Stalin and the Question of 'Market Socialism' in the Soviet Union After the Second World War - Vijay Singh

Vijay Singh

The International Seminar 'Stalin Today' takes place in Moscow on the 77th anniversary of the October Revolution, after the final disintegration of the Soviet Union and when the working class of the states which have arisen on its ruins is taking its first steps directed against the renewed Rule of Capital. Does Stalin have anything to tell us about these developments ? It is suggested here that his last major work, 'Economic Problems of Socialism in the U.S.S.R.', is a central point of departure for examining the 'market reforms' which were introduced in the Soviet Union after 1953 and for coming to a conclusion about their economic and political character.

What was the context of the economic discussions ?

The C.P.S.U. (B) considered that the foundations of Socialist society had been laid in the main by 1935. The 18th Congress of the Party thought that the transition to Communist society was the path forward for the further development of the country. A committee was constituted to draft the new party programme and in 1941 the State Planning Committee was requested to formulate a 15 year programme of economic development designed to lay the foundations of Communist society. This perspective was disrupted by the Nazi invasion but it was resumed immediately in the post-war period. In 1947 Malenkov noted at the Nine Party Informburo Conference that the party was: 'working on the preparation of a new programme of the C.P.S.U.(B). The existing programme of the C.P.S.U.(B) is clearly out of date and must be substituted by a new one' (Malenkov, G.M. 'The Activities of the C.C. of the C.P.S.U. (B)' in For a Lasting Peace, For a People's Democracy, Bombay, 1948, p.79.). The task was reiterated at the 19th Party Congress in 1952. Consonant with this, when presenting his Report on the Fourth Five Year Plan to the Supreme Soviet in 1946, N.A. Voznesensky recalled the task which had been entrusted to him in 1941. The plan, he argued:

'envisages the completion of the building of a classless socialist society and the gradual transition from socialism to communism. It envisages the accomplishment of the basic economic task of the U.S.S.R. namely to overtake and surpass the main capitalist countries economically, as regards the volume of industrial production per head of the population' (Voznesensky,N.,'Five-Year Plan for the Rehabilitation and Development of the National Economy of the U.S.S.R. 1946-1950', Soviet News, London,1946, p.10.). Stalin concurred with this programmatic perspective as is clear from his response to a query by a British correspondent who asked whether he considered it possible to construct 'Communism in one country'. Stalin replied that it was 'perfectly possible, especially in a country like the Soviet Union'. (Stalin, J., 'On Post-War International Relations'. Soviet News, London, 1947, p. 13).

Stalin's critique in 'Economic Problems' of the Gosplan economist L.D. Yaroshenko indicated that pronounced survivals of the views of Bogdanov persisted into the post-war period. Yaroshenko did not represent an isolated viewpoint. Yudin suggested that there was a veritable trend amongst the scientific workers, the 'Yaroshenkovschini', which marked a recidivist throwback to 'Trotskyism-Bukharinism-Bogdanovism'. Bogdanov it will be recalled was the author of influential pre-revolutionary textbooks of political economy. In philosophy he adopted the views of Mach and Avenarius which had prompted Lenin to pen a reply in the form of 'Materialism and Empirio-Criticism'. In 1917 he had supported quasi-Menshevist positions to the effect that the material conditions did not exist in Russia for socialist revolution. In the field of culture he argued for a 'pure proletarian culture' which negated the pre-revolutionary heritage. In the last period of his life he developed an 'organisational science',which he called tektology, arguing that structural relations could be generalised as formal schemes as in relations of magnitude in mathematics ('Filosofskaya Entsiklopediya', Volume I, Moscow, 1960, p.177.). Such views were clearly distant from the propositions of dialectical materialism, historical materialism and Marxist political economy. Bogdanov commanded an extraordinary influence amongst the Russian left including Lunacharsky, Bukharin and Gorky. His views permeated the writings of Bukharin on questions of political economy, historical materialism and questions of science and technology.

