, No. 2, September 1998.

4. This article was previously printed in India as an appendix to the Hindi edition of ‘Economic Problems’. J. V. Stalin, ‘Soviet sangh men samajvad ki arthik samasyaen’, Kamgar Prakashan, Delhi, 1984, pp. 96-120. Translated into Hindi by Karan Singh Chauhan.

One of the greatest of Comrade Stalin’s scientific discoveries contained in his new work of genius, Economic Problems of Socialism in the U.S.S.R., lies in the revelation of the necessity for the gradual transformation of collective-farm property into property of the whole people, and for the introduction of products-exchange (also gradually) in place of commodity circulation.

In his new, classical work, Stalin shows that the existence of the collective-farm type of property makes the continuation of commodity production and commodity circulation necessary in Socialist society. The collective-farm type of property and commodity circulation, Comrade Stalin teaches, constitute necessary and most useful elements of our national economy at the present time.

Doubtless, they will continue to be useful in the near future also. But it cannot but be noted that these phenomena are at the same time already beginning to act as a brake upon the mighty development of our productive forces. ‘There is no doubt,’ says Comrade Stalin, ‘that these factors will hamper the continual growth of the productive forces of our country more and more as time goes on. (p. 76).

In so far as collective-farm group property and commodity circulation form a necessary and most useful element of our national economy at the present time, and will be employed to advantage in the near future also, they must be strengthened by every possible means.

This task is reflected in the directives of the Nineteenth Party Congress about increasing the volume of gross and marketable agricultural production (the produce of a collective farm constitutes collective-farm property, if one leaves out of account the buildings and the personal economy of each collective farmer on his own plot) and the further growth of commodity exchange. But it is at the same time necessary to raise collective-farm property to the level of property of the whole people and to widen the sphere of operation of products-exchange as a higher form of the economic link between industry and agriculture.

Comrade Stalin’s great work equips the Party with an understanding of the need to develop collective-farm property and simultaneously to raise it to the level of property of the whole people, to develop commodity circulation, while simultaneously reducing its sphere of operation and widening the sphere of operation of products-exchange.

Products-exchange, like commodity-exchange, constitutes one of the forms of exchange of social activity. The form of ownership of the means of production, and the form of exchange of social activity deriving from it, wholly determine also the forms of the distribution of products. As the form of property is, so will be the form of exchange of social activity.

Collective-farm property gives rise to the necessity for the existence of commodity exchange, as one form of the exchange of social activity. ‘At present the collective farms will not recognise any other economic relation with the town except the commodity relation-exchange through purchase and sale’ (Economic Problems, p. 20).

At the same time, as Comrade Stalin notes, we already have rudiments of products-exchange, and these must be organised in all branches of agriculture and developed even now, under conditions of the collective-farm form of property, in order to restrict the sphere of operation of commodity circulation.

Wherein lies the distinction between products-exchange and commodity-exchange?

Some comrades see it as being the distinction between trade by barter, which existed several thousand years ago and was theoretically generalised by Marx in his studies of simple and developed forms of value, and trade carried on through the medium of money forms of value. Such a conception is profoundly erroneous. Trade by barter, which was analysed by Marx in his studies of simple and developed forms of value, is not products-exchange, but a lower form of commodity-exchange.

The distinct stages of development of commodity-exchange reflected the different levels of development of social ties based upon various forms of ownership of the means of production. Products-exchange, rudiments of which already exist in the U.S.S.R., will also pass through various stages of development; but all these stages in the development of products-exchange will reflect the growth of social ties on the basis of ownership by the whole people of the means of production and later of the entire output of production.

How, then, does products-exchange manifest itself; how is it differentiated from commodity-exchange as this exists in our conditions – that is, trade without capitalists and speculators?

Products-exchange and commodity-exchange are different forms of the exchange of people’s social activity. The exchange of social activity is the basis of all human society but the exchange of commodities is not a feature of all social formations but only of some of them. The exchange of social activity takes the form of the exchange of commodities under various forms of private property or under various forms of Socialist property. Certainly, the exchange of commodities which takes place on the basis of various forms of Socialist property is fundamentally different from the exchange of commodities which takes place on the basis of various forms of private property, for which reason our commodity production is commodity production of a special type.

With the establishment of public ownership of the main means of production, there arises the possibility of and necessity for the exchange of social activity, not in the form of the exchange of commodities, but in the form of products-exchange.

The order from the Council of Labour and Defence to local Soviet organisations written by Lenin in May 1921 testifies to the role of public ownership in the transition from the relations of commodity-exchange to the relations of products-exchange. Lenin indicated that:

‘the state product, the product of the Socialist factory exchanged for the peasants’ produce, is not a commodity in the politico-economic sense, in any case is not only a commodity, is no longer a commodity, is ceasing to be a commodity.’ (Lenin, Works, Russ. Ed. vol. 32, p. 362.)

