The published chapters of my work The New Economics* a book devoted to a theoretical analysis of the Soviet economy, have been subjected to bitter critique. Opponents have especially attacked the chapter on the law of socialist accumulation. The chapter "The Law of Value in Soviet Economy" at first met with a much milder reception during the three-day debate in the Communist Academy. A few opponents even paid their compliments to the author. But thereafter it did not take long before the new chapter was attacked just as harshly as the preceding one, in particular in an article by Comrade E. Gol'denberg that appeared in Bol'shevik last April 30.**I don't know, it may be that the tone he displayed in that article is a personal trait of Comrade Gol'denberg —former oppositionists often display above-average zeal; in any case, if all our other opponents will just be more objective, the matter cannot but profit. For my own part, I would like to maintain my composure and objectivity. Disagreements exist. What is the use of blowing them up, or of inventing new points of divergence that do not exist? Anyone who engages in this, whether in theory or in politics, permits himself this luxury only because he has not given enough thought to our future.
The value—or, on the other hand—the uselessness of a theoretical construction that we as Marxists and Leninists devise in the area of social science is determined, first of all, by the extent to which it is logically consistent with the methodological bases and fundamental propositions of Marxism and Leninism, and second, by the degree to which it helps us correctly to foresee socioeconomic developments and thereby serves the immediate practical goals of our class. This verification is crucial and decisive because both Marxism and Leninism are able to serve as a preliminary logical check of any new construction only because they themselves have already been verified by the experience of the practical struggle of the working class. When a dispute arises over whether a given construction is logically consistent with Marxism or Leninism, the debate can continue for as long as you please in the sphere of logic, but, once again, only practice settles that debate conclusively and irrevocably.
It is from this standpoint of a logical and, where possible, practical verification of my theory of Soviet economy that I now intend to examine the most important objections raised by Comrade Gol'denberg and several of my other opponents in respect to the most essential theses of my book. I then will attempt to demonstrate that my opponents have so far not only failed to offer but —as long as they maintain their present positions—never will be able to offer anything resembling a Marxist-Leninist theory of our economy, with all the practical consequences ensuing from such a theory.
I will begin with the question of method.
Comrade Gol'denberg faults me for taking a "vulgarly mechanistic approach to the question"; I am accused of failing to grasp the "dialectical nexus between contradictory and conflicting principles"; I have supposedly been engaging in a "scholastic, formalistic exercise in logical definitions"; and so on. Now, where is the proof?
First proof: As I begin the analysis of the manifestation of capitalist categories in our economy, I remind the reader of precisely what is counterposed to these categories in a planned socialist economy. Comrade Gol'denberg pretends not to understand the methodological importance of this contrast and its place in my entire exposition. In his opinion, "Comrade Preobrazhensky's total inability to understand the real role of the law of value in our economy is displayed . . . in this barren contrast. . . . In the final analysis, socialism of course leads to the full elimination of the market and market relations. But there can be no more grievous and harmful error than to mistake the results of a process for the process itself."
Not for Comrade Gol'denberg, who of course knows what I am talking about and who is busy putting together his refutation, but for the benefit of readers who may take these "arguments" of his seriously, let me make the following comments:
(1) No genuinely scientific analysis of a transitional commodity-socialist system of economy is conceivable without understanding what that economic formation is a transition to.
(2) It is only by being continuously aware of the two poles of the process— the beginning and the end—that we will be able to understand the historical status of each transitional form, without losing ourselves in details and without sliding back into vulgar economics, which tries to pass off a superficial description of today's situation as a scientific analysis of the present economic system.
(3) The contrast we are talking about here can be found in the works of Marx, Engels, and Lenin. Without counterposing, in principle, capitalism to socialism, even a complete analysis of capitalism itself is inconceivable. The reader will find proof of this assertion in Capital, Anti-Dühhng, Marx and Engels' correspondence, and so on. It was only by counterposing socialism to capitalism that Lenin could offer a theory of monopoly capitalism.
(4) Marx based his study of capitalism on an analysis of abstract capitalism; that is, according to Gol'denberg, he mistook the result of the process for the process itself. And, as we know, in doing so he incurred the bitter attacks of the entire international of vulgar economists and philistines.
(5) Counterposing socialism to capitalism in principle is also a methodological prerequisite for an analysis of each period in the development of the commodity-socialist form of economy. Since the whole process of movement toward socialism is a process of struggle between one economic formation and another, neither the relative importance of the conflicting sides, nor the unique features or recurrent patterns of each period, nor even a whimsical muddling of the process of struggle with its immediate results can be understood if we do not always have before us a notion of what is being transformed and of where this transitional economy is heading. To forget this is, in the area of theory, to slide back to Bernstein, with his famous dictum: the movement is everything; the goal is nothing.