Stalin pointed out that Yaroshenko underplayed the significance of the relations of production, overrated the role of the productive forces in the forward development of society and thereby reduced the relations of production to a component part of the forces of production. Yaroshenko virtually abolished the political economy of socialism by ignoring central questions such as the continuing existence of various property forms, of commodity circulation and value categories in general. The science of political economy was sought to be transformed into a classless rational organization of the productive forces reminiscent of Bogdanov. In contrast with this marked economism, Stalin reiterated that contradictions persisted in the U.S.S.R. between the relations of production and the forces of production. If the directing bodies implemented incorrect policies then conflict was bound to emerge and in such conditions the productive relations would retard the development of the forces of production. The views of Yaroshenko recall the attempt of Bukharin to turn a blind eye to the eruption of class conflicts in the countryside and his desire to freeze the then existing capitalist production relations in agriculture and turn attention to 'technical revolution'. Bukharin openly stated in the 1930s that the `revolution of the proletariat in our country enters its own new phase: the phase of technical revolution' (Bukharin, N.I., 'Metodologiya i Planirovanie Nauki i Tekhniki', Izbrannie Trudy, Moscow, 1989, p.135). Such views also became prevalent in the arid years after 1953. Socialism no longer meant, as it did for Lenin and Stalin, the abolition of classes and the advance to communism, but the preservation of the collective farm form of property, the development of the ideology of classless 'scientific-technical advance', and the generalized introduction of commodity-money relations. The views of Yaroshenko were entirely compatible with the establishment of market relations after 1953. The Soviet leadership was unconcerned with the retention or extension of the socialist relations of production and proved incapable of maintaining the continuously high level of development of the productive forces which were characteristic of the Stalin epoch. The experience of the economic policies followed after 1953 demonstrates the correctness of the understanding that the implementation of incorrect policies would lead to a situation where the relations of production would act as a brake on the productive forces. Yaroshenko would seem not to be unaware of the implications of his views. Writing in 1992 he did not care to take up the issues posed for Marxist political economy by the destruction of the U.S.S.R. He continued to stress the primacy of cognition of the laws of development of the productive forces above all social questions and reiterated his opinion of 1951 that the central task of the discussion on the Textbook of Political Economy of that year should have been to address the question of the rational, organizational functioning of the socialist economy. What was novel was that he took up the issue of productive relations under socialism and argued that the scientific organization of the economy presupposed the perfection of socialist productive relations which in contemporary parlance he identified as 'social-organizational relations' and the 'economic mechanism' (Yaroshenko,L.D., 'Svidetel'stva Vremeni' in Igor' Troyanovskii (ed), I. Stalin, 'Ekonomicheskie Problemy Sotsializma v SSSR', Peredelkino, 1992, pp.100-104.). By this logic Yaroshenko openly advocated the political economy of the period of Perestroika.

The question of the continued existence of the social contradiction between the relations of production and the forces of production had wider ramifications. In 'The German Ideology' Marx held that the contradiction between the productive forces and productive relations lay at the root of class collisions. Stalin's critique of Yaroshenko clearly establishes that in his last theoretical contribution he continued to recognise that contradictions and class struggle continued to exist in socialist society. As seen the criticism of Yaroshenko clearly stated that if incorrect policies were carried out then conflict would emerge that would retard the forces of production. At the same time Stalin considered that under conditions of socialism that matters did not usually come to such a pass that conflict would occur as it was possible for society to take timely steps to bring the lagging relations of production into conformity with the character of the productive forces. This was possible because socialist society did not contain obsolescent classes that might organise resistance. It did, however, contain backward and inert forces that did not realise the necessity of changing the productive relations. Stalin considered that it would be possible to overcome such views without bringing matters to a conflict. This understanding was consistent with that of Lenin who had argued that under socialism contradiction continued but that antagonism no longer existed.

The discussion on the persistence of social contradictions in Soviet Society had clear implications for Soviet philosophy. Yudin pointed out that many philosophers including himself by arguing that there existed full correspondence between the relations of production and the productive forces in Soviet society, denied the existence of contradiction between the two. The philosopher Glezerman in his brochure 'Full Correspondence of Productive Relations and Productive Forces in Socialist Society' of 1951 had come unabashedly to this conclusion and did not care even to analyze the economic relations, productive forces or productive relations of Soviet society. Yudin concluded that the negation of the existence of any contradiction had led Soviet philosophy to the construction of lifeless and metaphysical schemes (Yudin,P.F., "Trud I.V. Stalina 'Ekonomicheskie Problemy Sotsialisma v SSSR'- Osnova Dalneishego Razvitiya Obshestvennikh Nauk", Moscow, 1953, pp.23-24.).