Practical steps in the development of products-exchange were made during the first years of the Socialist revolution. This is dealt with in particular in Lenin’s decree on the organising of products-exchange in the supply of cotton, flax and hemp. Thus, the decree of the Council of People’s Commissars dated November 2, 1920:

‘Concerning the restoration of cotton-growing in the Turkestan and Azerbaijan S.S.R.s,’ speaks of ‘obliging the Central Council of National Economy of the Turkestan and Azerbaijan S.S.R.s to organise the supplying of the population with produce and general consumer goods on a contractual basis by way of products-exchange against raw cotton deliveries.’ (Collected Decrees and Orders of the Workers’ and Peasants’ Government, 1920, No. 100, p. 536.)

In the decree ‘Concerning the fund of commodities for recompensing flax and hemp growers’, the composition of the fund was laid down, together with the norms of issue from it of various products and consumer goods, on the basis of one desyatina of sown flax or hemp.

In this first products-exchange fund were listed 12 million poods of bread, 150,000 poods of salt, 10.8 million arshins of cloth, 6.9 million boxes of matches, and also horse-shoe nails, tobacco, wheel-oil, pitch, iron wheel-rims, axle-irons, etc. For one desyatina of sown flax or hemp there were allocated from this fund, without payment, 20 lb. of bread, 10 lb. of salt, 5 lb. of leather goods, 3 lb. of soap, 18 arshins of cloth, 10 boxes of matches, ˝ lb. of horse-shoe nails and so on. The decree states that allocations must be made only to those flax and hemp growers who had concluded agreements for flax and hemp growing. Those who had not concluded agreements but who nevertheless sowed flax and hemp were obliged to surrender their product according to assessment at a firm price without the right of claiming corresponding allocations from the fund. Thus the decree established more favourable conditions for those flax and hemp growers who had concluded agreements with the state for the supply of hemp and flax.

Comrade Stalin defined the rudiments of products-exchange which grew up in subsequent years, in the form of state contracts for agricultural production through co-operative societies of small peasant households, as the domestic system of large-scale state-socialist production in the sphere of agriculture.

These new relationships were one of the forms of the production alliance of the working class and the peasantry. On the basis of public property the Soviet State afforded productive help to the poor and middle peasants, thus facilitating the expansion of agricultural production and the preparation of the peasantry to take the path toward collective farming.

The Soviet State was able to afford productive help to the poor and middle peasant because public property existed. This help served as a means of increasing agricultural production. Hence, the advantage gained by the poor and middle peasantry from the development of the products-exchange relationship with the Soviet State not merely did not undermine public property but, on the contrary, facilitated the strengthening of public property, since production expanded and the size of state-owned stocks of agricultural produce increased.

The role of products-exchange was shown already in the form of those rudimentary new relations between town and country which existed prior to the victory of collectivisation. Even at its beginning, products-exchange, being a higher form of economic link between industry and agriculture, arising on the basis of the existence of public property, facilitated the development of productive forces, was advantageous to small peasant economy and at the same time strengthened public socialist property.

‘Of extreme interest in’ this respect,’ Comrade Stalin pointed out, ‘are several new phenomena observed in the countryside in connection with the work of the farming co-operatives. It is well-known that new, large organisations have sprung up in the Selskosuyuz (the central organisations of rural co-operative societies), in different branches of agriculture, such as flax, potatoes, butter, etc., which have a great future before them. Of these the Flax Centre (Central Co-operative Society for Flax Growing and Marketing), for instance, unites a whole net-work of peasant flax-growers’ associations. The Flax Centre supplies the peasants with seeds and implements; then it buys all the flax raised by these peasants, disposes of it on the market in mass quantities, guarantees the peasants a share in the profits, and in this way links peasant farming with state industry through the Selskosoyuz. What shall we call this form of organisation of production? In my opinion, it is the domestic system of large-scale state-socialist production in the sphere of agriculture. In speaking of the domestic system of state-socialist production, I draw an analogy with the domestic system under capitalism, let us say, in the textile industry, where the handicraftsmen received their raw materials and tools from the capitalist and turned over to him the entire product of their labour, thus being in fact semi-wage earners working in their own homes.’ (Stalin, Problems of Leninism, 1947 English edition, pp. 57-58.)

