Journal of the Communist League;
No.92. November 1991
Web edition 2002
The current issue of’ Compass’ comprises an open letter sent on behalf
of the Communist League to the "New Communist Party"
AN OPEN LETTER TO THE "NEW COMMUNIST PARTY
At a recent meeting organised in London by the 'New
Communist Party', some speakers expressed the view that during the Khrushchev-Brezhnev
era the Communist Party of the Soviet Union was pursuing a Marxist-Leninist,
socialist course, and has pursued a revisionist, anti-socialist course
only since about 1985.
I should like to express the opinion that this view
cannot be reconciled with known facts.
The Abolition of Centralised Economic Planning
One of the essential features of a socialist society
is that production is planned in the interests of the working people. But
from 1955, only two years after Stalin's death, revisionist economists
like Evsei Liberman were writing in Soviet economic journals of
the 'necessity' of freeing the economy from 'excessive' centralised direction
and giving greater freedom to the directors of enterprises to decide what
and how much the enterprises in their charge should produce:
"These shortcomings in economic management should be
eliminated . . . by developing the economic initiative and independence
By September 1965 Liberman's basis thesis had been adopted
by the Central Committee of the Communist Party:
(E. G. Liberman: 'Cost Accounting and Material Encouragement of Industrial
Personnel', in: 'Voprosy Ekonomiki', No. 6, 1955).
"The work of enterprises is regulated by numerous indices which restrict
the independence and initiative of the personnel of enterprises, diminish
their sense of responsibility for improving the organisation of production.
It has been found expedient to put a stop to excessive regulation of the
activity of enterprises, to reduce the number of plan indices required
of enterprises from above".
In fact, the 'indices' of the 'economic reforms' ceased
to be directives, binding on the enterprises, and became mere 'guidelines'
which enterprises could follow or not as they chose:
(CC, CPSU: Decision 'On Improving Management of Industry in: 'The Soviet
Economic Reform: Main Features and Aims'; Moscow; 1967; p.
"To extend the economic independence and initiative of enterprises the
number of plan assignments set to enterprises by ministries and departments
has been reduced to a minimum".
(A.N. Yefimov: 'Long-term Plans and Scientific Forecasts'. in: 'Soviet
Economic Reforms: Progress and Problems'; Moscow; 1972; p. 16).
"Control figures will be handed down to the enterprises, not
as precise directives, but rather as guidelines for
drawing up their plans".
So, as enterprises were transferred to the 'reformed'
system, they proceeded in practice to plan their own production - even
to the types and qualities of commodities they would produce:
(E. G. Liberman: 'Plan, Direct Ties and Profitability', in: 'Pravda',
21 November 1965).
"These enterprises (i.e., those working under the reformed
system -WBB) now draw up their production plans themselves".
This system was known euphemistically as:
(V. Sokolov, M. Nazarov & N. Kozlov: 'The Firm and the Customer',
in: 'Ekonomicheskaya Gazeta', 6 January 1965).
"Enterprises decide what range of goods to produce in terms
of physical quantities and total value of sales and other economic
(B. I. Braginsky: 'Planning and Management in the Soviet Economy',
in: 'The Soviet Planned Economy'; Moscow; 1974; p. 125-26).
"planning 'from below"'.
Under this system, the state can
influence the economy not directly by means of economic directives, but
only indirectly by the kind of 'economic levers' that are used by the state
in orthodox capitalist countries:
(R. Belousov: 'The Chief Thing is Economic Effectiveness' in: 'Pravda’,
13 November 1964).
"The attempt to make broader use of economic levers and economic
stimuli in planning of a welcome reaction against the administrative conception
of a plan".
The abolition of centralised economic planning as the
regulator of production required its replacement by a different regulator,
which could only, be profit, defined by
contemporary Soviet economists as
(L. Alter: 'Incentives must be linked with the Long-Term Planning of
an Enterprise', in:
'Voprosy Ekonomiki', No. 11, 1962).
Profit as the Regulator of Production
" . . . the difference between the price and the cost of production".
So, under the 'economic reform'
profit became the regulator of production:
(L. Gatovsky: 'The Role of Profit in a Socialist Economy', in: 'Kommunist'.
No. 18, 1962).
"Production will be subordinated to changes in profits".
So, under the 'economic reform':
(G. Kosiachenko: 'Important Conditions for the Improvement of Planning',
in: 'Voprosy Ekonomiki', No. 11, 1962).