Lenin in May, 1921 had emphasised that the product of the socialist factories was 'not a commodity in the politico-economic sense' and that it was already 'a commodity ceasing to be a commodity' (Lenin,V.I., 'Polnoe Sobranie Sochinenya', Volume 43, 5th edition, Moscow, 1963, p.276.) Yet we find in 'Economic Problems' that the Soviet economist A.I. Notkin expressed the view that the implements of production manufactured by the social sector were in fact commodities. Stalin rejected this understanding and stated that the implements of production were allocated to the enterprises and not sold, that the State retained ownership of the implements of production and that these were utilized by the administration of the enterprises as representatives of the State in accordance with the State plans. In 1948 a concerted attempt had been made by the Chairman of Gosplan, N.A. Voznesensky, which had materialised in the reform of wholesale prices in January 1949 designed to end the system of state subsidies in heavy industry and transport. Voznesensky sought to introduce a minimal principle of profitability, some 3-5% of cost of production, into the branches of production including heavy industry and railway transport, thereby laying the basis for the conversion of the means of production into commodities (Trifonov, D.K., et al, 'Istoriya Politicheskoi Economii Sotsializma, Ocherki', Leningrad, 1972, p.201.). This attempt to bring the law of value into operation in the basic means of production was swiftly ended. Voznesensky was removed from his position on the initiative of Stalin on March 5th, 1949.

In 'Economic Problems' Stalin asserted that the sphere of commodity production in the Soviet Union was limited and restricted: no bourgeoisie was in existence there being only associated socialist producers in the State, the cooperatives and the collective farms. Commodity production was limited to items of personal consumption. For this reason Stalin denied that commodity production in the Soviet Union could give rise to the economic categories of capitalist commodity production such as: 'labour power as a commodity, surplus value, capital, capitalist profit, the average rate of profit'. (Stalin,J., 'Economic Problems of Socialism in the USSR', Moscow, 1952, p.21). Such notions were prevalent amongst a section of Soviet economists as is clear from Yudin's critique of the anti-Marxist errors in the social sciences. Merzenev and Mikolenko upheld the opinion that labour power was a commodity in the Soviet Union just as in capitalist society. A. Yakovlev argued that the category of 'capital' was applicable to Soviet conditions. The noted economist Atlas expressed the view that the average rate of profit operated in Soviet economy (Yudin, op. cit. p.23.).

A fundamental transformation of economic policy took place in the period between the death of Stalin and the 20th Congress of the C.P.S.U. The planning perspectives of laying the foundations of a communist society were abandoned and replaced by a consumerist welfare programme. Stalin's proposal, approved by the 19th Congress of the C.P.S.U., to gradually introduce products-exchange between town and country in place of commodity circulation was effectively ended from May 1953 and a programme for extending commodity circulation was adopted under the slogan of expanding 'Soviet trade'. The sphere of Gosplan in the Soviet economy was progressively restricted with the expansion of the economic rights of the All-Union Soviet Ministries in April 1953 and by the extension of the powers of the Directors of Enterprises and the Ministries of the Union Republics in 1955. The system of centralized directive planning as law inherited from the Stalin period was ended from 1955 and replaced by a new system of 'coordinative planning' by Gosplan and the All-Union and Union Republic Ministries.

The two years after the 20th Congress of the C.P.S.U. witnessed further radical changes in the running of the Soviet economy. Under Resolution Number 555 of the Council of Ministers of the U.S.S.R. dated 22nd May, 1957 the system of allocation of the products of the State sector was brought to an end and a multitude of centralized sales organizations was created under Gosplan to sell industrial products manufactured by Soviet industry. The elimination of Molotov, Kaganovich and Saburov from the leadership of the C.P.S.U. had an immediate impact on economic policy. The transformation of the means of production into commodities was clearly accomplished by Resolution Number 1150 of the Council of Ministers of the U.S.S.R. on September 22nd,1957, by which enterprises was expected to operate on the basis of profitability.

The Third Edition of the 'Political Economy Textbook' which appeared in 1958 accurately reflected the new economic system by stating that the means of production circulated within the State sector as commodities (Ostrovityanov, K.V., et al, 'Politicheskaya Ekonomiya, Uchebnik', 3rd edition, Moscow, 1958, p.505.).