Certainly, the rudiments of products-exchange existing in the transition period, and the rudiments of products-exchange existing during the period of Socialism, differ in their significance. But there is this in common between them, that (1) the fundamental relationship of products-exchange was and is public socialist property, and (2) the relationships of products-exchange facilitated and do facilitate the development of the productive forces and hence, being advantageous both for the poor and middle peasantry in the transition period and for the collective farmers in the period of Socialism, at the same time strengthened and still strengthen public property.

Collective farms and collective farmers at the present time derive great benefit from the products-exchange relationship, since on the basis of this relationship they receive in exchange for their produce very many more industrial products than they would receive on the basis of the commodity-exchange relationship, and obtain very much more benefit than they obtained under small-scale peasant economy.

Thus, a flax-growing collective farm, for every centner of flax fibre delivered to the state, has the right to purchase 150 kilogrammes of wheat. With an average yield of 4-5 centners of flax fibre per hectare, the flax-growing collective farm has the right to purchase 600-750 kilos of wheat, as well as other products. Flax-growing collective farms receive bread at a privileged price. The price of the wheat delivered to them by the state by way of products-exchange is lower than the retail price.

A number of other products are bought by collective farms which grow flax, hemp and beet at much lower prices. Flax- and hemp-growing collective farms have the right to buy, for each centner of seed delivered, 3 kilos of sugar or, in place of sugar, vegetable fats, at much lower, privileged prices. Collective farms which deliver sugar beet also have the right, by agreement, in return for each centner of sugar beet delivered to the sugar factory, to buy 650 grams of sugar at advantageous prices. The collective farm has the right to buy in advance 130 grams of sugar for every centner of sugar beet provided for in the contract-plan, for distribution amongst the collective farmers working on beet cultivation.

Furthermore, for every centner of sugar beet which it delivers to the factory in excess of the contract-plan laid down for the given collective farm, a beet-growing work-team (zveno) is allowed 500 grams of sugar at the same privileged price. The collective farm’s payment in kind to the M.T.S. for its work on the cultivation of sugar beet is also taken into account towards the fulfilment of the contract-plan. The sugar factory gives beet seed without payment; beet-growing collective farms also receive molasses and beet refuse free in accordance with definite norms. Sugar factories also by agreement help beet-growing collective farms with lorries for the transport of mineral fertiliser, beet seed, germicides and other agricultural loads. The conditions and arrangements for transport are defined separately in contracts for the transport of particular loads.

The sale of commodities at privileged prices on the basis of ‘merchandising’ gave collective farms and farmers in 1952 alone a clear gain of several milliard roubles, as was shown in Comrade P. K. Ponomarenko’s speech at the Nineteenth Party Congress.

Agreements on a number of types of contracted agricultural products envisage the payment of cash advances to collective farms by the supply organisations and also the sale of commodities to collective farms by way of advances; for example, sugar to beet-growing collective farms. In the model agreement between Glavparfyumer and collective farms for the delivery of essential-oil plants, the allocation of a cash advance is envisaged, which is paid in two parts: 50 per cent after the signature of the agreement and 50 per cent after the completion of the first weeding.

With the aim of developing cotton cultivation, the prices of cotton were raised, whilst those of the grain delivered by the state to cotton-growing collective farms by way of products-exchange were reduced. In order to encourage the delivery by collective farms of better-quality cotton, it was, for example, laid down that the price of select-quality, medium-fibre cotton should be some three or more times higher than that of sixth-grade cotton. Premiums are given for yield increases.

Cotton-growing collective farms receive large advances in cash and kind. Advances are given approximately to the extent of 35 per cent of the total sum due to the collective farm for the whole contracted production. The cash advances and part of the advances in kind are given in three payments, and the remaining part of the advances in kind in two payments.

Taking into consideration premiums for increased cotton-plant yield in Central Asia and Trans-Caucasia, collective farms may receive by way of products-exchange approximately three tons of grain for each ton of medium fibre cotton. It must be borne in mind that the yield of wheat on irrigated lands in Central Asia and Trans-Caucasia is no higher than that of the cotton plant. Hence, by means of the products-exchange relationship the collective farms of Central Asia can receive in return for cotton almost three times as much grain as if they were to produce grain for themselves.

The collective farms receive wheat and allocate it amongst the collective farmers in accordance with work-days worked. Industrial commodities go into the shops of the consumer co-operatives and are bought by collective farmers with cash and coupons received from the administration of the given collective farm or in accordance with a list compiled by this administration on the basis of the number of work-days worked on cotton cultivation. Collective farmers receiving cash advances in accordance with their work-days have the opportunity to sell the village consumer-co-operative shop the advances in kind which are due to them. Thus, for example, in the collective farms of the Lenin and Markamat districts, Andijan region, Uzbek S.S.R., the distribution of advances in cash and kind took place every ten days in September-October, 1952, to the extent of 30-40 per cent of the value of one work-day as provided in the estimate, which comprised 3-5 roubles and 1-1.5 kilos of grain.

