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THEORY INDEX

The Stalinist System
(The Internal "Evolition" Towards "Liberalization")

Written by Hiroyoshi Hayashi (1972)
Translated by Roy West


Contents
  1. The Laws of Commodity Exchange and Socialism
  2. The Relations of Production Under the Stalinist System
  3. The "Socialist" Planned Economy and the Category of Capital
  4. Economic Reforms and the Bourgeois gEvolutionh of the Stalinist System
  5. The gOverallh Development of Commodity Production and the gShift to Communismh
  6. Criticism of eSocialistf Economics

C. The gSocialisth Planned Economy and the Category of Capital
The Reality of the gPlanned Economyh

Since the official recognition of the gobjectiveh existence of the law of value in Soviet gsocialisth society, it has been endlessly repeated that the principle economic law of Soviet society is the law of planned production, not the law of value. In other words, although the gobjectiveh existence of the law of value is recognized, it is merely gmade use ofh for the development of the socialist planned economy, and thus ultimately the subject is the gprinciple of planningh. Such a view, at least before the economic reforms of the sixties, corresponded to objective conditions, and was thus easily understood. What, then, was the supposed gsocialisth content of the Soviet planned economy? This is the question that we must examine here. First we will examine its concrete content, and then theoretically consider the meaning of a planned economy on the basis of commodity production.

The foundation of gplanningh, needless to say, is the fact that capital exists as state capital. The state organs make plans for production and distribution by means of the lever of social surplus- value that is turned into state capital and absorbed in finances. If one looks at the circulation of the means of production of state capital (i.e. between nationalized enterprises), which Stalin said was not the exchange of commodities, the state organs create and regulate a ggoods balanceh and a distribution plan in the most important means of production, with lower state organs controlling the remaining means of production. Prior to the economic reforms, separate material balances were created for about twelve thousand means of labor and six thousand objects of labor. The state, with its centralized rule and emphasis on the in-kind form, controlled the whole economy with administrative orders, and this was the crux of gplanningh. In addition, by means of state budget expenditures, new enterprises were created, existing ones expanded and reformed, and the genterprise fundh expanded.

As for the relationship between the state and the kolhozy, in the past there was a great deal of space for direct compulsion on the part of the state with compulsory provision of goods or payment in-kind for MTS. (This has now become a pre-payment system in which the state buys products from the kolhozy farms through orders, but the prices are still unilaterally determined by the state). Ultimately, the sale of consumption goods to consumers is also under state control, with state-run enterprises accounting for two thirds of the total sales, and the cooperative kolhozy the rest. However, as gsocialisth economics itself emphasizes, although payment in-kind is the dominant form in this gplanningh, this is based not on gthe social combination of peoplefs labor and their labor productsh (Marx), but rather upon the gutilizationh of the value forms:

To lead the planned national economy, the utilization of such levers as the law of value, commodities and money is extremely important. Included in the national economy plan is the cost-price of products, the money income of enterprises and the national income expressed in money income, as well as its distribution, commodity exchange, credit, finance, and various other indices. The index of value and balance play an important role in the national economy by ensuring correct proportionality. They also have great importance for the planned, centralized direction of investment, as well as other state provisions for housing construction, social and cultural spending. Money and credit are employed in order to correctly and profitably control the allotted material funds, carry out the plan to lower the cost price of products and increase the profitability of production and the accumulation within enterprises.  [Keizaigaku ky?kasho, p. 721.]

The fact that the gplanh appeared to be driven by the form of goods in-kind is the characteristic of a state economy, and does not indicate a socialist nature. For example, in bourgeois states under a controlled economy (i.e. under wartime conditions), the amount of use-value, or products in-kind, is the principle concern. In other words, instead of individual companies aiming for profit, the quantity of use value becomes more important for the state than the price expression of value. Stalin claimed that it was possible to advance towards real socialism by replacing commodity exchange with gproducts-exchangeh, and he thought this had already been realized in the state enterprises. However, gproducts-exchangeh is a problem of a dimension totally different from socialism, and is only the embryonic form and starting point of commodity production.

