THE MARKET UNDER SOCIALISM
This has not been published before, at least to our knowledge.
It was circulated to the members of the Stalin Society (UK) -
an organisation founded by W.B.Bland.
It forms part of the Collected Works of Bland in preparation.
May 1, 2005
With the permission of the Committee of the Stalin Society, I am
circulating to members a statement on the present situation in Albania
by another former Secretary of the Albanian Society and myself. An
Albanian translation is being circulated underground by Albanian
I am taking the opportunity at the same time to circulate a
clarification and amplification of the points I made in the discussion
which followed Ella Rule's excellent paper on Stalin's Economic
Problems of Socialism in the USSR'.
W. B. Bland
THE MARKET UNDER SOCIALISM
there a Market under Socialism?
It was suggested during the discussion that the term 'market' had
relevance only to a capitalist society.
But the dictionary defines the term 'market' as
". . demand (for
('Oxford English Dictionary', Volume 9; Oxford; 1979; p. 305).
and the term 'demand' as
"a call for a
commodity on the part of consumers".
('Oxford English Dictionary', Volume 4; Oxford; 1979; p. 430).
But in a socialist society, as in a capitalist society, people possess
varying sums of money which they spend in shops on commodities which
are on sale. This willingness and ability to expend money on
commodities constitutes demand,
constitutes a market.
Clearly, both in
a capitalist society and in socialist society there is a
'market', for commodities.
"...the dispersal among
consumers of commodities produced."
('Oxford English Dictionary', Volume 4; Oxford; 19009; p. 8S3).
The principle on which distribution is carried out under socialism is
"The right of producers is
to the labour they supply".
(K. Marx: 'Critique of the Gotha Programme', in: 'Selected Works',
Volume 2; London; 1943; p. 564)
that is, incomes are proportional to -- the distribution of
commodities is geared to -- the quantity and quality of work
Marx admits that distribution of commodities according to work
performed is not
completely fair, is not distribution completely according
to need. He points out:
"One man is
superior to another physically or mentally, and so supplies more labour
in the same time, or can labour for a longer time...Further, one
worker is married, another not; one has more children than another, and
so on and so forth...
But these defects are
inevitable in the first phase of communist society as it is when it has
just emerged after prolonged birth pangs from capitalist society. Right
can never be higher than the economic structure of society".
(K. Marx: ibid.; p. 654, 565).
Nevertheless, this is the nearest that a socialist
society can get to a completely fair system of distribution, the
nearest that a socialist society can get to distribution according to
need. And it is a much
fairer system of distribution than is a capitalist society, where the
purchasing power of one whole section of society -- the capitalist
class -- depends primarily on the quantity of means of production owned.
According to Stalin:
"...the basic economic law
of socialism...(requires) the securing of the maximum satisfaction of
the constantly rising material and cultural requirements of the whole
(J. V. Stalin: 'Economic Problems of Socialism in the USSR'; Moscow;
1952; p. 45).
For the word 'requirements', we may substitute the word 'needs':
"REQUIREMENT: that which
is required or needed; a...need".
('Oxford English Dictionary') Volume 13; Oxford; 1989: p. 682).
Since it is not possible under socialism for even the essential
needs of society to be fully
satisfied, the principle of distribution according to work performed
fulfils Stalin's criterion of a socialist society by achieving the
maximum possible satisfaction of the needs of society.
Only after socialism has given way to communism
can a completely fair principle of distribution be introduced -- the
"...to each according to
(V. I. Lenin: 'The State and Revolution', in: 'Works', Volume 7;
London; 1937; p. 88).
This principle of distribution is possible only when the productive
forces have been developed to the point where there is an abundance of
the necessaries of life and when people's attitude to work has changed
from that which existed under capitalism; that is:
"when people have become so accustomed to observing the
fundamental rules of
social life and when their labour is so productive that they will
voluntarily work according
to their ability..."
(V. I. Lenin: ibid.; p. 88).
Because distribution according to work performed gives a material
incentive to workers to maximise production, it advances society as
quickly as possible the requirement for communism of 'an abundance of
the necessaries of life'.
Of course, distribution according to need under communism can never be
absolute. While we may say that communism has been attained when all
the necessities of life can be distributed according to need, the
productive forces will continue to be developed and new needs will
arise which can at first be satisfied only on a rationed basis, e.g.,
on the socialist principle in accordance with work performed.
Planned Production under
According to Stalin, as has been said:
economic law of socialism...(requires)...securing the maximum
satisfaction of the constantly rising material and cultural
requirements of the whole of society".
J.V. Stalin: op. cit,.; p. 45).
For the word 'requirements' we may substitute the word "needs":
REQUIREMENT: that which is
required or needed; a...need".
('Oxford English Dictionary', Volume 13; Oxford; 1989; p. 682).
It was suggested during the discussion that an essential difference
between capitalism and socialism is that under capitalism production is
for the market, while under socialism production is for use.
I suggest that this is a false contradiction.
Marx defines a commodity as a useful thing produced, not for the
personal use of the producer and his family, as in what he calls
'natural' production, but for
exchange (by barter for other commodities or by sale for
money). According to Marx:
"...a commodity is...a
thing that by its properties satisfies human wants...(and)...is
produced directly for exchange".
(Marx: 'Capital', Volume 1; p. 43, 86).
A worker in a clothing factory -- whether under capitalism or under
socialism -- does not make garments for the personal use of himself and
his family, but for exchange:
that is, he produces garments as commodities for the market.
Of course, there are fundamental differences between the production of
garments under capitalism and under socialism. Under capitalism, the
garment worker is exploited; under socialism he receives, directly in
wages or indirectly in social services, the full value of his work.