These are the advantages received by cotton-growing collective-farms as a result of the products-exchange relationship. But this relationship is advantageous also to the state and so to the whole people. If, as a result of the- products-exchange relationship, the cotton-growing collective farms did not receive wheat, they would be obliged to sow wheat over a considerable part of the area now under cotton.

But it is advantageous to the state, and hence to the whole people, that the irrigated lands of Central Asia should be under cotton and not wheat, since under present-day conditions high-priced fine-fibre cotton can be obtained in Central Asia. The cotton yield in Central Asia is four or more times greater than that in the non-irrigated lands, and more than twice as high as in the irrigated lands of the European parts of the U.S.S.R. The Directives of the Nineteenth Party Congress for the Fifth Five-Year Plan set the aim of achieving the following per-hectare yields of cotton: in the districts of Central Asia and South Kazakhstan, up to 26-27 centners; on the irrigated lands in the southern districts of the European parts of the U.S.S.R., up to 11-l3 centners; and on the non-irrigated lands, up to 5-7 centners.

The significance of the rudiments of products-exchange for the development of Soviet agriculture may be seen from the fact that the very great post-war expansion common to all types of agricultural production has been especially marked in the cases of cotton and sugar-beet.

‘The post-war years have seen a particularly rapid development of cotton and sugar-beet output: the gross cotton crop in 1951 was 46 per cent and the gross sugar-beet crop was 31 per cent above the pre-war level.’ (Malenkov, Report to Nineteenth Party Congress, Eng. ed. p. 66.)

Both these crops could develop at such rapid tempos only thanks to products-exchange. If there had not been products-exchange, then the Uzbekistan collective farms would not have achieved such successes in the expansion of cotton production.

The advantages accruing to collective farms as a result of a products-exchange relationship with the Soviet state will be extended to all collective farms in proportion as the system of products-exchange is expanded.

‘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 collective-farm peasantry.’ (Stalin, Economic Problems, Eng. ed., p. 104.)

This means that the products-exchange relationship enables the collective farms to obtain industrial commodities more cheaply than they can by means of commodity-exchange.

In the Soviet Union since the war retail prices have already been reduced on five occasions. But, even so, the prices of a whole range of industrial commodities at the present time are lower under products-exchange than under commodity-circulation. They are lower because the products-exchange relationship facilitates a much more rapid rate of development of productive forces and thus the benefit which accrues to the collective farms from these low prices does not hinder accumulation in state industry, but, on the contrary, facilitates increased accumulation, the enhanced growth of industrial production and the increase in the well-being of the whole Soviet people.

This is the advantage of products-exchange. Constituting a higher form of economic link between industry and agriculture compared with commodity-exchange, products-exchange assists the rapid development of agriculture’s productive forces, and hence the benefits derived by individual collective farms simultaneously contribute to the expansion of the national income as a whole.

As has already been noted above, the basis for the emergence and growth of products-exchange is public property and its expansion. Hence the expansion of the system of products-exchange depends upon an increase in the production of state industry.

‘Such a system,’ Comrade Stalin points out, ‘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’ (p. 94).

But the expansion of the system of products-exchange, although it will demand a large increase in the products supplied by the town to the countryside, will at the same time lead to a tremendous increase in agricultural production, including the production of raw material for industry. It is necessary to introduce the system of products-exchange

‘unswervingly and unhesitatingly, step by step, contracting the sphere of operation of commodity circulation and widening the sphere of operation of products-exchange.’

Government expenditure upon the reduction of prices in the sphere of products-exchange by comparison with commodity-exchange plays precisely the same role as do the milliards expended by the government upon the realisation of technical progress in agriculture during the post-war period.

Gradual but resolute expansion of the system of products-exchange is a necessity at the present time because, as is demonstrated in Comrade Stalin’s great work, collective-farm property and commodity circulation are already now beginning to hinder the vigorous development of the productive forces. These economic features of our national economy are beginning to hinder the development of our productive forces in that they

‘create obstacles to the full extension of government planning to the whole of the national economy, especially agriculture.’ (Economic Problems, p. 76.)

The state defines according to the plan the sown areas, the yield, the extent of tractor work, the number and productivity of socially-owned cattle, the gross production of agriculture, the volume of the compulsory payments and the payments in kind to the M.T.S. But the state does not plan the use of the surplus commodity production of the collective farm and the use of labour-power for definite periods on definite tasks.