Moreover, exchange between state enterprises was not simply gproducts-exchangeh since the gproductsh unmistakably had the form of value. According to Stalin, gproductsh only had prices for the sake of economic calculation, and this was only the gouter-crusth of a commodity. However, the state enterprises were managed according to an independent accounting system. The funds (capital) for each enterprise were allotted by the state, and in cases where enterprises ran a deficit they were supported by subsidies as long as they could carry out the given state plan. However, each enterprise was required to lower its gcost-priceh as much as possible to ensure gprofitabilityh. This need to raise productive power to order to ensure gprofitabilityh is a form that only appears in bourgeois society. Each enterprise owned means of production, and through their working assets were able purchase raw materials and subsidiary materials. This trend was pushed forward even further by the economic reforms in the sixties. Even long before the reforms, each enterprise owned an genterprise fundh which belonged to the enterprise, not to the state. The state enterprises thus, in many respects, maintained their independent nature as genterprisesh. This was concealed under the Stalinist system, but with the economic reforms this is inevitably manifested as a crucial element. More precisely, economic reform is itself the inevitable outcome, or legal expression, of the gevolutionh of the state enterprises as genterprisesh.

gPlanningh in the Soviet Union was not socialist gplanningh, but a forcible method for heavy industrialization, i.e. state capitalistic accumulation. The surplus value, which was squeezed from the peasants through the turnover tax [nalog s oborota] and from the workers in the form of edeductions from profitsf [otchislenie ot pribylei], was collected, and turned into state capital. This expressed the importance and necessity for Soviet Society to advance industrialization. The accumulation of national capital in backward Russia, which could not necessarily rely on the exploitation of industrial workers for capital accumulation, had to use the method of state accumulation, that is, gplanningh. In this sense, the gsocialisth method of gplanningh was in fact a means to forcibly develop the national economy.

gPlanned Economyh as a Means for State Capitalist Accumulation

The gsocialisth planned economy in the Soviet Union was a reflection of the forcible accumulation of national capital, and contained not one ounce of socialist content. In this period, the pressing need was to accumulate national capital, not introduce a system to ensure that state capital could operate gefficientlyh. The systematic guarantee of this was the Stalinist system, and its method was the so-called gplanned economyh, i.e. the accumulation of national capital as state capital. Without extensively utilizing so-called gextra-economic compulsionh, it is doubtful that there would have been any way for a large backward country to form national capital in the age of imperialism and emerge as a great bourgeois state. Each enterprise was forced to concentrate only on production. This is clear from the fact that the index of gtotal outputh was given the top priority, reflecting the demands of the period for the forced accumulation of national capital in the form of state capital. More than the formation of gvalueh, it was the formation of ggoodsh that was important. This is why today the Stalinist system can be called ga goods in-kindh economic system, because the capital directly allocated by the state gaccording to the planh held significance, above all, as use-value, not value. The formation of national capital was materially expressed, for example as gheavy industrializationh. If capitalist development is observed, not from the viewpoint of individual capital, but from the state perspective, materially speaking it can be called gheavy industrializationh (the bourgeoisie evaluated postwar Japanese capitalism from this national perspective). Since the formation of national capital in the Soviet Union directly took the form of state capital, and this was allocated by the state gaccording to the planh, it was necessary for the Stalinist system to place priority on use-value rather than value. Of course, this ultimately was the allotment of state capital, not the direct arrangement of the means of production.

We must reject the fantasy that the Soviet gplanned economyh had socialist content. Even in the era of Stalin prior to economic reforms, when the gplanned economyh was most thoroughly enforced, it did not have socialist content. Socialism is not a system of extra-economic compulsion (and therefore is not a question of gutilizingh the law of value, etc). Rather, socialism concerns the direct realization of the determination of value, i.e. the realization of a system of production and distribution based on labor expenditure.