In his reply to the letters of A.V. Sanina and V.G. Venzher, Stalin had opposed the view that the Machine Tractor Stations, which owned the basic implements of production in agriculture, should be sold to the collective farms as, inter alia, a gigantic quantity of instruments of production would come within the orbit of commodity production. Sanina and Venzher were not isolated economists when they expressed their opinion. A year earlier A. Paltsev in his brochure 'On the Paths of Transition from Socialism' [Kiev, 1950] suggested that with the growth of agricultural techniques in the MTS and with the merger of the smaller collective farms that there might be established MTS departments under the collective farms which would be closely linked with the work of a given collective farm (Yudin, op. cit., p.31-32.). By this measure Paltsev suggested in effect that the property of the whole people, state property, should be subordinated to the group property of the collective farms. The preliminary condition for dissolving the MTS was that the system of allocating the principal instruments of production in agriculture be terminated. Under Prikaz Number 663 of Gosplan in July, 1957, Gosplan ended the system of allocation of agricultural machinery inherited from the Stalin epoch and created under its jurisdiction an organisation, Glavavtotraktorsbita, with the function of selling the machinery required in the agricultural sector. In 1958 while formally demarcating himself from the earlier proposal advanced by Venzher, Khrushchev implemented the policy of dissolving the MTS and selling the implements of production in agriculture to the collective farms. As a result the means of production in agriculture as well as in industry now circulated as commodities. The Soviet publicist Vinnichenko who was close to Venzher and Khrushchev projected the view that 'distrust' of the peasantry was at the root of Stalin's opposition to the collective farms owning the basic implements of production in agriculture. This was not so. Stalin was merely upholding the Marxist position of Engels, who in a letter to Bebel in January, 1886, unequivocally stated that the means of production in agriculture had to be owned by society as a whole so that the special interests of the co-operative farmers did not prevail over the general interests of the whole of society (Engels to A.Bebel in Berlin, 20-23 January 1889, in K. Marks and F. Engels, 'Sobranie Sochneniya', Volume 36, Moscow, 1964, p.361.). Both Engels and Stalin, moreover, were of the view that the rich peasants would not be members of the collective farms. It is understandable that in those people's democracies where the kulaks (and even sections of the landlords) were members of the agricultural producers' cooperatives and where the principal implements of production in agriculture were owned by these cooperatives, Stalin's critique of Sanina and Venzher would receive an icy reception.

Augmenting the writings of Yudin was the article by Suslov published in 'Izvestiya' on 25th December 1952 which touched on the implications of the views of N.A.Voznesensky as expressed in the brochure 'War Economy of the USSR During the Patriotic War' which had been published in 1947. The main gravamen of the charge against Voznesensky was that he had made a fetish of the law of value which was made to appear as though it regulated the distribution of labour in the different branches of the Soviet economy.

It is quite clear that this was so for we find the following passage in the work: 'The law of value operates not only in the distribution of products, but also in the distribution of labour itself among the various branches of the Soviet Union's national economy. In this sphere the state plan makes use of the law of value to ensure the proper apportioning of the social labour among the various branches of the economy in the interests of socialism' (Voznesensky, N., 'War Economy of the USSR in the Period of the Patriotic War', Moscow, 1948, p.118.).

What is at stake here? So far as the operation of the law of value in Soviet society was concerned much indeed hinged on this from the vantage point of Marxist economic theory. Marx and Engels considered that the law of value was operative only in societies where commodity production was present. Value came into operation with the rise of commodity production and ended its activity with the end of the commodity system (Engels, Letter to Karl Kautsky in Zurich, in K. Marx, 'On Value', Belfast, 1971, p. 5.). From the argument that value regulated the allocation of labour in the economy the only logical conclusion which emerged was that a system of generalised commodity production, i.e. capitalism, was prevalent in the Soviet Union. Voznesensky, then, raised fundamental issues on the very nature of a socialist society.

For Marx and Engels the law of value operated in a society in which commodity production was in existence: 'The concept of value is the most general and therefore the most comprehensive expression of the economic conditions of commodity production' (Engels,F., 'Anti-Duhring', Moscow, 1978, p.376). A society of commodity production is composed of `private producers' where commodities are `produced and exchanged against each other by these private producers for their private account (Ibid., p.240.). Logically, in a society where commodity production has been finished `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. Anarchy in social production is replaced by systematic, definite organisation' (Ibid., p.343.), then the law of value is redundant. This is also the implication of the argument advanced in Marx's letter to Kugelmann of July, 1868, where he argued:

'That this necessity of distributing social labour in definite proportions cannot be done away with by the particular form of social production, but can only change the form it assumes, is self-evident. No natural laws can be done away with. What can change, in changing historical circumstances, is the form in which these laws operate. And the form in which this proportional division of labour operates,in a state of society where the interconnection of social labour is manifested in the private exchange of the private products of labour, is precisely the exchange value of the products' (Marx,K., 'Letters to Dr. Kugelmann', London, n.d., pp.73-74.)

