MSZ (July/Aug 1985)
The Soviet Union: Socialism as a World Power
As long as socialism presents itself as being decent and bourgeois, as long as it appears to embody the idea of fair and harmonious coexistence, the modern democratic world accepts it to a certain extent. As the ideal of competition and violence whose motto is the third basic bourgeois value, “solidarity,” it has even acquired the standing of an intellectual tradition, which may be quoted by bourgeois politicians fighting for political power as readily as the Christian faith may. The ideal of a better world in which all the hardships of capitalism which a moral mind perceives have been abolished, are a firm part of the repertoire of bourgeois politics, which never fails to promise improvement and progress in its various programs.
But as soon as socialism puts objections into practice which dare to go against the program of democratic politics, thereby challenging its means and ideals as well, its ideas are suddenly not worth so much any more. Popular opinion does not merely rely on the weighty insight that it is utopian and, furthermore, dangerous to go about realizing ideals since one must always remain “realistic.” As soon as it becomes noticeable that some people are refusing to participate in the well-defined tasks and problems of politics in an organized fashion, this is a case to be taken care of by the Office for the Protection of the Constitution.
When socialism actually enters the political stage with the insignia and complete equipment of a state power – no matter what ideals it cites – the party's over. When power is wielded in the name of socialism and a whole bloc of states is governed according to different principles than those which guarantee business in the Western homes of freedom, one is faced with an outrage on humanity. Democrats in office are absolutely certain that “the Soviet Union, the Soviet regime, is the real scandal of our time” (a West German cabinet minister). It is therefore a case for military armament, which cannot be gigantic enough in view of how serious the offense is.
This hostility, in all its relentlessness, has nothing to do with a judgment of whether the advocates of this deviant sort of politics are right or wrong, as far as their objections to the world of capitalism and democracy are concerned. And as for the question as to whether a Communist party sets about doing its job the right way or the wrong way, a partisan of freedom and equality can very freely forget about it altogether. His political love of his native land provides him, after all, with arguments which tell of nothing but fundamental deficiencies of socialist politics: it just doesn't work the way ours does!
Contributions to the “comparison of the systems,” for which people's enthusiasm for democracy and its value provides the unshakeable criterion, can be had cheaply and in abundance. Anyone who takes a positive view of democratic politics and its market economy on the grounds that all the sacrifices they produce are treated publicly as “problems” which are being “combated” by those in possession of money and power, can contribute a dull anecdote to NATO's valid image of the Enemy any time to illustrate how unacceptable it is when
- a state wields power which is unthinkable over here and equivalent to “despotism” over there;
- there are no well-filled stores to invite the masses to compare prices, so often overstraining their purchasing power;
- sloppiness and tight control by turns make sure that no industrial reserve army is created, but instead an army which is much too large for the country's defense needs;
- the system is surprisingly stable – and dangerous as well – in spite of the excessive chess-playing and consumption of alcohol.
We are not about to contribute to the glutted market of such opinions. The mistakes which are mentioned in our criticisms of the existing socialism are at best reasons for a few million Russians to try to make some thorough changes in the way their place is run. They do not, at any rate, give NATO the right to free the breed of men held in such contempt by democrats and to prepare for its use in the fine capitalist fashion.
On the Political Economy of the Formerly Existing Socialism
The idea of setting up socialism came to the founders of the Eastern Bloc states due to their criticism of capitalism: the question of the extent to which this criticism coincides with that of Marx and of where it does not can be answered by studying each department. It is then equally apparent who is right, as far as the differences are concerned – but not from appointing the older critic the incontestable appeal to authority, but from examing the arguments.
Anyone who would like to save both parties as appeals to authority can consider their quite opposite findings on capital and wage labor, money and credit, the state, foreign trade, etc., compatible. He only needs to resort to a few mistaken ideas about the concepts “general,” “concrete,” “historical situation.” He then has a few instances which meet his need for tradition. Today, decades later, the leaders of the existing socialism still cite Marx and the others, and they still criticize capitalism. But now they like to do so by comparing it with their own system:
“For the first time in history the state has acquired the possibility of organizing and steering the development of the economy on the level of the entire society …”
“The bourgeois state can never rise to planning and directing production for society as a whole. Even in wartime, when state monopoly capitalism reaches its highest level, it is not possible to direct the overall production according to a plan because private interest, which is based on private property, i.e. the interest in profit, remains the supreme law.”
