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Title:      Economic Problems of Socialism in the U.S.S.R.
Author:     Joseph Stalin (1879-1953)
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A Project Gutenberg of Australia eBook

Title:      Economic Problems of Socialism in the U.S.S.R.
Author:     Joseph Stalin (1879-1953)




CONTENTS

REMARKS ON ECONOMIC QUESTIONS CONNECTED WITH THE
NOVEMBER 1951 DISCUSSION
   1. Character of Economic Laws Under Socialism
   2. Commodity Production Under Socialism
   3. The Law of Value Under Socialism
   4. Abolition of the Antithesis Between Town and Country, and
      Between Mental and Physical Labour, and the Elimination of
      the Distinction Between Them
   5. Disintegration of the Single World Market and Deepening of
      the Crisis of the World Capitalist System
   6. Inevitability of Wars Between Capitalist Countries
   7. The Basic Economic Laws of Modern Capitalism and of Socialism
   8. Other Questions
   9. International Importance of a Marxist Textbook on Political
      Economy
  10. Ways of Improving the Draft Textbook on Political Economy

REPLY TO COMRADE ALEXANDER ILYICH NOTKIN

CONCERNING THE ERRORS OF COMRADE L. D. YAROSHENKO
   I. Comrade Yaroshenko's Chief Error
  II. Other Errors of Comrade Yaroshenko

REPLY TO COMRADES A. V. SANINA AND V. G. VENZHER
   1. Character of the Economic Laws of Socialism
   2. Measures for Elevating Collective-Farm Property to the
      Level of Public Property



To the Participants in the Economic Discussion



REMARKS ON ECONOMIC QUESTIONS CONNECTED WITH THE NOVEMBER 1951 DISCUSSION


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 laws.

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-Dhring_, 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." 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."

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
intelligent application.

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 is
untrue.

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 them.

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."

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-Dhring_ 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-Dhring_ 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
socialized.

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
immediately thereafter?

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 time.

The answer to this question was given by Lenin in his writings on
the "tax in kind" and in his celebrated "cooperative plan."

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 justified
itself.

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
exploitation?

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 discussion.

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 socialist
production.

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 family.

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 working class.

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 also exist.

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 production.

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
economy.

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 overproduction.

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
unprofitable.

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 production.

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". 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
for us.

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 labour.


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 system.

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 world market.

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 world
market.

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 valid?

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"--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 inevitable.

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 profits?

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 miracles.

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 socialist aims.

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 exist.

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
either.

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 them.

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 techniques.

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 socialism.

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 socialism?

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, Gatovsky,
etc.


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
colonial system.

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.

J. Stalin
February 1, 1952




REPLY TO COMRADE ALEXANDER ILYICH NOTKIN


Comrade 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 effective.

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.

Consequently:

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 productive
forces.

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 commodities.

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." 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 regulating one.

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 diminish.

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 system.

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.

J. Stalin
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 mentioned documents?


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, profoundly
erroneous.

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 organization."

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."

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."

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." 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 productive forces."

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 productive forces.

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.

Marx said:

"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."

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 from them.

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."

Marx says:

"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."

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
foundation.

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 nature.

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." 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 understood.

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
Science."

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), that "labour will become a pleasure instead of being a
burden" (Engels), 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 political
economy.

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." 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."

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
formations.

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."

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"; 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 reproduction."

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
citizens."

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, he miscalculated.

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.

Marx says:

"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 production."

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 vision.

What is the aim of socialist production? What is that main purpose to
which social production should be subordinated under socialism?

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 society.

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."

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 reproduction."

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. There should be no such interconnection in development
between Departments I and II under socialist conditions." 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."

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 department."

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-Dhring_, criticizes Dhring'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 system.

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.

Conclusions:

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 "opinion";

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.

J. Stalin
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 absolutely
incorrect.

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" them.

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 _Anti-Dhring_:

"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."


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-Dhring_.
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 body.

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
stations.

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 production.

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 of history.

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 Dhring's "economic commune," which functions in the
conditions of commodity circulation, Engels, in his _Anti-Dhring_,
convincingly shows that the existence of commodity circulation was
inevitably bound to lead Dhring'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 products-exchange.

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 present-day
conditions.

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.

J. Stalin
September 28, 1952



THE END




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