The absurdity of Comrade Gol'denberg's captious objections is too obvious to merit long discussion. However, it is certainly no accident that Comrade Gol'denberg and certain other opponents are irritated by the counterposing of socialism to capitalism in a study of a particular stage of the transitional economy. After all, being able to unite this counterposition with a concrete analysis of a particular period in the development of a commodity-socialist system of economy means beginning an analysis of the struggle between two principles in our economy; it means seeking the general features of that struggle; like it or not, it means, in analyzing the main lines of development of state economy, taking up the question of the law of primitive socialist accumulation. But my opponents do not relish the prospect of doing that. And for that reason they are condemned, on the one hand, to repeat the same old phrase—changing only the words and the expressions—about the struggle between the planning principle and the market, and on the other hand, to put together a blend of a few Marxist terms with a description of the state's actual economic policy, which they then try to pass off as an analysis of our economy. And that happens to be the theoretical tailism that is merely the ideological expression and the justification of tailism in practice.
One only has to read through Comrade Gol'denberg's article to see that it goes nowhere at all, that he only throws out polemical sideswipes at me, often with my own ideas, and then serves this up to the reader as an "analysis" of Soviet economy. Just think of all the riches the reading of that article has bestowed on us! Why, before Comrade Gol'denberg came along we never suspected that "it is necessary that the peasant economy produce more for the market before it can be coordinated with socialist industry," that "the extension of the planning principle presupposes gaining control over market relations," that "this path toward socialism has its dangers and its difficulties," and that we accumulate not only from the surplus product of the countryside but also from industry itself. There you have the kind of profound new thoughts with which Comrade Gol'denberg inundates me in his polemical article.
Imagine, dear reader, that you and I are going from Moscow to Leningrad and we have already passed through Tver'. Up comes Comrade Gol'denberg and starts to prove that it is impossible to travel the road from Moscow to Leningrad without going through Klin.
You're quite right, Comrade Gol'denberg, you have to pass through Klin, and we've done that. And what next? How do you intend to enrich our knowledge next? But just let me ask of you one thing: when we get to Leningrad, don't break the crushing news to us that you have to pass through Tver' to get to Leningrad, and that you have to pass by the Volga, which empties into the Caspian Sea.
Comrade Gol'denberg reproaches me for not saying anything about "how the relations of the commodity economy grow over into socialist relations, but only about how one formation is ousted by the other." This reproof is clearly designed to take advantage of the fact that not all the readers of Bol'shevik are familiar with my works, which Comrade Gol'denberg has undertaken to "crush." In the brochure From NEP to Socialism, in two chapters of my book on the theory of the Soviet economy, and throughout The New Economics, I repeatedly speak not only of the ousting of some forms by others but also of how historically backward forms are subordinated to and transformed by the working of the dominant mechanism of the socialist sector of the economy. Comrade Gol'denberg's objection is therefore formally incorrect. But, like others of his objections, it does have its logical and social sense. Comrade Gol'denberg is dissatisfied with my analysis because I "split our country's whole economy into two halves—one ruled by planning, and one in which spontaneity prevails. ..." Nowhere do I state that planning already fully governs the state economy: there is more than enough spontaneity here. But I do assert that the initial economic basis for planning, for the socialist principle, and for the development of expanded socialist reproduction—that is, the basis on which the law of primitive socialist accumulation can begin to operate—is our state economy, which is engaged in a struggle with the private economy, completely irrespective of the forms that struggle may take. Coexistence with the private economy by no means excludes struggle, just as the coexistence of the Soviet state with capitalist countries is merely another expression of the proletariat's class struggle with bourgeois society. Is it really not obvious that the transformation of lower economic forms into higher forms—for example, the establishment of producers' cooperatives among the peasantry with the support of state industry—is the product of the struggle between the socialist city and the medieval economy of the countryside? The unity of the whole system in a certain sense rests on the coexistence of these two economic formations in our economy, but the equilibrium of that system is achieved on the basis of a struggle along the entire front. This struggle between the socialist principle and the private economy is being waged abroad, since our links with the world economy have not been weakened but are growing and will continue to grow. This struggle goes on at home, since the state economy's link with the private economy through the market has not been weakened but is growing. The struggle encompasses the entire range of relations: the ousting of some forms by others, the subordination of some forms to others, and the transformation of lower forms into higher ones are the products of struggle and not of "peaceful renewal." For this reason it is impossible to conduct a scientific analysis of our system without making that "split" that Comrade Gol'denberg dislikes. And vice versa. Concealing all the elements of struggle between the two formations (as long as it is not due to simple misunderstanding) is at best a product of a casual stroll along the surface of the socioeconomic phenomena occurring in the Soviet system, and from the standpoint of predicting what will happen tomorrow it promises us some very cruel disappointments; at worst all this can lead to the reproduction, in a new set of circumstances, of the Bernsteinian theory of the blunting of socioeconomic and class contradictions. But this conception alone takes the edge off none of the historical contradictions within our system in the interests of the dictatorship of the proletariat; rather, it simply disorients the ruling working class and its party and prevents it from developing the correct view of the society within which it has to fulfill its historical mission.