"Under conditions of cost accountability, the sum total of economic
levers in the long run influences the enterprise through . . . profit".
(B. Sukharevsky: 'The Enterprise and Material
Stimulation', in: 'Ekonomicheskaya Gazeta', No. 49, 1965).
"In the profitability controversy some economists have based their objections
to making it a regulator of social production on the contention that profit
is a capitalist category. Such objections, of course, are untenable".
(A.Sukharevsky: 'On Improving the Forms and Methods of Material Incentives',
in: 'Voprosy Ekonomiki', No. 11, 1962).
" . . . profit serves as the most generalising criterion of the enterprise's
and the supreme criterion of the efficiency of an enterprise
is the index of profitability - that is, the profit made by an enterprise
in a year as a percentage of its total assets:
(L. Leontiev: 'The Plan and Methods of Economic Management', in: 'Pravda',
7 September 1954).
"The most generalised index of an enterprise's activity is the index
of profitability, computed as the ratio of profits to production assets".
Profit, the regulator of Soviet production since the
'economic reform', is realised not in the production of commodities.but
in their sale:
(P. Bunich: 'Economic Stimuli to Increase the Effectiveness of Capital
Investments and the Output-to-Capital Ratio', in: 'Voprosy Ekonomiki',
No. 12, 1965).
"This index (of profitability - WBB) . . . is widely used in capitalist
countries (for this is neither more nor less than the rate of profit on
(I. Kasitsky: 'The Main Question: Criteria for Premiums and Indices
Planned for Enterprises', in: 'Voprosy Ekonomiki', No., 11, 1962).
The Role of the Market
"Profit is determined on the basis of the goods marketed, and not on
the basis of those produced".
Thus, regulation of production by profit means, in fact,
regulation by the market:
(G. Kosiaschenko: 'The Plan and Cost Accounting', in: 'Finansy SSSR',
No. 12, 1964).
"We must acknowledge that . . . the market mechanism plays a regulating
role in . . production".
It means regulation by the forces of supply and demand
which operate in an orthodox capitalist country:
(L. Konnik: 'Planning and the Market', in: 'Voprosy Ekonomiki', No.
"Since commodity production exists, demand and supply . . . operates".
Soviet economists who supported the 'economic reform'
claimed, like their counterparts in orthodox capitalist countries, that
these market forces, operating through the profit motive, regulate social
production in such a way as to satisfy - as far as existing productive
resources at a particular time will permit - the requirements of the
(L. Gatovsky: op. cit.; p. 89).
"Increase of profit .. . is one of the means to satisfy most fully
the requirements of the people". (L. Gatovsky: op. cit.).
It is admitted by these economists that the 'demand'
to which production may be geared through the market is 'effective demand',
the demand expressed in terms of the money which potential consumers are
able and willing to expend on the market for commodities:
"Uneven distribution of incomes between different sections of the population
results in that the groups in the lower brackets do not fully satisfy their
prime needs, while groups in the higher brackets are able to satisfy less
The basing by enterprises of their production plans
on their assessment of the market has brought about the development of
such features of orthodox capitalist countries as market research:
(A.Rumyantsev: 'Management of the Soviet Economy Today: Basic Principles",
in: 'Soviet Economic Reform: Progress and Problems'; Moscow; 1972; P. 28).
"Industrial enterprises try to curtail the production of relatively
unprofitable and especially totally unprofitable items despite the fact
that they enjoy high consumer demand".
(A. Levin: 'Economic Incentives for Meeting Consumer Demand', in: 'Voprosy
Ekomoniki', No. 4, 1972).
"It is essential to conduct market research for practical purposes".
(L. Gatovsky: op. cit.; p. 88).
"Business is much better at the stores which have the best trained
staff of sales assistants. . . . The motto there is: 'Not a single customer
must leave without a good purchase"'.
Clearly, the rate of profit made by an enterprise could
have no reality if production assets of varying amounts continued to be
allocated to enterprises by the state without cost, as had been the Soviet
practice under socialism. Consequently, in order to make the rate of profit
a reality, the ‘economic reform' introduced the practice of charging
enterprises for the use of their production assets (including natural
resources such as land, minerals and water). This principle was endorsed
by the Central Committee of the Communist Party in September 1965:
(V. Sokolov, M. Nazarov & N. Kozlov: op. cit.).