For in a society where the interconnection of social labour takes place in the absence of a system of commodities i.e. without private producers, then the allocation of social labour would take place without the operation of value. This is confirmed by Engels where he argues that under socialism:

"It is true that even then it will still be necessary for society to know how much labour each article of consumption requires for its production. It will have to arrange its plan of production in accordance with its means of production, which include, in particular, its labour-power. The useful effects of the various articles of consumption, compared with one another and with two quantities of labour required for their production will in the end determine the plan. People will be able to manage everything very simply, without the intervention of much-vaunted 'value' " (Engels,F., Ibid., p.375.).

This is further corroborated by Marx in his last sustained piece of writing on political economy, 'Comments on Adolph Wagner's Lehrbuch der politischen Okonomie' in 1879-80, where he rejected the idea attributed to him by Wagner that value would operate in a socialist society. Marx criticized Wagner's 'premiss that in the "marxist social state" his (Marx's) theory of value developed for bourgeois society will determine value' (Marx,K., 'On Value', p.28.).

Marx and Engels clearly excluded the operation of the law of value in a socialist society. Nevertheless, they accepted that in a transitional socialist society value would be retained where the small peasantry continued to exist as a class. Engels spoke of such a condition in 1884 in his article on the 'Peasant Question in France and Germany':

'When we are in possession of state power we shall not even think of forcibly expropriating the small peasants (regardless of whether with or without compensation),as we shall have to do in the case of the big landowners. Our task relative to the small peasant consists, in the first place, in effecting a transition of his private enterprise and private possession to cooperative ones, not forcibly but by dint of example and the proffer of social assistance for this purpose'.

In the U.S.S.R. even after collectivisation and the establishment of group property, private production in a restricted form continued to exist. While Gosplan could abrogate the operation of the law of value in the sphere of state industry, the state farms, and the MTS by regulating the allocation of social labour through a definite plan, that was not in the bounds of possibility in the collective farms, where even though the sown area, yield, the extent of tractor-work, the number of socially owned cattle, the gross production of agriculture, the volume of compulsory payments and the payments in kind to the MTS came under the scope of directive planning, the state could not plan the use of the surplus commodity production or the use of labour-power of definite periods on definite tasks (Smolin,N., 'O zachatkakh produkto-obmena', Voprosi Ekonomiki, No.1, 1953, pp.33-45.).

Voznesensky did not maintain the stand of Marxism for he held that the law of value operated in the distribution of labour among the various branches of the Soviet economy i.e. in the industrial as well as in the agricultural sectors. In propagating this view, Voznesensky stood apart from the general consensus of Soviet economists. In the editorial article of 1943 'Some Problems of Teaching Political Economy' it had been argued that 'the assignments of funds, and labour power to individual branches of production is effected in a planned way, according to the basic tasks of socialist construction' (Pod Znamenem Markzisma,No.7-8, 1943.). Similarly, in the following year the doyen of Soviet political economy, K.V.Ostrovityanov, argued that in a socialist economy 'the distribution of labour and the means of production among the various branches of the national economy takes place not on the basis of a fortuitous movement of prices and the pursuit of profits, but on the basis of planned leadership making use of the law of value' (Ostrovityanov,K.V., 'Ob osnovnikh zakonomernostyakh razvitiya sotsialisticheskogo khozaistva', Bol'shevik, No.23-24, 1944, pp.50-59.). Value did not 'direct the distribution of social labour' then but it played 'the role of an auxiliary tool of the planned distribution of labour and means of production among the branches of Soviet economy'.