It should be pointed out generally that there is a regular muddle of opinions regarding the question under discussion, and this is not the fault of Comrade Gol'denberg. The analysis of our system as the social formation where progress takes place in the form of the antagonistic development of contradictions and the struggle between the law of primitive socialist accumulation and the law of value has been scandalously lumped together with the question of whether or not a blunting of class contradictions is advantageous for us. As regards the first contradiction, a scientific Marxist analysis here reveals only that which is actually the case. To criticize my conception with the reproof that it irritates the country's petite bourgeoisie means to capitulate theoretically before that stratum; it means forsaking the entire intellectual life of our party, as well as the preparation of new cadre, under the prior moral censorship of the countryside.
The only methodologically correct way to pose the question of the blunting of class contradictions within our country is as follows, We, the ruling working class, benefit from the blunting of all those contradictions that might develop against us, and we benefit from the exacerbation of contradictions wherever that process turns against capitalism. The formula of the "worker—peasant bloc" is, first of all, a formula that underscores the union of interests of the worker and the peasant against the bourgeoisie, and second, a formula meant to indicate the blunting of contradictory interests between these two classes, also in the interests of the struggle against the bourgeoisie.
A blunting of contradictions on that basis in the present period is attained first, best, and most genuinely by the industrialization of the country, that is, by cheapening the products of urban industry, by intensifying agriculture and reabsorbing the excess labor power in the countryside, by issuing long-term credit to the countryside (which a weak industry cannot do), and by establishing producers' cooperatives among the poor peasantry. This process means at the same time the creation of the conditions for greater coordination and organization of the country's whole economy around the state sector, for tighter links between the petit bourgeois encirclement and the controlling centers of our economy, and for drawing the village closer to the town. From the sociological standpoint, this process means an overall consolidation of Soviet society, its greater internal coherence and ability to resist outside pressure, and, finally, the replacement of loose petit bourgeois peasant patriotism, totally unreliable in the event of a foreign war, by the socialist patriotism of an industrialized country ruled by the dictatorship of the proletariat.
But this process, which will save our class, the Soviet system, socialism, and the socially progressive elements of the countryside, is at the same time a torturous, long, and dangerous one— and the longer it takes, the more dangerous it will be, because our main enemy will inevitably have to try to interrupt it as soon as possible.
On the other hand, the pressure exerted by the law of value of world capitalism on our economy, a pressure that is relatively weak as long as we are linked with the ocean of the world market by the narrow Dardanelles of our present level of imports and exports, will inevitably grow. And the question of the pace of industrialization is thereby transformed into the question not only of internal economic and political equilibrium but also of our existence in the face of our main opponent.
But given the negligible influx of foreign capital into the country in the form of long-term credits, the problem of industrialization rests upon the problem of using our domestic resources to ensure at least approximate proportionality in the distribution of productive forces between the town and the countryside. Hence the problem of primitive socialist accumulation, with its equations of proportionality of expanded socialist reproduction, which are dictated to us from without, with seemingly mandatory force. Hence the law of primitive socialist accumulation, which was not invented by Preobrazhensky for polemics with his opponents, but which ensues objectively from the conditions of struggle of our state economy, created by the October Revolution, with the capitalist world. Among other things, this law dictates to us certain proportions of alienation of the surplus product of the countryside for the purposes of expanded socialist reproduction. By objecting to the question being posed in that way, my opponents are not polemicizing here with me personally nor with all of us industrializes; rather, they are essentially grumbling about the objective conditions under which the construction of socialism in one country—one peasant country, at that—is occurring. Their attacks are (and it would not be difficult to demonstrate this point once again) merely the ideological and political reflection of the backward tendencies of our economic development. The notion that my opponents are advocating a cautious policy that is more adequate to our conditions and better able to support the workers' bloc with the majority of the peasantry is fully and totally refuted by the facts.