"It is necessary to introduce deductions in favour of the state budget
from the profits of enterprises in proportion to the value of the fixed
and circulating assets allocated to them, with these deductions being considered
as payment for production assets".
In 1965 the annual payments to the state for the use
of production assets averaged 15% of the value of the production assets
being used by the enterprise.
(A.N. Kosygin: 'On Improving Industrial Management, Perfecting Planning
and Enhancing Economic Incentives in Industrial Production', in: 'Izvestia',
28 September 1965).
(L. Vaag: 'According to a Single Rate of Profit', in: 'Ekonomicheskaya
Gazeta', No. 45, 1965).
Later, an alternative method of payment for production
assets was introduced: the payment of a lump sum. This could be paid out
of the enterprise's own funds or financed by means of a bank credit repayable
As in the case of production assets, the rate of profit
made by an enterprise could have no reality if finance of varying amounts
continued to be allocated to enterprises without cost, as had been the
practice under socialism. In order that the rate of profit could be made
a reality, therefore, it was necessary that finance be made available to
enterprises exclusively in the form of bank credit, repayable by the enterprise
"Gratuitous financing . . . will be increasingly replaced by credit,
i.e., by a form of loan to the enterprise that must be returned".
This principle was included in the 'economic reform'
introduced in September 1965:
(L. Gatovsky: 'Unity of Plan and Cost Accounting', in: 'Kommunist'
, No. 15, 1065).
"The use of credits must be expanded".
By 1976 more than 50% of the circulating assets of
enterprises came from bank credits:
(A.N. Kosygin: op. cit.).
"At present every second ruble of circulating assets in industry comes
from credit, with the share of credit in agriculture, trade and other branches
being even higher".
and in 1967 the standard rate of interest was raised
to 4 to 4.25% for short-term loans and to 4.5 to 6% for long-term loans.
(A.N. Kosygin: 'Guidelines for the Development of the National Economy
of the USSR for 1976-1980', 25th Congress of CPSU; Moscow; 1976; p. 4243).
(A. H. Hermann: 'East-West Finance', in: 'The Banker', Volume 121,
No. 546; August 1971; p. 878).
Consequently, where an enterprise is in process of
repaying a bank credit, the rate of interest becomes the lower limit of
permissive profitability for the enterprise:
"The level of interest becomes the lower limit of permissible profitability".
As in an orthodox capitalist country, under the 'economic
reform' bank credit is normally advanced to an enterprise only against
(P. Bunich: op. cit.).
"Credit must be secured. . . . Only in special cases . . . are loans
issued by the State Bank without such security".
The rate of interest on credit was fixed at a high government
level in order that it could be utilised -- as in orthodox capitalist countries
- as an ‘economic lever' to influence the economy:
In Soviet revisionist propaganda of the 1960s, the means
of production were still being presented as 'publicly owned'. But the Statute
on the Socialist State Production Enterprise, adopted by the USSR Council
of Ministers on 4 October 1965, gives an enterprise rights of possession
over the production assets it holds:
(K. N. Plotnikov: 'Soviet Finance and Credit', in: 'The Soviet Planned
Economy'; Moscow; 1974; p. 221).
"The enterprise will exercise the rights of possession . . of the property
under its operational control".
Consequently, the acquisition of production assets by
an enterprise is described as 'purchase':
(Statute on the Socialist State Production Enterprise, in: M. E. Sharpe
(Ed.): 'Planning, Profit and Incentives in the USSR', Volume 2; New York;
1966; p. 291).
"The single approach to managing the economy is displayed . . .in granting
enterprises equal rights . . . to buy means of production".
That the terms 'rights of possession' and ‘purchase'
are not here being used in-exactly is shown by the fact that the Statute
gives the enterprise-the right to lease or sell the means of production
(P. G. Bunich: 'Methods of Planning and Stimulation', in: 'Soviet Economic
Reform: Progress and Problems'; Moscow; 1972; p. 36).
"The enterprise will exercise the rights of disposal of the property
under its operational control. . . . The enterprise may lease to other
enterprises and organisations buildings and structures, as well as production,
warehouse and other facilities assigned to it. . . .Surplus equipment .
. . may be sold by the enterprise to other enterprises and organisations.
. . .Sums obtained from the sale of material values representing fixed
assets will remain at the disposal of the enterprise".
The transfer of the ownership from the state to an enterprise
is not its transfer to an agency of the state, for the 'socialist state
production enterprise' is described as an
(Statute on the Socialist State Production Enterprise, in: M. E. Sharpe
(Ed.): op. cit., Volume 2; p. 291, 293, 295).