Why is it precisely now that these obstacles begin to hinder the vigorous development of productive forces, and why will they in the future hinder them to a still greater degree?

The answer to this question can be given only on the basis of an investigation of those changes which have taken place in collective farm production during the post-war period, and first of all on the basis of an investigation into the results of the amalgamation of the collective farms.

Merging of Collective Farms

The amalgamation of the collective farms has promoted and will promote the vigorous development of the productive forces of socialist agriculture. The growth of the productive forces of socialist agriculture gives rise in its turn to the necessity for the extension of state planning to embrace the whole of agriculture. But the existence of the collective-farm form of property and of commodity circulation creates obstacles to such an extension.

The positive results of the amalgamation of the collective-farms are obvious from the Krasnodar territory, where the sown area of the collective-farms in 1952 exceeded that of 1949 by 9.9 per cent; the area under orchards and vineyards by 21 per cent, under tea 2˝ times, under cotton almost 4 times. The yield of winter wheat in 1951 was 4.5 centners higher than in 1949. Grain yields in 1952 in Krasnodar territory were still higher. The collective farms of the territory in 1951 gave production to the state in the form of compulsory deliveries, contracts and payments in kind to the M.T.S. and also sold at restricted purchase prices very much more than during 1949. At the same time production for sale in the market increased greatly.

The amalgamation of the collective farms has promoted the speedy increase of the gross and marketable production of the collective farms. The collective farms in 1949, after fulfilling compulsory deliveries and payments in kind, sold on the collective-farm market 82.4 thousand centners of grain, and in addition 74.8 thousand centners were allocated for sale, but not sold. Thus, in all, 157.2 thousand centners of grain were allocated to the collective-farm market in 1949. But during 1951, 328.4 thousand centners of grain were sold on the collective farm market and 595.2 thousand centners of grain were allocated for sale but not sold. Thus, in all, during 1951 923.6 thousand centners of grain were allocated for sale in the collective-farm market.

Surplus on Local Markets

Hence the amount of grain allocated for sale on the collective-farm market by the collective farms of the Krasnodar territory increased six-fold during two years. It is noteworthy that in 1951 the amount allocated by the collective farms for sale but not sold exceeded by 81 per cent the amount of grain sold by the collective farms on the collective-farm market in the same year.

This demonstrates that the collective farms cannot, in connection with the growth of gross and marketable production, sell on the local market all the grain which they have allocated for sale. For example, the Ilyich collective farm in the Tyemryuk district had in September 1952 about 150 tons of grain from the 1951 harvest intended for sale but not sold.

In many collective farms the storing of grain for so long leads to its deterioration and a great deal of waste. The Ilyich collective farm was compelled to store grain in nearly 150 private premises belonging to individual collective farmers. To pay for the use of these private premises the collective farm accounted work-days for the storing of grain. In 1951 this collective farm expended 27,000 work-days on the storing of grain but the whole outlay of work-days on grain production of the Ilyich collective farm in 1951 was 162,000. Hence the outlay of work-days on the storing of grain amounted to 16 per cent of the total of work-days expended on grain production.

A different position existed with the sale of milk, in that milk was ‘merchandised’. During 1951, by comparison with 1949, collective farms increased by more than twenty-seven times their sale of milk to the co-operatives, but during this time the sale of milk on the market hardly increased at all. In absolute terms, the sale of milk to the co-operative in 1949 was one-twelfth of the sale on the market but in 1951 it exceeded by more than one and a half times the sale on the market. This fact shows the great power of products-exchange. This example shows that the expansion of products-exchange helps to remove the obstacles standing in the way of the full extension of state planning to agriculture.

Let us take a further example: on the Ilyich collective farm during 1949, after the fulfilment of the contract plan for grapes, there was delivered for treatment to the collective farm wine-making plant 1,168 centners of grapes, and in 1951 2,083 centners – that is, almost twice as much. At the same time the resources of the state wine-making plant situated in the same village were not fully employed, though it could have treated all the grapes, including those going to the collective farm wine-making plant. Such a situation exists on many other collective farms in the Krasnodar territory. At the same time the treatment of grapes in the collective farm wine plants is less productive and of poorer quality than that in the state plants. In the state wine plants the output from grapes delivered amounts to 72 per cent, whereas in the collective farm plants it is only 60 per cent. In addition in the state plant the by-products are used to produce alcohol, tartar and marrow oil of high technical quality, whereas in the collective farm plants by-products are at best used as pig food.

The expansion of the system of products-exchange and its extension to viniculture will lead to an immediate increase of output and will widen the scope of state planning in this branch of agriculture.

New Construction

The collective-farm group form of property hinders the control by state planning of capital construction in the collective farms.