When there is a goods famine—that is, in our particular situation, when there is insufficient socialist accumulation in industry—and the peasants each year pay out hundreds of millions too much on the difference between wholesale and retail prices to private capital or to the cooperatives, which themselves are often engaged in speculation; when they have unused money surpluses and their unsold grain is being eaten by mice, the appropriation of a couple of hundred million from the reserves of peasant accumulation for the development of industry will of course give rise to certain discontent. But at the same time, such a policy begins to create the preconditions for allaying that discontent through the expansion of production, the recruitment of new workers from the countryside, the increase in commodities offered on the market, and the halt in the exploitation of the peasantry by merchant capital. On the other hand, a policy of systematic underaccumulation and goods famine, and the high retail prices that are inevitably associated with those phenomena, gradually builds up peasant discontent, which is then not allayed but continues to grow, so that this pressure from the countryside threatens our system of protectionism and the foreign trade monopoly. All this can have very serious consequences for the whole business of constructing socialism in our country. This policy is one of concession to economic backwardness; it is a policy that is cautious in appearance only: at a certain stage of our economy's development it will be transformed into its opposite.
Comrade Gol'denberg sidesteps the question of nonequivalent exchange between socialist industry and petty production and, in criticizing the way in which I pose the question, he effectively declares for equivalent exchange. We need complete theoretical clarity on this important point, not such attempts to evade a direct and concrete formulation of the whole problem. I suggest that Comrade Gol'denberg and my other critics state precisely what it is they are actually advocating on this point. And if they declare for equivalent exchange—to which they are inclined, to one degree or another—then I shall be obliged to show that they are either demonstrating their economic illiteracy or that, on the point under examination, they have broken with Marxism and have moved over to a position of petit bourgeois populism. I will undertake to prove that, when it comes right down to it, they advocate a tax on socialism for the benefit of petty production.
The extent to which Comrade Gol'denberg does not understand my fundamental point of view in the question of the law of primitive socialist accumulation, although he quite freely expounds and criticizes it, is evident from the following triumphant comment he directs at me. He writes: "According to the prospective five-year plan drawn up by the State Planning Commission (Gosplan), we will, in the next five years, invest 5 billion rubles in our fixed capital, of which 4.4 billion will come from industry itself; that is, the 'transfer' that Comrade Preobrazhensky regards as the main thing, the basic thing, and so on, will account for only slightly more than one-tenth of the total sum of what, according to this plan, will constitute the main type of actual socialist accumulation in the next five-year period."
In formulating what is for him a truly death-dealing objection, Comrade Gol'denberg "forgot" to tell the reader the disposal prices that will be necessary for all this accumulation to take place.
He "forgot" to say that all this will take place at prices very much higher than world market prices, that is, by excepting ourselves from the law of value of world economy—in other words, by means of a much greater nonequivalence of exchange between large-scale and petty production than we see in the world economy,* by retaining the foreign trade monopoly, socialist protectionism, etc., in short, on the basis of the law of primitive socialist accumulation. If the worldwide law of value is in operation and our domestic prices take shape accordingly, we not only will not receive this 5 billion but will lose fully half our total fixed capital.
The reader can see from this example what a delightful pursuit it is to engage in polemics with opponents like Comrade Gol'denberg, and how well they understand the things they criticize.
However, Comrade Gol'denberg, who understands everything so well, does admit that there is one point in my exposition he has not quite caught (which does not prevent him from exercising his wit— and not on account of his own lack of understanding). He does not understand "why, actually, Comrade Preobrazhensky says that the law of primitive socialist accumulation is the form in which the elemental regularities of an unorganized economy dialectically grow over into a new form of attaining equilibrium." Why dialectically? What has dialectics to do with all this?
Before I explain to the reader what dialectics has to do with all this, I would like to mention that Comrade Gol'denberg, who reproves me for my "vulgar mechanistic approach to the question," openly awards himself a diploma for skill in dialectically approaching the study of our economy. It is unlikely that the word "dialectics" will ever have any luck with us here. People who have never read Hegel, not to mention those who have read him but not understood him, bend that word in every possible way. With their ceaseless repetition of it they terrorize the reader, who starts to be ashamed of his ignorance and accepts the hawkers of the word "dialectics" as people who have mastered the method of Hegel and Marx to perfection.
Comrade Gol'denberg must have known that by using the polemical methods that he applies against me one can "destroy" the most complete, the most classical study, one that scientifically reproduces the dialectical process of social development, from Marx's Capital right on down the line. After all, the dialectical process is first and foremost unity. A description of one or another isolated aspect of that unified process can always be "successfully" counterposed to the whole, if one leaves the ground of dialectical logic and floats about in the sphere of what Hegel calls "simple and particular determinations."