In response to our thesis that Soviet gsocialismh is in fact state capitalism, and its gsocialisth methods actually represent the forcible accumulation of state capital, some may wonder where exactly does gcapitalh, or the capital=wage-labor relationship exist. In Russia money (roubles) is invested to be gprofitableh, in other words it was self- augmenting value. In this case, when individual state enterprises gdeliveredh products, it was not important whether or not they received money. The fundamental point was that these goods were realized as value (and as profit-included value). But what is self-augmenting value if not capital? This is the most general and abstract, and thus non-conceptual, definition of capital. In industrial capital, this self- augmentation is made possible through the exploitation of the proletariat. However, other forms of capital do not necessarily rely on the exploitation of the proletariat within production. State capital in the Soviet Union was formed and augmented not only through the exploitation of the proletariat, but also through the exploitation of the peasantry through circulation. This demonstrates that gfixed fundsh and gdistribution fundsh, far from not being capital, are in fact one of its particular forms.

gFixed fundsh, for example, are allocated by the state. A large part of the gprofith of enterprises is collected by the state, and becomes part of state revenue along with the turnover tax, and forms the gfixed fundsh which are in turn distributed to each enterprise or used to create new enterprises. How can the gfixed fundsh, created and augmented in this fashion, be anything but capital? Does the mere fact that it is called a gfundh deny its essence as self-augmenting value? The confusion caused Soviet ruling class causes by calling every form of money a gfundh, is identical to the bourgeoisiefs use of this word to refer to money as currency or money as money-capital. Of course, in the Soviet Union, the accumulation of capital takes the form of the accumulation of state capital, not individual capital, but this does not mean that it has gsocialisth content. In the next chapter we will examine the contradictions inherent to the development of national capital (capital accumulation) in this form.

What is the historical significance of this form of capital accumulation? This has to be understood within the context of the history of capitalism. In the early nineteenth century, industrial capitalism had already assumed a clear shape, particularly in England. This was centered in particular on the textile industry where mechanization and the factory system had developed. Capitalism, established in England, spread to other western countries and Japan, and by the late nineteenth century it had already entered the era of imperialism based on the concentration of capital and the formation of monopoly capital. But instead of the old capitalist state of England, this concentration of capital and formation of monopoly was more prominent in Germany, the United States, as well as Russia. Even though these latecomers to capitalism lacked Englandfs foundation based on a long period of accumulation of individual capital, and trailed behind in the domestic accumulation of capital, in response to the need to rapidly accumulate capital they were able to (or had to) rapidly create a massive amount of centralized capital by concentrating small capital through the joint stock company system and banks, or absorbing all of the national surplus-value and converting it into capital.

However, at the dawn of the twentieth century, the method of Germany was already completely inadequate for a colonial, or semi-colonial, large backward country to resist the menace of imperialist rule, while developing their national economy. Today, regardless of whether a country belongs to the gsocialisth bloc or not, most economically backward countries rely on the method of state capitalism. In this sense, there is no essential difference between countries like the USSR and China and countries such as India and Egypt. However, it could be said that there is a decisive difference in terms of the gefficiencyh of state capitalism between the gsocialisth countries who carried out gnational-democratich revolutions thereby incorporating agriculture into the state capitalist system by means of agricultural collectivization, and those countries (e.g. India or Egypt) that largely left feudalistic relations in agriculture untouched. The former, on the basis of domestically accumulated capital, took the path of gsocialism in one countryh and gself-renewalh and their accumulation of national capital was forced and rapid, whereas the latter relied on the capital of advanced capitalist countries (and are therefore dependent and exploited), and their development has been stagnant and marked by frequent collapse. Countries such as India and Egypt often call their state capitalist systems gsocialismh, but this is only a manifestation of the internal demand for backward countries to maintain national independence in the twentieth century amidst imperialistic advanced capitalist states, and achieve their own national development. To this extent, state capitalistic methods have great historical significance. Without the high national economic development of large countries such as the Soviet Union, China and India, world socialism would be nothing more than a daydream. History has shown that even if socialism had been victorious in Europe or North America, it still would not have been a simple task of human history for these large countries to automatically become socialist.

The gPlanned Economyh and Commodity Production

Without the sublation of the law of value (commodity production), gplanningh in the real socialist sense is impossible. This idea should be obvious to Marxists. The law of value means that the allotment of the aggregate labor for the production of various kinds of goods corresponding to societyfs needs is not yet under conscious control, and instead is carried out through the actions of mutually independent individual private producers or capitalist companies as a sort of gnatural inevitableh law. Therefore, the existence of the category of value is an expression of the fact that gthe process of production has mastery over man, instead of the oppositeh.(*) The fact that labor takes the form of value clearly shows that a society lacks the necessities for socialist gplanningh. If one claims a gplannedh economy on the foundation of commodity production is possible, we would say that the essence of such gplanningh is bourgeois. The modern monopoly bourgeoisie has already carried out this sort of gplanningh for many years for business adjustments, and by the national bourgeoisie for the sake of national economic development. Saying that gsocialisth planning is possible alongside commodity production, implies that the capitalist economy could also be gsocialisticallyh planned. This ideology is precisely the sort of reformist fantasy used to deceive the proletariat.  [(*)Marx, Capital vol. 1, p. 175.]