Value did not govern the development of the production of the means of production for without its being restricted the allocation of the necessary funds for this sector could not be found. Yet Voznesensky in his discussion on establishing the appropriate proportions between production of the means of production and production of consumer goods for the purposes of reproduction on an extending scale argues in such a manner as to dispense with indicating the primacy of production of the means of production (Department 1) in relation to production of the means of consumption (Department 11) which was necessary for ensuring the continuous expansion of the national economy, relegating the matter to the section of the work relating to the post-war economy:

'If we divide Socialist production in the USSR into Department 1, producing means of production, and Department 11,producing articles of consumption, the value of the means of production set aside by the Soviet state for enterprises in Department 11 must obviously in a measure defined by plan correspond to the value of the articles of consumption set aside for enterprises of Department 1. Indeed, if enterprises of Department 1 were to be deprived of articles of consumption and enterprises of Department 11, of the means of production, Socialist reproduction on an extended scale would be impossible, in as much as the workers of enterprises producing means of production would be deprived of articles of consumption, while enterprises producing articles of consumption would be deprived of the means of production, i.e. fuel, raw materials and equipment' (Voznesensky, N., loc. cit.).

In contrast Ostrovityanov had recognised that value functioned only at an auxiliary level in planning the distribution of the means of production (Ostrovityanov,K.V., op. cit.). More emphatically, the author of the 1943 editorial had argued, giving the instance of the Kirov plant at Makeyevka, and the Magnitogorsk and Kuznetsk combines, that value did not govern the development of the Soviet metallurgical industry, which had operated for many years from funds from the state budgets without yielding a profit (Pod Znamenem Marksizma, op. cit.).

Suslov's critique of Voznesensky's booklet hit the mark. But Voznesensky was not just a theoretician for as Chairman of Gosplan under the Council of Ministers of the Soviet Union he was in a position to implement a policy of extending the sphere of operation of commodity-money relations in the Soviet Union in 1948-49. The examination of the Leningrad case conducted under Gorbachev revealed that M.Z. Pomaznev who was the Deputy Chairman of the U.S.S.R. State Supply Committee had complained that Gosplan under Voznesensky had reduced the national industrial plan for the first quarter of 1949. Later Shkiryatov of the Party Control Commission reiterated the charge and the U.S.S.R. Council of Ministers noted the failure of Voznesensky to defend the planning directives of the government (Izvestiya Ts.K. KPSS No 2, 1989.). The charge of reduction of the industrial plan is entirely consistent with the raising of wholesale prices for the goods of heavy industry in January 1949 and the attempt to introduce the operation of profitability into the production of means of production and bring them into the sphere of commodity-money relations. The removal of Voznesensky from Gosplan on March 5th 1949 saw the beginning of the nullification of his economic policies by several stages so that wholesale prices were ultimately reduced to 30 percent below the 1949 level. Voznesensky became a hero of those who wished to remodel the Soviet economy on the lines of a market economy: he was rehabilitated soon after the death of Stalin.

Suslov's article of 1952 took up one other question related to value. He criticised the long prevalent understanding among Soviet economists that under socialism value was 'transformed' or 'altered' in such a way so as to serve socialism. Stalin in 'Economic Problems' had rejected the view that under conditions of the socialist planned economy that this occurred for if value could be 'transformed' then economic laws could be abolished and replaced by other laws. The sphere of action of an economic law could be restricted but it could not be 'transformed' or 'abolished' (Stalin, J., op. cit. p.97.). The subjectivist notion of the 'transformation' of value categories under socialism permeated Soviet political economy. Voznesensky gave an illustration of this trend when he argued:

'The commodity in the Socialist society is free of the conflict between its value and use value so characteristic of commodity-capitalist society where it springs from private ownership of the means of production' (N. Voznesensky, 'War Economy', p.97). Was it possible that under socialism that the commodity could be emancipated from the conflict between use-value and exchange-value? In the U.S.S.R. value persisted because of the existence of two different types of property. If group property embodied mainly in the form of the collective farms, were elevated to the level of state property, then the basis for the operation of the remnants of value would cease to exist. But it was the commodity per se which Marx considered as the primary 'cell' or 'embryo' of capitalism. It could not be 'changed' or`transformed', only its scope could be limited and restricted.

Stalin's understanding on this question corresponded to the Marxist position of Engels who wrote to Kautsky in September 1884 in the following terms when the latter was drafting an article on the economic theories of the German Katheder socialist economist, Rodbertus:

'You do a similar thing (i.e. as Rodbertus) with value. Present value is that of commodity production but with abolition of commodity production value 'alters' itself also, that is, value in itself remains but in a changed form. But in fact economic value is one of the categories belonging to commodity production and vanishes with it (See Duhring, p.252-62), as it did not exist before it. The relationship between work and the product does not express itself in the form of value before commodity production, nor will it do so after it' (Engels,F., Letter to Karl Kautsky in Zurich, in K. Marx 'On Value', pp. 5-6.).