This is all the more easily done since dialectical movement is movement that develops on the basis of an internal contradiction. We have an example of that sort of criticism right before our eyes. Having learned from my exposition that the law of primitive socialist accumulation, as it applies to the distribution of the country's material resources, is the law of transfer of values from precapitalist forms of production to the state economy of the proletariat, my opponent writes: "Such an 'understanding' of the fundamental law of socialist accumulation naturally leads to the assertion that the law of value restricts accumulation." However, my opponent does not feel it advantageous for him to understand that the matter is not limited merely to this aspect of the law. The law of primitive socialist accumulation competes with the law of value not only in the sphere of distribution of the surplus product of the country but also in all aspects of regulation of economic life, above all in the distribution of labor power. I discuss this point throughout The New Economics, and also, in particular, in the article "The Law of Value in Soviet Economy," which Comrade Gol'denberg criticizes. The sentence quoted above, which contains the words "dialectical development" that Comrade Gol'denberg apparently has such difficulty in understanding, refers to the struggle of the law of primitive socialist accumulation with the law of value in the entire sphere of economic relations, therefore also in the struggle to achieve a unified regulation of the economic system. My critic reveals himself here to be fully one of those hawkers of the word "dialectics" of whom I spoke earlier.
Now, for the benefit of Comrade Gol'denberg, if he seriously does not understand my conception—but above all for the reader —I will explain, in a few words and in the most straightforward way I can, what I meant to say in the sentence quoted by Comrade Gol'denberg.
If economic relations in our country were now to develop on the basis of the free operation of the law of value of the world economy, that would lead to a situation where, given present-day prices on the world market and the present overindustrialization of Europe, two-thirds of our large-scale industry would be eliminated because of its unprofitability and uselessness from the capitalist standpoint, from the standpoint of the world division of labor on a capitalist basis. Our agriculture, on the other hand, would suffer severely in the long run from the transformation of the entire country into an agrarian semicolony of world capital, although it would undoubtedly profit in the first few years because of the much lower prices for industrial articles and because of the much more nearly equivalent exchange on the world market. Since there is no German, American, or Russian law of value, but only a law of value for the world economy as a whole, which is merely manifested with certain variations and aberrations within a particular country or group of countries, then if that law were allowed to extend its workings directly into our territory, under the pressure of the world market from without and as a result of the development of commodity relations within, it could overthrow our whole system. After that the distribution of productive forces would occur here in whatever way would be necessary for the reproduction of capitalist relations throughout the world economy (and not in the interests of industrial capitalist development in our country, as is the dream of the Mensheviks, who on this point display, in addition to everything else, downright economic illiteracy and a failure to understand the general tendencies of contemporary world economy*). The only regulator in our economy would then be the law of value.
What, then, in our country stands in the way of the law of value, whose intensified operation would mean reinforcing tendencies that would lead toward the overthrow of our whole system?
Every reader can count on his fingers the factors that counteract the law of value in our country: the foreign trade monopoly; socialist protectionism; a harsh import plan drawn up in the interests of industrialization; and nonequivalent exchange with the private economy, which ensures accumulation for the state sector, notwithstanding the highly unfavorable conditions created by its low level of technology. But all of these, given their basis in the unified state economy of the proletariat, are the external means, the outward manifestations of the law of primitive socialist accumulation. In the struggle between this law and the law of value we are able each year (more or less successfully) to distribute the country's surplus product and its productive forces as a whole in a way that on the one hand ensures that social needs are to some extent satisfied and on the other hand creates the preconditions for expanded socialist reproduction for the following year and even for a number of years to come. Equilibrium in the system as a whole is attained on the basis of the antagonistic interplay of the two laws; and in this process the scale on which state industry is developed, and hence the amount of the surplus product of agriculture that is appropriated to further that development (regardless of whether that appropriation takes place through taxes or price policy), is dictated to us with seemingly binding force. The law of value is abolished as regulator of the economy through its replacement by the law of socialist accumulation. Not only does the mode of regulation change here, that is, not only does planning replace spontaneity, but the material content of the whole process also changes in the sense that each year a different distribution of the country's productive forces is obtained in comparison with what we would have had if the law of value were to operate freely. The planned distribution of our productive forces is governed by a second objective goal, that of maintaining and developing the socialist sector of the economy, which, on the one hand, must satisfy a certain part of the country's social needs with the output of its own production and, on the other hand, must ensure further growth, that is, ensure a certain level of accumulation. In such a system, of course, the volume of the country's social consumption will also come increasingly under the influence of that law as time goes on. It is quite obvious here that the gradual subordination of the country's system of exchange to regulation by planning within the state economy means that the law of value is gradually transformed through struggle into a historically higher type of regulation: that law is not only abolished, it is transformed into the law of primitive socialist accumulation. All this occurs on the basis of market exchange, and in this process the law of socialist accumulation gradually removes the content of market relations, while for the moment not affecting their form, and at the same time this process proceeds much more rapidly within the state economy and develops much more slowly and agonizingly at the junction between the state and private sectors. As it develops, the law of primitive socialist accumulation simultaneously begins to resolve both the problem of proportionality in the distribution of existing productive forces—a problem that faces every type of social production—and the problem of expanded reproduction, but in socialist rather than capitalist forms. At present we still do not know what laws will underlie our state economy when it has caught up with and surpassed capitalist technology, that is, when true socialist accumulation begins. This will also depend on how things stand with the struggle for socialism and the construction of socialism in other countries. Nor can we forsee the things that might hasten or, on the contrary, retard or cut short the process of our socialist construction as a result of our relations with the capitalist world. But for the present period, when our development must take place at a lower level of technology than is the case under capitalism (and, moreover, in isolation from the rest of the world economy), the law of primitive socialist accumulation is the law of our development and self-preservation. Every serious Marxist investigator of our economy discovers that law, however he may formulate it, especially if he is dealing with the problem of economic equilibrium in our system when that system is linked up with today's world market.*
From the foregoing the reader can see how unfairly the author of these lines has been charged with trying to undermine the bloc of workers and peasants or blamed for advocating such slogans as "the transformation of the peasant economy into a colony for socialist industry." I ask my critics, who regard themselves as Marxists and Leninists, and who have advanced these charges, to answer the following questions:
(1) Is it not true that expanded capitalist reproduction requires a certain proportionality between the volume of accumulation and the volume of social consumption?