This comparison not only attributes to capitalism a deficiency which its state obviously does not consider one at all. After all, it uses its power to make sure that private property remains the “supreme law.” And political rule “lives” so well as the guarantor of the free market economy and from its success that it praises its system to the skies and tries to tear down all barriers abroad for its system. However, the possibility of “organizing and directing” becomes an advantage when the relationship between “the economy” and the state, as is customary in capitalism, is taken to be a restriction on political power, no matter how relentlessly this power enforces the standards of capital. Strangely enough, socialists, who must have noticed that these “powerless” instances can only be removed from office by struggle, are perfectly at home with bourgeois abstractions which can’t be beat. They do not just praise socialism on the fine grounds that the state has more to say in its society than the bourgeois class state. The authority of the public power is to be sufficient with regard to “production,” the “economy,” and therefore be a blessing! In view of such compliments, even people who are reticent about referring to the classics cannot go without citing Marx. For he was interested in overcoming a system of production based on the exploitation of a class of people which is guaranteed and taken care of by a state which matches it! And he did not imagine that this system could be overcome by granting the state more competence for “developing the economy.” By contrast, when today's adherents of the existing socialism settle their comparison of the systems they “justify” the abolition of private property in a very peculiar way:“(It is) not only historically necessary from the point of view of the development of the productive resources; it is also legal.”
It is of very little interest whether this good reason for the socialist revolution is actually confirmed by document; it suffices to interpret capitalism as being a great conflict between the system of production and the productive resources, and to treat crises, stagnation and decay as its intolerable drawbacks. In this way capital, which develops the productive resources without consideration of workers and nature, is accused of nothing less than failing to take care of and increase the productive resources – and it is in this area that socialism is certified to be fundamentally superior. This is due to the fact that in socialism the state can finally comply with its calling without obstruction: It determines the production and distribution of wealth, and in order to increase this wealth it uses all the levers at its disposal.
The new node of production which it thereby establishes borrows the names of its levers from capitalism. But the levers themselves are economic categories of a “new type.”
Planning with Levers
1. The Socialist Commodity
As in all other societies as well, wealth presents itself in the existing socialism in the form of use values. It consists of products of labor which satisfy the needs of consumption or production depending on their properties. That this simple and pleasing state of affairs is not the whole story is revealed by the price which things also have. The socialist state, which directs the production and distribution of wealth, determines the prices of commodities. In this way it dictates relations of exchange between the various types of commodities which it considers useful and fair.
a) This state becomes active in the field of justice because it wants to be “the agent directing the economy” in order to give the working class the rights it is deprived of when it is a means for capital. The socialist state is not willing to allow those who produce wealth to go without the necessities of life because of a market which is determined by the possession of money and the efficient price setting of those who have something to sell. This state is an enemy of the private power of money, which characterizes the world of private property. It advocates guaranteed subsistence for the working population, whose wages it decides on just as it decides on how affordable the articles of use are which they need.
b) In view of this practice, it is strange that the state considers it useful at all to give a price form to the results of the production organized under its rule. The state directors set a market going in order to plan it. They are aware of the restriction a price places on people's freedom to make use of use values; they are acquainted with the conflict of interests which inevitably exists between buyers and sellers – the need for use values conflicts with the need to accumulate a maximum of money, the equivalent for every kind of wealth! – and they still choose to make use values subordinate to their exchange values. However, they add the condition that the exchange of a commodity for money must correspond to the distribution results desired by the state. Insofar as the socialist state sets up a market without competition – no one is allowed to change the prices as his own economic means – at the same time subjecting everything to the criterion of money which it establishes, it monopolizes the power of money.