In Pravda of June 14, 1952, details were noted of improper expenditure of collective farm resources in several districts of the Georgian S.S.R. In the Makharadze district, for example, a number of collective farms undertook the construction of clubs and collective farm offices, the estimated cost of which was from 2 to 3 million roubles. Pravda of June 15, 1952, reported that in Uzbekistan on many collective farms a considerable part of the resources of the indivisible fund had been expended not upon the construction of buildings for productive purposes, electric plant, irrigation schemes, and the purchase of cattle for the collective farm herd, but upon secondary needs.

In connection with the further growth of the gross and marketable production of the collective farms and the growth of the indivisible funds, the question of the correct use of the indivisible fund assumes still greater importance.

Further increase in livestock production demands a thorough mechanisation of labour-consuming tasks. At the same time the mechanisation of labour-consuming tasks in livestock breeding, which has been carried out so far in the main on the account of the means of production belonging to the collective farms, lags behind the rate of increase in the number of socially-owned cattle.

The result of this is that the growth in the number of socially-owned cattle and the increasing of the productivity of these cattle are carried through with a simultaneous and considerable increase in the expenditure of the labour of collective farmers in livestock breeding. But in cultivation and especially in grain production, where mechanisation is carried out on the account of the state-owned means of production, gross production rises sharply with a simultaneous reduction and easing of the collective farmer’s labour.

Let us consider, for example, the figures for the Victory collective farm in Krasnodar territory. The expenditure of labour upon grain cultivation fell from 1949 to 1951 from 50,065 work-days to 46,200 work-days, with a simultaneous increase in gross production from 36,356 centners to 59,003 centners. For each work-day expended on the Victory collective farm in 1949, 72 kilos of grain were produced, and in 1951 – 127 kilos. Hence, the productivity of labour in grain production on the Victory collective farm grew by more than 76 per cent. But the growth of collective livestock production was more than doubled between 1949 and 1951 – from 32,579 to 74,320 work-days; the production of livestock and collectively-owned cattle approximately doubled. Hence the expansion of the production of livestock products took place at the expense of a greater expenditure of human labour.

It appears that the inadequate rate of growth of the mechanisation of labour-consuming processes in livestock breeding is explained in part by the fact that it, in contrast to the mechanisation of cultivation, takes place not at the expense of state resources but at the expense of collective-farm resources. This restricts state planning of the mechanisation of work in the livestock departments of the collective farms.

Increasing the responsibility of the M.T.S. for the mechanisation of work in the livestock departments, for the development of livestock production, obviously requires the inclusion of zoo-technicians and veterinary surgeons on the staffs of M.T.S. at the expense of a reduction of the staffs of district agricultural offices.

It will also be necessary to make changes in the remuneration of M.T.S. workers and mechanics engaged in work in the livestock departments. At present M.T.S. workers receive premiums only for crop-yields, but not for increases in the number of socially-owned livestock, for increases in the productivity of these livestock. Mechanics engaged in work in the livestock departments likewise are given no incentive to raise the’ productivity of cattle. This state of affairs must be reviewed.

Organisation of Work

In connection with the amalgamation of small collective farms, we are beginning to feel the obstacles which collective farm ownership places in the way of state planning of the use of labour power in the collective farms. The amalgamation of the collective farms has created the material foundation for a strengthening of co-operation in the work of tractor teams and field-work teams (Brigades).

At present many tractor teams are attached to field-work teams or to particular collective farms. There are even M.T.S. which serve only one collective farm, for example, the Staro-Titarovsk M.T.S. in the Krasnodar territory and others. The amalgamation of the collective farms makes it possible, therefore, to have a unified working plan and ten-day rota for tractor and field-work teams. Formerly, when one tractor team served several field-work teams or several collective farms, this was not possible. To secure the most effective use of M.T.S. machines and of labour power such unified rotas are necessary.

The organisation of work in accordance with time-graphs is impossible without a unified rota for tractor and field-work teams. But the existence of the collective-farm form of property places obstacles in the way of unified rotas. In the existing model agreement between M.T.S. and collective farms, it is stated that the M.T.S. is obliged to compile ten-day rotas only for tractor-teams. The field-work teams are given their rotas either by the agronomist of the collective farm or by the collective farm chairman. The contradictions of such a position are already being felt by the M.T.S. workers and collective farmers. Comrade S. Bondarenko, deputy to the Odessa Regional Soviet and leader of a field-work team in the Path to Communism collective farm, wrote about this in Izvestia, November 25, 1952:

‘Such a practice (i.e. the allocation of rotas to field-work teams by the collective-farm chairman on a day-to-day basis) complicates the mutual relations between the tractor teams of the M.T.S. and the field-work teams.... Day-to-day rotas, though not incompatible with a plan, give rise to uncertainty on the part of the collective-farm team leader and the M.T.S. tractor-team leader.’