(2) Is it not true that under concrete capitalism the industrialization of economically backward countries is facilitated and hastened by the import of capital from advanced industrial countries?
(3) Is it not true that technological progress and the rise in the organic composition of capital—which means the growth of constant capital both in the branches producing means of production and in those producing means of consumption—requires an ever faster growth in the production of means of production and thus a faster growth of the social capital employed in that department, that is, above all, a proportionately faster accumulation in the sphere of heavy industry at the expense of the economy as a whole?
(4) Is it not true that we are already using all our fixed capital and are now compelled to solve two tasks at the same time: the task of more rapidly satisfying social needs and the task of creating new fixed capital, whose functioning will not start to show results, in the sense of an expansion of the supply of commodities, for several years?
(5) Is it not true that in an economically backward country with a socialist regime, which at the moment has no capital imports and is compelled to struggle against the entire bourgeois world, the rate of internal accumulation must necessarily proceed at a far faster rate than in any capitalist country with the same level of development of productive forces?
(6) Is it not true that the rapid shift of the peasant economy over to commodity production in such a country requires a supplementary growth of industry and, consequently, supplementary industrial accumulation if it is to maintain economic equilibrium?
(7) Is it not true that the industrialization of every country, especially a country with a socialist regime, requires raising the level of culture and professional skills of the working class—which means a systematic growth in wages?
(8) Is it not true that, after deducting what is accumulated on the state economy's own base, the remaining part, which is accumulated at the expense of petty production, cannot drop below a certain minimum, a minimum that is dictated to the Soviet state with rigorous economic necessity?
(9) Is it not true, finally, that underaccumulation in state industry leads to a goods famine, a rise in retail prices, accumulation of private capital, and a broadening of the gap that separates the town and the village?1
No Marxist can deny that all this is true. But if it is true, this scientific analysis should be able to furnish us with the correct arithmetic values for economic policy and for drawing up an economic plan for the country.
And at the same time it is quite obvious that if we are plagued by a systematic goods famine and fail to satisfy effective demand, if we have the hoarding of money in the countryside—money with which the peasants cannot buy commodities—and the hoarding of grain surpluses, eaten by mice and rats and lying unmoved for eight or nine months, plus abnormally high grain prices for a good harvest, then we have before us an unequivocal empirical proof that there has been some sort of mistake in the sphere of distribution of the country's surplus product. At the present time it is underaccumulation, not overaccumulation in industry, that is the potential underminer of the worker–peasant bloc, since if this situation continues for very long the peasantry will have to seek an alliance not with our industry, but with that of foreign capitalism.
The problem of the worker–peasant bloc has a different content in different periods. Simply repreating the bare phrase about that bloc is of no benefit, nor does it save us from any dangers, and the peasantry itself is irritated because it is so void of content. Leninism here means giving a new content to this slogan at each new stage, one that follows from the economic and political situation, from the domestic and international situation. At the present stage, the policy of industrialization, the policy of increasingly rapid socialist accumulation, is the material expression of the slogans "bloc" and "alliance." For so long as we now have a gaping deficit, so long as we live under the Damoclean sword of a growing pressure on us from the world market, industrial underproduction and our technological backwardness are the most serious threat to the cause of maintaining the worker–peasant bloc.