c) This method, which announces the economic program of a useful kind of rule, declares money, the measure of abstract wealth, to be an excellent means for planning. Production and distribution of wealth, so as to benefit the people, are supposed to be planned by having the use of money function solely in accordance with state goals. This state uses its monopoly on force to acquire a peculiar economic monopoly when it defines desirable results of circulation in practice by its “planned price systems.” It thus measures the success of its “economy” in money in order to decide on the basis of sums of money on the balance sheet of the state budget how much wealth and labor the producers can expect to get. It reserves itself the right to go about increasing money, and it makes the people's participation in concrete wealth dependent upon its success. In order to enable itself to carry out its welfare state program, it dictates monetary services to its society.
d) The establishment of such a peculiar “commodity/money relationship,” which is then exploited as a lever, cannot be confused with capitalism. The trick the socialist politicians want to perform in their “command posts of the economy” does not consist in simply subordinating the use value to value, the production and distribution of concrete wealth to the purpose of accumulating money. They consider “accountancy,” which operates with units of abstract wealth, to be an excellent means for “stimulating” and “supervising” the production and distribution of real wealth. But they must be told one thing at this point: This roundabout form of command is not the same as planning production. It is a very different matter whether production serves the progress of the values defined by the state or whether it provides more concrete wealth.
e) Another truth can be found in the contradiction of a “planned market.” The workers' advocates are as reluctant to plan labor in accordance with the natural conditions and to the benefit of the producers (for this purpose technical knowledge is more important than the puzzle of how to “compare” workers, etc.) as they are intent on setting up “objective necessities” which no one can escape. They steer clear of a justified imperative of expedient production – but they enforce “laws of socialism.”
2. Socialist Profit
The socialist state has a criterion for the desirable effective use of material and machines in the factories. This criterion is not derived from the special character of the type of production involved, but from the decision to provide the state with the wealth required for all good deeds, and to do this in the form of sums of money, which furthermore increase. This criterion is called profit and, as an economic indicator, it constitutes the rule that a maximum surplus is to be achieved over the production costs. Since both the purchasing prices and the sales prices are “planned,” the practical question arises as to how this indicator can pass from its sad existence as a mere calculation to the status of being a matter of self-interest for the firm. The contradiction contained in the question is reflected in the “answers.” The lever which is supposed to bring about the progress in the production of wealth “stimulates” a whole array of bad habits, the results of which give the partisans of capitalist exploitation so much to be malicious about.
a) It is ridiculous to suspect that the planners and controllers oriented themselves by capitalism when they introduced their indicator. Businessmen make profit which increases their means, and all their activities in dealing with the “production factors” are aimed at this purpose, for which the market is the appropriate instrument. State-owned firms realize a surplus, which is expressed in money, only when the relationship between the state-decreed purchasing and sales prices allow for it. They are not free to use the techniques of competition vis-à-vis sellers and buyers; the money they earn is not available to them as materialized private power, but is the material for state decisions. Thus the managers of a firm initially do not have any motive for organizing their production in such a way that it will prove itself as a means for achieving business success to be realized on the market. And this is the reason why the optimization of the relationship between costs and the surplus appears to be a “stimulation of the firms” to use the productive resources efficiently, as dictated by the state. The term “main indicator of planning” is therefore no more appropriate.
b) The “initiative” which the state calls into being only comes about, for the reasons stated, when the state provides the firms not only with the indicator but also with advantages in case they comply with its wishes and produce successful balance sheets. The alternative, threatening to sanction them, is not available for reasons belonging to the principles of such a socialist economy. It is completely out of the question to discontinue production – production and its uncheckable progress are what it's all about. The “value” calculations are not the purpose of the whole business, after all, but the state instrument for developing the productive resources. And since the socialist state won't hear anything against the main productive resource, the worker, and considers “labor” to be the source of all wealth and holds it in great esteem, it considers the dismissal of workers a crime: they have a right to work.