Underlining the need for unified rotas of tractor and field-work teams, Comrade Bondarenko notes that prior to the amalgamation of the collective farms such a possibility did not exist, but now it does; now, a five- to ten day plan of operations can be compiled by the leader of the tractor team, together with the leader of the field-work team. ‘We shall be in a better position to consider the work before us and to prepare for it.’ At the Medvedovsk M.T.S., Krasnodar territory, the district agronomist compiled, together with the collective-farm agronomist, a joint rota for the tractor and field-work teams in the presence of both team leaders. The rota was signed by the district agronomist of the M.T.S. and the agronomist of the collective farm.

At Protochna M.T.S., Slavyansk district, Krasnodar territory, on the initiative of the tractor-team leader, the Communist Comrade P. A. Vashenko, the experiment of uniting in the one person the leadership of the tractor team and the third field-work team of the Path to Communism collective farm was carried through during the 1952 spring sowing. For nearly three months of 1952 Comrade Vashenko directed the tractor and field-work teams and completed an exemplary spring sowing. The report of the Protochna M.T.S. on the yields received by the collective farm Path to Communism, broken down according to work-teams, shows that the third work-team’s yield of spring corn was much higher than those of the other work-teams of the collective farm. At the same time the yield of winter corn, the sowing of which was carried out prior to the unification of team leadership, differed little from the yield obtained by the work-teams.

This new experiment, reflecting the desire to ensure, under conditions of a high level of mechanisation of production, unity of action between the M.T.S. and the collective farms, merits serious attention and study. It is interesting in that the amalgamation of the collective farms has laid the objective basis for a strengthening of unity between the work of the M.T.S. and that of the collective farms, for an expansion in the work of the M.T.S. and an increase in their responsibility for collective-farm development.

Role of Machine-Tractor Stations

With the amalgamation of the collective farms and the increase in the number of agronomists attached to the social economy of collective farms, the view has become common in certain places that such collective farms do not stand in need of guidance from the agronomists of the M.T.S. – that all that they need from the M.T.S. is machinery.

This implies that the role of the M.T.S. is reduced to that of a hiring centre, and that the significance of the state means of production in agriculture is diminished. Thus, at a meeting of party activists in Temryuk district, one of the speakers compared the collective farm to an infantry formation and the M.T.S. to a tank unit attached to it. Such an outlook is clearly incorrect and harmful. It contradicts Stalin’s propositions concerning the role of the M.T.S. in collective farm production.

The mutual relations between the M.T.S. and the collective farms as a socialist form of the economic link between state industry and the collective farms have a common basis in the products-exchange relationship.

This is seen in that, firstly, the basis of these relations includes the development of public property; secondly, these relations restrict commodity circulation and therefore remove obstacles in the way of extending the degree to which agriculture is embraced by state planning; thirdly, they are advantageous to the collective farms and to the whole people in that, by removing obstacles to the extension of the control of agriculture by state planning, they facilitate the speedy growth of the productive forces of socialist agriculture.

The essential difference between products-exchange and commodity-exchange is that commodity-exchange expresses not merely the producers’ social links, but also their isolation. Products-exchange, like the mutual relations between M.T.S. and collective farms, and unlike commodity-exchange, expresses the social links of producers and their mutual assistance and co-operation, their unity on the basis of the development of public property.

Therefore, the extension of the system of products-exchange will lead to the raising of collective-farm property to the level of public property, whereas an extension of the sphere of operation of commodity circulation by means, for example, of the sale of M.T.S. to become collective-farm property could have led only to the alienation of collective-farm property from public property, could have led not to an approach to Communism but, on the contrary, to a retreat from it.

An extension of the sphere of operation of commodity circulation by means of the transformation of means of production into commodities would have rendered impossible for the collective farms that technical progress which has advanced so swiftly during the post-war period. Comrade Stalin has pointed out that the milliards of roubles spent by the Soviet State on technical progress in agriculture would have been beyond the means of even millionaire collective farms.

Auxiliary Enterprises on Farms

Comrade Malenkov, in his report to the Nineteenth Party Congress, pointed out that in many collective and state farms the practice of setting up auxiliary enterprises for the manufacture of building materials and other industrial products had become widespread. Experience has shown that this constitutes a brake upon the development of agriculture.