Looking for the essence of socialism in gplanningh is extremely one-dimensional. Planning can only have a socialist nature in the following sense. For Marx, the historical character of the various forms of commodity value become perfectly clear when separated from the society of commodity production, and this provides the basic design of socialist society.

Let us finally imagine, for a change, an association of free men, working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labor force. All the characteristics of Robinson's labor are repeated here, but with the difference that they are social instead of individual. All Robinson's products were exclusively the result of his own personal labour and they were therefore directly objects of utility for him personally. The total product of our imagined association is a social product. One part of this product serves as fresh means of production and remains social. But another part is consumed by the members of the association as means of subsistence. This part must therefore be divided amongst them. The way this division is made will vary with the particular kind of social organization of production and the corresponding level of social development attained by the producers. We shall assume, but only for the sake of a parallel with the production of commodities, that the share of each individual producer in the means of subsistence is determined by his labour-time. Labour-time would in that case play a double part. Its apportionment in accordance with a definite social plan maintains the correct proportion between the different functions of labour and the various needs of associations. On the other hand, labour-time also serves as a measure of the part taken by each individual in the common labour, and of his share in the part of the total product destined for individual consumption. The social relations of the individual producers, both towards their labour and the products of their labour, are here transparent in their simplicity, in production as well as in distribution.   [Ibid., p. 171-2.]

Here Marx clearly wrote gapportionment in accordance with a definite social planh, and it is precisely gplanningh in this sense that makes socialism really socialism. Here there is absolutely no question of gutilizing the law of valueh, because the fundamental precondition of this gplanningh is the sublation of the law of value.

Since the appearance of Stalinist gsocialismh, gplanningh and gnationalizationh have been equated with socialism. But socialism is certainly not the same as gplanningh or gnationalizationh, and cannot be reduced to this. Socialism does start from the nationalization of the means of production, but at the same time one clearly cannot speak of the significance of planning or nationalization in isolation from the class character of the state. Only gnationalizationh under a true proletarian state can have significance as the starting point of the real socialization of the means of production, and provide nationalization a socialist character. The historical experience of the nationalization of the means of production or the gplanned economyh in bourgeois states (both economically advanced as well as gdeveloping countriesh) demonstrates that this cannot have socialistic significance. In fact, these methods were used to intensify bourgeois rule. The living reality of the USSR and China clearly shows that nationalization and the gplanned economyh under workersf and peasantsf states (peoplefs states) cannot achieve true socialist content.

Of course, under certain conditions gplanningh does become an essential moment of socialism, and there can be no such thing as socialism which is not a gplannedh system. But planning in socialist society is one of the outcomes of social production being under the conscious control of human beings, and so socialism certainly cannot be dissolved into the concept of a planned economy. Socialism is, first of all, a social relationship between working people, and is more than just the functional character of society. This should be clear from the fact that most bourgeois states today talk about the gplanned economyh. To identify socialism with a planned economy, or with a planned economy under commodity society, leads to terrible confusion among the workers who are fighting socialism. This view is essentially bourgeois and reactionary.

Nevertheless, Stalinists, and to a large extent Trotskyists, identify socialism with gnationalizationh and gplanningh. They either forget or ignore the fact that if a state that carries out nationalization and planning does not have the class character of a true proletarian state, then this nationalization and planning will not have socialist content. Instead, they make gnationalizationh and gplanningh the criterion for judging whether or not a country is a proletarian state or socialist society. Even if commodity production generally operates and production for gprofith is developed, they still insist that countries like the USSR and China are socialist (or at least workersf states) because they have a gplanned economyh. Nevertheless, as long as gplanningh in the Soviet Union and other countries takes place upon the foundation of a commodity society, this does not signify socialism and certainly will not in the future.



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