And when under these circumstances the conscientious attempt to think through the conditions that would be necessary for safeguarding and developing our state economy again and again encounters a repetition of absurd charges about "colonies," then do we not have a right to fear that such a method of polemics can, under appropriate conditions, serve as a rallying cry for mobilizing the country's petit bourgeois backwardness against socialism? Now, while it is not surprising that Comrade Gol'denberg and other of our young self-styled professors who have not accompanied our party through the long school of determined struggle against populism and Menshevism should yield to the moral pressure of the 100-million-strong petit bourgeois mass of the country, and while their political inexperience tends to excuse their various zigzags toward a Kuban, Penza, or Kursk "magnetic anomaly," what can one say about the old comrades, the old Bolsheviks, who encourage these zigzags and who themselves often do not weigh their arguments against their possible political consequences? Is it really permissible in the polemical heat of intraparty discussions to forget the fundamental social and historical ties that unite us?
In conclusion I would like to say a few words about the practical verification of the general theoretical positions that have guided the author of these lines since 1923 and for which he has been so bitterly attacked.
In 1924, when my article on the law of socialist accumulation was written, my opponents most of all feared industrial overaccumulation and industrial overproduction. They mechanically transferred to 1924 and the years following the experience of the sales crisis of late 1923—a crisis that they did not correctly understand and that they exaggerated beyond all measure. Their slogan was "more caution in the development of industry, more caution in accumulating." They called for a reduction in prices, no matter what, with no regard for the problem of accumulation. They even went so far as to talk themselves into accepting as a general guideline for the future the totally false economic thesis of first a reduction in prices, then accumulation, instead of the only correct slogan: first accumulation, on that basis a reduction of cost of production, and then a reduction of prices. At that time doubt was cast upon the very slogan "socialist accumulation," and they saw in it a threat to the continuation of the worker—peasant bloc. The years 1925 and 1926 arrived with their acute goods famine, with the upset of the balance of payments between city and village—the natural consequence of underaccumulation—and it was plainly revealed that the problem of socialist accumulation that I had raised had been a scientific prediction of the goods famine, a timely forewarning, an attempt to direct the party's attention to the imminent danger of underaccumulation, while my opponents had been orienting the party in precisely the opposite direction. By now there is no way to hide or slur over that fact. My opponents' general theoretical presuppositions, along with their inability to apply the Leninist method to a new set of circumstances, has led to practical mistakes in the area of economic policy. And the theory of socialist accumulation, which was proclaimed anti-Leninist, has by some miracle correctly predicted the difficulties that now are upon us and that have, after a year and a half or two years, become clear to all. The accuracy of the industrializes' prediction is also borne out in other points of our disagreements. Comrade Trotsky's report to the Twelfth Party Congress was viewed by some as extremely industrialist, and yet the economic policy outlined there to cover a number of years proved to be quite correct.
At the Thirteenth Party Conference, Comrade Piatakov supported the thesis that the trusts should earn the greatest possible profit while keeping disposal prices and wages at their present levels; that is, he defended a policy of utmost economy in the interests of accumulation, whereas the comrades who criticized him launched the slogan of least possible profit. In doing so they irresponsibly confused the slogan of greatest possible profit, all other conditions being equal, with the slogan of maximum prices, and in this way were able to celebrate a cheap but quite short-lived victory. Now there is scarcely anyone who would seriously undertake to defend the so-called principle of least possible profit. On the contrary, all the efforts at rationalization—efforts that often take a clearly incorrect, at times even harmful, turn—are nothing other than an attempt to ensure state industry a large profit, while prices remain the same as now or even lower; that is, an attempt to implement the so highly criticized slogan of 1923.
Why did Comrade Piatakov prove to be right and his opponents wrong? Because he, like all industrializers, correctly stood for the most rapid industrial accumulation possible—a position that was a prediction of both the goods famine and of the economic difficulties that arose during the transition from the use of old fixed capital to the creation of new. At the same time he put forward a more correct concept of our economy as a whole and the path of its development than did his opponents. This correct general theoretical approach obliged Comrade Piatakov to raise the problem of running the entire state economy as a unified whole, with all the organizational conclusions that follow from it. Today all this seems like a truism, but at the Thirteenth Party Conference the "realists" derided Comrade Piatakov as a hopeless Utopian.
Later, Comrade Trotsky submitted his articles Toward Capitalism or Socialism,2 in which he most fruitfully posed the question of working out dynamic coefficients for comparing our economy with the economic system of world capitalism. This question, whose importance has still not been sufficiently appreciated by our party, could likewise be posed only on the basis of a theoretical conception of our economy that was correct in principle.
A correct theoretical analysis of our economic system is of prime importance for our politics, our practice in general. I would like to underscore with particular force at this point the difference between bourgeois and socialist economics. In capitalist society, economic science plays a very modest role for the agents of capitalist production. Maintenance of equilibrium in the economy, if one may put it that way, is left up to the law of value. In its spontaneous way this law maintains equilibrium in the overall system more intelligently and more reliably than bourgeois science, bourgeois professors, and bourgeois governments. Although this method of regulation costs society a pretty penny, since it gives notice of errors committed in the distribution of the productive forces only post factum, there is in bourgeois society nothing that can replace it. And while monopoly capitalism attains a higher degree of organization in one or another branch of the economy within a country, it is unable to eliminate the economic planlessness within the national economy as a whole, much less on the world market.