c) The advantages for making the firms produce in a manner favorable to the state's balance sheet consist in the allotment of means out of the national budget. Rights and money which make it profitable for the collective to excel at making a profit are made available, partly for the managers of the firms, partly for the employees, partly for production. The standard form of this stimulation consists in modifications of the relationship between parts of the profit to be paid to the national budget and parts to remain with the firm. The latter have the desired effect via the wage funds of the firm and via the fund it can use to renew and expand production (“investment”). Alongside there is a premium system, which draws its criteria from the definition of a target and its fulfillment and over-fulfillment.
d) This means that there is an incentive to make a profit, but this does not by any means make the calculation of the socialist state work out right – not because the firms don't give a hoot about the incentive and prefer to lead an easy life, but because they take up the offer. The publicly much-discussed methods of making and increasing a profit are consistently applied: to produce more in the same time, save means of production! When choosing among different products, produce the cheapest one (to sell) and exercise restraint with the others; achieve “successes” on the basis of useful price relationships, thereby making the use of new means of production superfluous because they do not fit in with the obligation to be thrifty, although they would bring higher productivity and better products. And even where the means left in the firm's fund are used properly and rationally, the planners and directors notice a very peculiar kind of consequence: the “good” firms sometimes get better by using the lever provided – the bad ones always remain worse since they do not deserve any financial attention.
e) The “egoism of the firm,” which is called into being according to the plan, provides its originators with many a problem. They are penalized for having failed to plan social production; their love of the standard of money which was supposed to raise the productive resources to ever higher levels produces results which not even fanatical catcher-uppers and overtakers of capitalism can appreciate. This is why one hears explanations of the following kind:“Profit as an economic indicator does not reflect the overall efficiency of production. Under certain conditions – as experience has proven – the increase in the profitability of a firm may be accompanied by a reduction of production and by neglect of consumers' interests.”
However, such findings do not testify to insight so much as to the intention to carry on the same way and inaugurate an improvement in the “system of plan indicators.” The phenomena, which someone called “experience” is pointing to, have not come about under “certain” conditions but under those which the head political economists have presented to their firms. The lament is directed toward nothing but the purposefully “stimulated” separation between financial success and the material result of production. Useful products and productive labor must constitute a failure on the balance sheet under this imperative; conversely, substandard goods, produced by outdated production methods, may be proudly shown as profit. If someone fails to see any contradiction in the socialist decree that the firms are to save prime costs and investment but make all kinds of profit on “high quality products in the desired assortment,” he will never understand the problems with the “proportionality” of the various departments of his business. He thinks they are just there – even if he has pleaded ten times for the principle that firms should provide themselves with the means for expansion. Such advocates of the “law of value in socialism” have simply overlooked the fact that this principle does not merely fail to be respected in many cases; the state, with its holding back of investment means, determines in a planned manner what is considered not to be profitable. This is why there is always talk of “economic reforms” and new prices and indicator systems are ever being worked out by way of correction...
f) Due to the unmistakable “delay” in the “development of the productive resources” – these socialists still have their reasons for drawing a comparison with rotting capitalism – they have come up with an idea. It is very un-economic and is expressed as a mission which can basically be taken care of much better in socialism than elsewhere and must therefore be taken care of by all means. Its name is “scientific/technological revolution,” and this is ideology. It paraphrases a need of the socialist state which its firms do not fulfill in spite of all the indicators which are intended to “make the firms’ interests melt into a whole with the state's interests.” There is concern about “the technical level of the entire economy lagging behind,” which is fairly worrisome: “The progress of science and technology is the main lever for creating the material/ technical basis of communism.”
Thus, it can only be hoped that those involved will occasionally think of how much productive resources and production conditions can sometimes get in each other's way. They can then forget about their set phrases on the “process of struggle between the new and the old, between what is progressive and what is conservative.” This nonsense is not a lever for anyone or anything.
3. Socialist Wages
The working people are supposed to be beneficiaries of the planned market. This is why a wage fund was set up in the accounting system of the state and the firms. Its size determines how much the working people get out of life. And this is supposed to be more and more as the successes of the plan grow.