(Ibid.; p. 291).
"The state is not responsible for the obligations of the enterprise,
and the enterprise is not responsible for the obligations of the state".
Indeed, Soviet revisionist economists were at pains
to dismiss allegation that the enterprises are not really independent as
"groundless bourgeois propaganda":
(Ibid.; p. 291).
"Another bourgeois concept . . . denies the economic independence of
. . enterprises. It is not difficult to prove the groundlessness of this
Furthermore, the property rights of an enterprise
are vested in its director:
The director of a Soviet enterprise has thus been, since
the ‘economic reforms' of the 1960s, the effective owner of the means of
production (other than natural resources), and has full legal responsibility
for their operation:
(S. Khavina: 'In the Crooked Mirror of Bourgeois Theories', in: 'Ekonomicheskaya
Gazeta', No. 44, 1965).
"The rights of the enterprise that relate to its production and economic
activity are exercised by its director".
And since this responsibility is primarily to ensure
that the enterprise under his control makes the maximum possible rate of
profit, he, in Marx's words,
(Statute on the Socialist State Entrerprise, in: M. E. Sharpe (Ed.);
op. cit., Volume 2; p. 299).
"The industrial managers bear full responsibility for the production
sectors entrusted to them".
(A.N. Kosygin: op. cit.; p. 42).
" . becomes a capitalist. He functions as a capitalist, that is, as
capital personified and endowed with a consciousness and a will".
As a writer in the 'Harvard Business Review' expressed
it' in 1971:
(K. Marx: 'Capital', Volume 1; London; 1974; p. 151).
"Many Soviet managers would fit into any corporate hierarchy in the
United States and do exceptionally well".
In February 1971 the 'Institute of Management of the
National Economy' was opened in Moscow as the first Soviet 'business school'.
(Z. Katz: 'The Nachalik (Executive) Class in the USSR'; Cambridge (USA);
1073; p. 25).
(M. I. Goldman: 'More Heat in the Soviet Hothouse', in: 'Harvard Business
Review', Volume 49, No. 4; July/August 1971; p. 15).
The writer in the 'Harvard Business Review' already
"The Russians have again turned to the non-Communist world; they are
creating a network of business schools".
Under the 'economic reform', the director of a Soviet
industrial enterprise was appointed by and could may be dismissed by the
state - in practice, until quite recently, by a decision of the leadership
of the Communist Party:
Under the former socialist system, a worker could be
dismissed only for grave misconduct (usually involving a criminal offence
in connection with his work) and then only with the consent of the trade
union committee at the enterprise:
(M. I. Goldman: op. cit.; p. 15).
"Soviet labour legislation . . . permits the dismissal of a worker
by management only with the agreement of the factory and local trade union
committee and on grounds stipulated by law". ('Trudovoe Pravo: Entsiklopedichesky
Slovar'; Moscow; 1959; in: R. Conquest: (Ed.): 'Industrial Workers in the
USSR'; London; 1967; p. 19).
An important element of the 'economic reform' was to
give the managements of enterprises relatively unhindered powers to
dismiss workers as part of a rationalisation programme:
"Shop heads have the right to hire and fire".
Under the socialist state which formerly existed in
the Soviet Union, the working class was the collective owner of the
principal means of production.
(S. Kamenitser: 'The Experience of Industrial Management in the Soviet
Union'; Moscow; 1975; p. 40).
"The size of the wage fund will also be determined by the enterprise".
('Direct Contracts are expanding', in: 'Ekonomicheskaya Gazeta', No.
"From now on the enterprises will not be assigned the number of people
they are to employ. The introduction of comprehensive cost accounting will,
naturally, reveal surplus labour at some enterprises".
(L. Gatovsky: 'Unity of Plan and Cost Accounting', in: op, cit.).
The Secondary Accumulation of Capital
With the 'economic reform' of the 1960s, however,
as has been shown, the Soviet working class was expropriated of these
means of production, which became the property of a new class of Soviet
capitalists in the shape of the directors of industrial enterprises.
This process is essentially a repetition of that
which Marx, describing the original development of capitalist society out
of feudal society, called the primitive accumulation of capital:
"The capitalist system presupposes the complete separation of the labourers
from all property in the means by which they can realise their labour.