‘This mistake must be rectified and all the efforts of the collective and state farms must be concentrated entirely on further developing diversified farming and upon making the fullest use of their economic potentialities and natural conditions for a maximum increase in the output of grain, cotton, sugar-beet, flax, potatoes, meat, milk, eggs, wool, vegetables, fruit, tea and other agricultural produce. As for building materials and other manufactured goods, our state industry and producers’ co-operatives are in a position to supply the collective and state farms with all these things at a lower cost and it is their duty to do so.’ (Malenkov, Report to Nineteenth Party Congress, Eng. ed., p. 76.)

The setting-up of auxiliary enterprises on the collective and state farms, which has been widely advertised in our press, does not imply a strengthening of the collective farms’ ties with state industry, but the isolation of the collective farms from state industry. It narrows the basis for the development of the collective farms’ productive forces, since the social economy of the collective farms would thus develop not on the basis of mutual assistance and co-operation with that leading force of national economy, socialist industry, but on the basis of their isolation from it, which inevitably would lead to primitive methods of work and to a reduction in the productivity of labour.

The development of the social economy of the collective farms must be brought about not on the basis of their development in isolation, but on the basis of the widening and strengthening of their links with public property through the further development of the rudiments of products-exchange. The expansion of the system of products-exchange and the restriction of the sphere of operation of commodity-exchange constitute a process of development of socialist production-relations, preparing the transition to the higher phase of Communism.

Comrade Stalin shows that under Socialism commodity-production and commodity-circulation and, consequently, the sphere of operation of the law of value, are limited by the existence of social ownership of the means of production, by the operation of the law of planned development of the national economy – consequently they are limited also by our annual and five-year plans which constitute approximate reflections of the requirements of this law. Therefore the law of value cannot have any significance as a regulator in our socialist production. It has significance as a regulator (within definite limits) only in the sphere of circulation, mainly of commodities for personal consumption. Consumer goods, as a result of the existence of collective-farm property, are produced and realised in our society as commodities, subject to the operation of the law of value.

New Content in Old Forms

A peculiarity of the development of socialist production-relations lies, inter alia, in the fact that the use of the old forms of commodity-exchange relations constitutes a necessary means for the development of products-exchange relations which are essentially new.

This is reflected in the fact that under the products-exchange relationship, such a category as price is retained. On the basis of the products-exchange relationship collective farms receive the products of urban industry more cheaply, but nevertheless for money; the machinery of commodity circulation serves also as the machinery of products-exchange, in so far as collective farmers purchase for cash in the consumer-co-operative shops products which have been allocated by the state to the products-exchange fund.

Whereas, however, that quantity of consumer goods which has been drawn into the sphere of operation of products-exchange is a quantity of commodities only in form, the remaining quantity of consumer goods is a quantity of commodities, subject to the operation of the law of value, which retains within definite limits the role of regulator in the sphere of circulation of these commodities. Hence, the products-exchange relationship at the present time, from one aspect exists side by side with commodity-exchange relationships, but from the other makes use of the commodity form to develop a new content.

Therefore, the products-exchange relationship must. inevitably go through a series of stages of development from those rudimentary forms which exist at present to the transition to the Communist principle of distribution which will be realised in the form of a direct accounting of the expenditure of labour in terms of labour time, when there will be no place for commodity circulation. The Communist principle of distribution of products according to need, points out Comrade Stalin, precludes

‘all commodity exchange and, hence, the conversion of products into commodities and, with it, their conversion into value’. (Stalin, op. cit., p. 102.)

The development of the products-exchange relationship demands a closer link between state industry and the collective farms, a more specific organisation of products-exchange. Thus, whereas, so far as Central Asia is concerned, the sale of grain to cotton-growing collective farms in exchange for their product stimulates the development of cotton-growing, in the Krasnodar territory and other new areas of cotton cultivation such a sale of grain has no sense at present, in so far as the collective farms of these areas produce, besides cotton, a great deal of grain.

An inadequate estimation of the demands of the collective farms in determining the variety and number of products to be allocated for products-exchange leads to the accumulation of surplus stocks in some areas. Thus, for example, in the Volokolamsk district, Moscow region, during 1952 there was formed a surplus stock of sugar intended for flax-growing collective farms.

All this implies that the extension of the products-exchange system makes it necessary to reorganise the organisational forms of the link between state industry and the collective farms. The statement of Comrade Stalin concerning 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 products in the country and eventually also to distribute it by way, say, of products-exchange’. (Stalin, op. cit., Eng. ed. p. 20.)

constitutes a brilliant theoretical discovery, having major practical importance for the further expansion of the sphere of operations of products-exchange and for the victorious building of Communism.

‘Questions of Economics’, Moscow, No. 1, 1953
Communist Review
, London, September and October 1953

Transcribed by George Gruenthal

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