Notes on Economic Questions

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The Law of Socialist Accumulation, the Planning Principle, the Rate of Industrialization, and — Lack of Principles

1. The analysis of our economy from the point of view of the interaction (both conflicting and harmonizing) between the law of value and the law of socialist accumulation is in principle an extremely fruitful approach — more accurately, the only correct one. Such analysis must begin within the framework of the closed-in Soviet economy. But now there is a growing danger that this methodological approach will be turned into a finished economic perspective envisaging the “development of socialism in one country," There is reason to expect, and fear, that the supporters of this philosophy, who have based themselves up to now on a wrongly understood quotation from Lenin, will try to adapt Preobrazhensky’s analysis by turning a methodological approach into a generalization for a quasi-autonomous process. It is essential, at all costs, to head off this kind of plagiarism and falsification. The interaction between the law of value and the law of socialist accumulation must be placed in the context of the world economy. Then it will become clear that the law of value that operates within the limited framework of the NEP is complemented by the growing external pressure from the law of value that dominates the world market and is becoming ever more powerful.

2. In this connection the question of our rate of economic development takes on decisive importance, and above all, our rate of industrialization. The monopoly of foreign trade is a powerful factor in the service of socialist accumulation — powerful but not all-powerful. The monopoly of foreign trade can only moderate and regulate the external pressure of the law of value to the extent that the value of Soviet products, from year to year, comes closer to the value of the products on the world market. In calculating the value of Soviet products one should of course take into account the overhead expenses of social legislation. But in the context of the world competition between economic systems, the requirement mentioned above remains in full force — that is, the rate of Soviet industrialization must be such as to assure that Soviet products approximate those on the world market in a way perceptible to our workers and peasants.

3. The Fourteenth Congress resolution asserts that the limits of industrialization are the purchasing power of the market and the currently available financial resources of the state. These limits are not the only ones or the main ones; they only serve as empirical expressions, in market and money terms, of other limits. Within this larger framework, the lag of industry behind the development of our economy as a whole finds its expression in the goods famine and the wholesale-retail price scissors. In reply to these assertions, Gusev and others raise two objections, which have no connection but, in fact, contradict one another; moreover, both are indefensible to an equal degree. These objections are (a) that those who demand an end to industry’s lagging behind and who urge that it take a leading role are “super-industrializers,” and (b) that those who place limits on the extent to which industry can develop in terms of the market are allegedly afraid of the peasantry and have forgotten that production of the means of production cannot be geared to the level of the market.

4. Thus, people who, on questions involving the renewal of fixed capital, have now run into the problem of socialist accumulation and the planning principle counterpose these discoveries of theirs to the industrializes, who, for this special purpose, are transformed from “super-industrializes” into “agrarians” who capitulate to the peasant market.

5. This in no way prevents these newcomers to the question of socialist accumulation from remaining on their old ground on the question of planning, i.e., an essentially market-oriented position. In recent years planning has consisted primarily, if not exclusively, in the regulation of the way the elements of the economy are combined on the basis of the market and within the framework of the current year. The question of the complex, constructive tasks of planning has now become absolutely unavoidable in relation to the need to renew and expand fixed capital. In this area, the socialist approach to the question ought now to find its most clear-cut expression. But the amendments answering to this need were rejected.

6. The question of the interaction between the Soviet and world economies is becoming more and more crucially important from every point of view. This was indicated above in regard to the laws of accumulation and value, as well as to economic growth rates. Of no less importance to the question of the so-called economic independence of the Soviet Union is foreign trade. This question needs to be discussed from every angle, and, as far as possible, on the basis of an analysis of the main elements of our import and export trade. Approximate projections for the next five years need to be worked out along these lines. The dialectic by which the growth of economic ties and interdependence paves the way for industrial “independence” needs to be demonstrated.

7. The question of the distribution and redistribution of agricultural and industrial, private and state accumulation must be linked with the refutation of the legend that the village is treated like a “colony.”

8. At the plenum the question of the connection between the economy and the party regime was left completely untouched. However, the importance of this tie is immeasurable.

The question of economizing was posed sharply enough at the congress and in the congress resolution. But what was not dealt with at all was the question of why, since the time of the Twelfth Congress, when the question of economizing was posed as sharply as possible (payments exacted from economic enterprises by local party, soviet, and trade union organizations, senseless advertisements, etc.), the necessary success has not been achieved. It is quite obvious that success is impossible without the active participation and supervision of public opinion in the country, above all that of the party.

The selection of personnel for economic work should be dictated by considerations of the job to be done. Managers and directors must feel the eye of public opinion, of the workers, the party, etc., upon them.

It is characteristic of the bureaucratic regime that managers feel they are responsible only to the apparatus, above all to the party secretaries. This kind of situation is equally harmful from the point of view of the proper selection of managers and from that of the establishment of proper economic functioning, especially of the strictest economizing.