Under capitalism, production is -- as a whole -- anarchic; under
socialism production is centrally planned by the socialist state. Under
capitalism, the motive and regulator of production is the gaining of
profit by capitalists from this exploitation; under socialism, the
motive and regulator of production is the provision of the maximum
possible satisfaction of the needs of society.
But people expend the money in their possession, within the limits of
their purchasing power, on commodities which they believe will yield
them maximum satisfaction, will yield maximum satisfaction of their
for the market is not, in itself, in contradiction with
production for the maximum satisfaction of the needs of
society. Indeed, the closer the
production of consumer goods is geared to demand, to the market, the
closer does it come to yielding maximum satisfaction of the needs of
Under competitive capitalism, production is geared to the market automatically, through
the profit motive.
When there is a shortage of a certain commodity on the market, the
price of this commodity rise, so that the rate of profit on the
production of this commodity rises above the average. Spurred by the
motive to obtain the highest possible rate of profit, capitalists rush
in to increase the production of this commodity. In consequence,
production of this commodity rises until prices fall to the point where
only the average rate of profit is yielded.
When there is a glut of a certain commodity on the market, the opposite
occurs, and production falls to the point where an average rate of
profit is yielded.
There are vital differences in a socialist society.
In the first place, means of production do not come on to the market at
In the second place, the profit motive has been abolished along with
the capitalist class.
In the third place, the price of a commodity is fixed by the state
-- in general according to its value, that is, according to the average
amount of labour involved in its production.
It is, therefore, impossible for the production of consumer goods to be
to the market. It must be geared to the market by conscious decisions
of the central planning authority.
Let us take the matter of women's clothes. -- a subject on which I
have... [Ms incomplete]
Under the capitalist system, we know that this is a field in which a
great part is played by fashion, defined as:
"...a prevailing custom...spec. with
regard to apparel or personal adornment".
('Oxford English Dictionary', Volume 5; Oxford; 1939; p. 682).
It is clearly advantageous to the capitalists involved in the clothing
industry that fashion should exert a strong influence on the ideas of
people in society, and that fashions should change periodically. In
this way, women consumers can be persuaded to purchase new clothes long
before the old ones have worn out on the grounds that to wear last
year's fashion is a reflection on the wearer's social standing, which
is measured by her purchasing power.
It was the American sociologist Thorstein Veblen who pointed out the
relation between clothes and social class. He noted that in feudal
days, when the common people worked on the land, upper class women in
Europe used to cultivate ultra-white skins to make their class position
clear. Then, after the industrial revolution drove working class women
into factories for ten hours a day, upper class women went in for
deeply sun-tanned skins to demonstrate their different class position.
And nothing could demonstrate more clearly than the crinoline that the
wearer didn't work in a factory.
Under capitalism, a new fashion tends to be introduced at one of the
periodical haute couture (high fashion) shows. The original designs are
hand-made for a princess or pop-star, and cost several thousand pounds,
so that they demonstrate that the wearer belongs to the upper class.
Many of these new designs are then bought at a high fee for mass
production. But by the time they have trickled down to Marks and
Spencers, a new fashion has been introduced by the haute couturists,
and the process begins again.
In a socialist society, of course, the position is quite different.
Nevertheless, clothes designers will still be necessary. Suppose the
planning authorities say: "Fashion is a bourgeois deviation", and
instruct them to design only jeans as 'the symbol of a classless
There is no great problem about producing enough jeans to meet the
requirements of the whole population. But what of the women who don't
want to wear jeans? Do they have to go on wearing the same old skirt
for all time? Do you make it a criminal offence to wear a skirt? Are
skirts really counter-revolutionary? Can such a policy be reconciled
with the basic law of socialism -- 'the maximum satisfaction of the
requirements of society'?
Of course, it is perfectly legitimate in a socialist society for
education to be given on the public media, in schools, etc. on the
aesthetic and health aspects of clothing. But the test of the success
of such education is still, ultimately, the market.
There can be only one correct position on the planning of production in
any field of consumer goods: To undertake "market research",
systematic investigation of the demand for particular...goods".
('Oxford English Dictionary', Volume 9; Oxford; 1989; p. 380).
Such systematic investigation in the field of women's clothing will
tell the planners what proportion of women want to wear jeans all the
time, occasionally and never. Designers can show new designs in fashion
parades held in stores, factories and community centres throughout the
country. Those attending can be asked to vote on new designs: 'Would
you be interested in purchasing Design 4 if it were put into production
and available at a reasonable price?'. The results of such
investigations will be incorporated in the production plan for women's
Finally, what happens if the planners fail, as a result of neglecting
market research, so that production of consumer goods is not geared to
the market? Some types of clothes goods remain unsold and pile up in
warehouses -- not because people do not have sufficient purchasing
power to buy them, for in a socialist society this is geared to the
total value of consumer goods produced), but because they do not want
Further, there will be a shortage in the shops of other types of
clothing that people do want to buy, causing time-wasting queues and
public dissatisfaction to build up. Crooks and spivs will begin to
operate a black market in skirts and costumes in little back-street
workshops, and soon distribution in this field falls into the hands of
a local mafia.
Lenin said that socialist democracy
"...is a million times
more democratic than the most democratic republic".
(V. I. Lenin: 'The Proletarian Revolution and the Renegade Kautsky',
in: 'Selected Works', Volume 7; London; 1946; p. 135).
We must see that this is made reality by ensuring that the production
of consumer goods is geared
to the market, to what what people actually want, and not
to what some bureaucrat thinks they ought to
want. This requires production to be based on scientific and democratic