The condition for this is the success which the socialist state achieves with its accounting system. And since there are considerable problems in this area, there is an “opposition between accumulation and consumption” and the need for a very special kind of achievement: the working people are not only expected to work, they should do such a service to production that the lamented defects disappear. Thus, wages become a lever and “planning and directing” become a moral campaign.
a) The fact that wages appear as a cost factor in existing socialism and are thus to be kept low in relation to the means intended for the planned development ... is a bad joke. It comes from economic ideas of a pot out of which “accumulation” and “consumption” must be defrayed, so that the decision in favor of the former is made with a heavy heart according to plan and in the name of future pleasures. That productivity has to increase before the wages can increase is also a fine “law” which the planners can keep to, who invented it. No one ever demanded the reverse, by the way, and the phenomenon discussed in such a scholarly way by the political economists consists simply in the fact that more and more working people produce more and more wealth without noticeably getting any more out of life for it; furthermore, this wealth is not even suitable for making its administrators happy.
From the point of view of the working people, the joke becomes somewhat more serious. In view of the planned prices for the necessities of life, they do not experience how restricted they are in the same way as the wage workers do in the West. They do not suffer from a wallet which cannot meet the supply of goods, but have savings and the problem of how and when they can get anything decent. It is not too much use that the rents and food prices are low and that the few rags to wear are sold at reasonable prices as long as the stuff is hard to come by and no good. By the way, these remarks are not Western agitation pointing out that “private initiative” is what they need, but instead derive from debates which are conducted officially in the Eastern bloc, in the commissions, special journals and the newspapers.
b) In order to eliminate the “failures” caused systematically by the levers, and all relating to the separation between the arithmetic production result of the state and the material production result, the planners in charge quite soon get the idea of a kind of “individual initiative” they would like to spur on. This idea and its expert implementation in reams of special cases have bestowed upon the Russian working people a flourishing premium system and permanent socialist competition. The working people are constantly “stimulated” by their managers and through them to earn themselves a few extra rubles or rights by making specia1 efforts. Whoever fights the “planned” idling, the inevitable rejects, etc., by his own efforts, preferably with a brigade, can be sure of praise and some compensation. However, the fact that this has led to a generalized system of premiums, piece wages and special efforts in which threats compete with efforts to woo – alongside the “dawdling” which is still customary – does not guarantee the success aimed at by the state. In this field, the above-mentioned “egoism of the firm” can be combined very nicely with the deliberately induced opportunistic calculations of the working people. Decades of intense efforts to provide minute justification for a hierarchy of wages, “material incentives” standardized and renewed hundreds of times have not brought about the miracle those in charge were hoping for: the workers do not compensate all the systematic defects of the lever economy by their “responsible efforts” with the resulting small advantages. Not even the couple of exemplary activists, who then get into the newspaper, can achieve that.
c) The men and women of the Party drew telling conclusions from the fact that wages are not much good as a lever as long as people's modest existence, which is made possible precisely by state guarantees, is secure and, on the other hand, nothing much more is ever in sight. First of all, they always wanted to do the same thing much more resolutely and exactly than ever, which is why there are still “movements” of all kinds. There is one for “innovators,” who are not afraid to try out something new for a change and abandon the usual well-established routine. There are others with slogans like “involvement of the working people in the fight to reduce the production expenditures.” And there are also the special efforts on the jubilee.
Secondly, there have been those who advocate less wooing of people with incentives and more threats, including the threat of losing one's job. But the leaders of the most powerful workers’ and peasants’ state do not agree. Although they have nothing against sanctions for the sake of law and order when the peaceful socialist mores are disturbed by drunks, rowdies or even deviationists, they hang on to the achievement which distinguishes them from capitalism in a way obvious to anyone: the right to work, i.e. a guaranteed modest existence, is staying!
Thirdly, it occurs to them quite in keeping with the traditional teaching of the good worker that the moral immaturity which people occasionally show might possibly constitute what ails their progress. The path of public inculpation, of accusing the working people of lacking discipline – from the speech of the first man in the Kremlin all the way to the banner in the firm – this is the way the “productive resources” are being put to work at present. This is also certain evidence of the fact that the Soviet economy has nothing to do either with planning or with capitalism.