For Engels a 'changed' value represented the oblique smuggling in of the operation of the law of value which was impermissible in a socialist society. In the writings of Kautsky this represented an isolated blunder, but Stalin faced a situation where virtually the whole of the economists in the U.S.S.R. endorsed this error.

The notion of 'transformed' value seems to have arisen as an expression of the dual need to criticise the idea that value could be arbitrarily terminated in the Soviet Union when the existence of the collective farms necessitated the continued preservation of commodity-money relations, and conjointly, to articulate the reality that under conditions of the socialist planned economy the operation of value had an auxiliary, subordinate and restricted role. Nevertheless the conception of 'altered' value had in the Marxian sense a clear ideological content which was the reason why Stalin considered that the formula despite being current in the Soviet Union for a long time had to be abandoned for the sake of accuracy. The notion of 'transformed' value bore a twin problem as it still carried with it the idea that value could be arbitrarily created or abolished, and because it could easily become a theoretical lever for justifying the extension, rather than the contraction, of the sphere of operation of commodity-money relations as had clearly occurred in the instance of Voznesensky.

With the rapid expansion of commodity-money relations in the Soviet economy after 1953 it was, perhaps, inevitable that the 'transformed' commodity would make a comeback. The 'Textbook of Political Economy' of 1954 argued that the socialist economy did not know the contradiction between private and social labour' (Ostrovityanov,K.V., et al, 'Politicheskaya Ekonomiya, Uchebnik', First edition, Moscow, 1954, p.442). Such a ratiocination posed many problems. It suggested that in a society which still required to use commodity production in a restricted fashion that social labour could be said to exist in a full form despite the fact the working class still received payment in the wage form with which it purchased consumer goods. It tended to imply, moreover, that the contradiction between concrete labour and abstract labour, which in the understanding of Marx could only be ended in communist society had already been resolved. It would also appear that private labour did not require to be terminated by bringing the labour power of the collective farm peasantry, which was not fully in the sphere of socialist planning for definite periods on definite tasks and which still preserved some of the features of private labour as the relationship of work and product was fully expressed in the value form, to the level of the social labour of the working class at that historical stage, controlling the property of the whole people. The 1954 edition of the 'Textbook of Political Economy' brought Soviet political economy back to the contradiction-free commodity of Voznesensky and it rejected the position of Stalin in 'Economic Problems' that the social contradiction between the relations of production and the forces of production continued to operate in Soviet society.

In the years after 1953 the C.P.S.U. no longer considered itself as the vanguard party of the working class in the Leninist tradition but as a party of the whole people. The state of the dictatorship of the proletariat, which Marx considered as continuing until the establishment of communism, was replaced by the state of the whole people. Before the economic reforms of 1953-58 it was possible to argue as it was done by Stalin that commodity production in the Soviet Union was of a special type:

'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' (Stalin,J., op. cit., pp. 20-21.).

But after the market reforms of 1953-58 when the means of production began to circulate as commodities the situation qualitatively changed. The commodity forms of production which existed under socialism were of special type as Stalin pointed out. After the reforms the restrictions placed on commodity production were removed and commodity forms began to embody the economic relations of another type. Marx in 'Capital' had established that the commodity, the basic cell of capitalism, contained within itself the embryo of both wage-labour and capital. The logic of rapidly expanding commodity production meant that the economic categories, such as labour-power, surplus value, capitalist profit and the average rate of profit, would appear once again. It is in this context that the programme for the establishment of Communist society put forward by Khrushchev in 1961 has to be evaluated. In place of the contraction of the sphere of operation of commodity production and commodity circulation in the advance to communism the C.P.S.U. envisaged their further utilization. The programme withdrew from the task of the abolition of classes under socialism and refrained from restructuring the relations of production of Soviet society. The perspective put forward by Stalin of raising the group property of the collective farms to the level of the property of the entire people was ended. In place of this the notion of a future merger between collective farm property and the state property was adopted under Khrushchev.

Paper presented at the International Seminar "Stalin Today" held at the Moscow State University on 5th and 6th November, 1994.

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