THE BASIC ECONOMIC LAWS OF MODERN CAPITALISM AND OF SOCIALISM
J. V. STALIN
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.
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