The Soviet state, on the other hand, relying on nationalized large-scale industry, transportation, credit, and foreign trade, is compelled by the very fact of nationalization to defend itself and to launch a planned offensive, thereby turning a new page in the use of economic science for production. As time goes by, we are increasingly compelled to regulate the economy in a planned fashion by giving increasingly free rein to the law of socialist accumulation. But to plan, we must predict. And to predict, we must unceasingly, on an ever-greater scale, and with increasing thoroughness investigate with scientific searchlights the entire visible range of causes and effects in the economic sphere. Our economy is becoming more complex; regulation is growing more and more difficult and crucial; it is encompassing an ever greater range of economic relations and setting in motion increasing masses of people and material values. As the entire management mechanism becomes more centralized, large mistakes become every more dangerous. The role of the planning organs is continuously growing. Being a good politician is in general becoming more and more insufficient for being a good framer of economic policy, for being a leader of an economy of our type, that is, in the leading ranks of a socialist economy. As time goes by, improvisation and dilettantism are becoming more and more harmful for our economy. A policy of frugality demands—if we go beyond mere details—fewer mistakes by our leadership. And the way to achieve that with the least expenditure of effort is precisely by having a correct theory of our economy, that is, in the most democratic way, the way most accessible to every person who really wants to learn and move ahead.
But what do we see in our country in this area? Since Lenin's death we have had no broad, generalizing conception, continuously subject to testing by fresh facts, that could lay the basis for a scientific theory of our economy. Everything that has been done in this respect by the so-called industrializers has been met with a hail of objections and accusations of anti-Leninism, Trotskyism, petit bourgeois deviation, and so on.
Granted, by now there is no one who believes that latter charge any longer, and people will soon cease to believe the others as well. That does not, however, move things forward at all in the sense of getting our critics to make a positive contribution toward a theory of the Soviet economy. My opponents are quite energetic when it comes to polemics and to inventing all sorts of formulas for their accusations, but the question arises, What do they offer as a positive alternative to my concept? The years go by, new facts are gathered, our experience goes on: but what positive contributions have they made to the party in the sense of being able to draw general conclusions from that experience? After all, we Bolsheviks are a very demanding lot when it comes to theory: we have in our past the monumental works of Marx and Engels; we have Lenin. With that kind of legacy on our shoulders we do not content ourselves with floating on the surface of vulgar Soviet economics.
My opponents have provided almost nothing new in the theoretical sphere. And I venture to predict that as long as they adhere to their present positions of theoretical cowardice and eclecticism, they will not provide anything in the future that—without falling into ridiculous self-conceit—they could pass off as a theory of Soviet economy. That is, they may write a sizable number of articles, brochures, and maybe even books. But all that will not be what our economy and our party needs in the area of theory. By holding to their position denying the law of socialist accumulation, that is, by repudiating the attempt to construct a dynamic, proletarian, Marxist-Leninist concept of our economy, they condemn themselves to theoretical sterility, for you cannot get a theory of Soviet economy by adding a little saliva to well-chewed general statements that everybody has long been familiar with and no one would question.
*"The Fundamental Law of Socialist Accumulation," chap. 2, and "The Law of Value in the Soviet Economy," chap. 3. The entire book has recently been published by the Communist Academy.
**E. Gol'denberg, "Zapozdalyi refleks" ["Delayed Reflex"], Bol'shevik 7-8 [1926].
*There is also no equivalent exchange between these sectors in the world economy, because prices on agricultural products are established on the basis of competition between small-scale peasant production and large-scale and medium-scale capitalist agriculture.
* Incidentally, in the struggle with the Mensheviks, we make almost no use of the argument that the elimination of the Soviet power and fulfillment of the Menshevik slogan of "back to capitalism" means in practical terms unemployment for two-thirds of our working class and, indeed, its most highly skilled segment.
*In the chapter of my book devoted to this latter topic, I try to express the law of primitive socialist accumulation quite graphically using both abstract and concrete schemes for the distribution of the productive forces under a commodity-socialist system of economy.
1 The nine points enumerated here by Preobrazhensky are by no means as straightforward as he makes out and, in fact, represent the main conclusions that he was to draw from the first and third articles on "Economic Equilibrium" ("The Problem of Economic Equilibrium Under Concrete Capitalism and in the Soviet System" and "Economic Equilibrium in the System of the USSR," respectively).
2 Towards Socialism or Capitalism? (London: New Park Publications, 1976), (Originally published in Russian in 1925 as K sotsializmu ili k kapitalizmu?)