. . . The process, therefore, that clears the way for the capitalist system
can be none other than the process which takes away from the labourer the
possession of his means of production, a process that transforms, on the
one hand, the social means of subsistence and production into capital,
on the other, the immediate producers into wage-labourers. The so-called
primitive accumulation, therefore, is nothing else than a historical process
of divorcing the producer from the means of production".
We may call this repetition of the process of primitive
accumulation in the Soviet Union the secondary accumulation of capital.
Marx demonstrated that a worker who does not have access
to any means of production of his own has no way to live except to sell
his labour power, his capacity for work. Since, as has been said, the Soviet
workers have been expropriated of the means of production which they owned
under socialism, they now have no way to live except to sell their labour
power to the new class of Soviet capitalists:
(K. Marx: op. cit., Volume 1; p. 668).
"A working person constantly retains the right to dispose freely over
his labour power. He realises this right by concluding a labour agreement
with the enterprise".
The term 'dispose over' is clearly a euphemism for 'sell'.
(A.Sukhov: 'Labour Mobility and its Causes', in: 'Nauchnye Doklady
Vysshei Shkoly: Ekonomicheskie Nauki', No. 4, 1972).
The Value of Labour Power
Marx pointed out that the value of labour power is determined,
like that of any other commodity, by the amount of socially necessary labour
time required for its production, that is, by the value of the means of
subsistence conventionally - in a particular society at a particular time
- required for the maintenance of the worker and his dependents. Although
Soviet revisionist economists may deny that, in their society, labour power
is a commodity with a value, they admit that 'the expenditures of labour
on the cost of reproducing labour power' is 'assessed in value terms' which
are precisely equivalent to the value of labour power as analysed by Marx:
"The objective factor which determines this level (of wages -- WBB)
is the need to provide factory and office workers . . . with the means
of livelihood sufficient for the reproduction of labour power".
In a competitive labour market the price of labour power
(i.e., the level of wages) fluctuates like the price of any other commodity
around its value in accordance with the relation of supply to effective
demand on that market:
(Y. L. Mannevich: 'Wages Systems', in: 'The Soviet Planned Economy';
Moscow; 1974; p. 230).
"The cost of reproducing skilled labour power is the value assessment
of equivalents of the living means that form the fund for the compensation
of labour power".
(E. N. Zhiltsov: 'Concerning the Subject of the Economics of Higher
Education', in: 'Vestnik Moskovskogo Universiteta: Seriia Ekonomika', No.
The Price of Labour Power
"Wages will rise and fall (in a competitive labour market -- WBB) according
to the relation of supply and demand. . . . Within these variations, however,
the price of labour (power -- WBB) will be determined . . by the labour
time necessary to produce this commodity -- labour power".
Where and when there is a relative shortage of particular
kinds of labour power, enterprises compete with one another for this
(K. Marx: 'Wage-Labour and Capital', in: 'Selected Works'. Volume 1;
London; 1943; p. 262).
"Circumstances prompt new enterprises to entice personnel, especially
skilled personnel, from old enterprises. Such a practice is widespread".
In this competition for labour power, enterprises make
use of such attractions as bonuses and welfare services. Already in 1972
revisionist Soviet economists admitted that the high mobility of Soviet
workers was due to the competitive search for better conditions:
(E. G. Antosenkov: 'The Availability of Housing and Persinnel Turnover'.
in: 'Izvestia Sibirskogo Otdelenya Akademy Nauk SSSR: Seriia Obshchestvennykh
Nauk', No. 11, 1972).
"Manpower turnover is influenced by a number of factors that are basically
connected with with working conditions or with differences in levels of
material well-being. ….
The Soviet labour market was given concrete form in
1967 by the establishment of labour exchanges called 'Manpower Utilisation
Approximately 50% of all persons leaving their jobs at their own volition
do so for these reasons".
(L. Kuprienko: 'Influence of the Standard of Living on the Movement
of Labour Resources', in: 'Voprosy Ekonomiki', No. 3, 1972).
"In 1967 5.5 million persons moved from one city to another, 3.1 million
moved from villages to cities, and 1.5 million moved from cities to villages.
In addition, several million persons moved from one village to another".
(V. Perevedenstev: 'Migration of the Population and the Utilisation
of Labour Resources', in: 'Voprosy Ekonomiki', No. 9, 1970).
"In 1967 Republic Manpower Utilisation Agencies were established. They
are responsible for job placement for workers and employees".
Marx held that in a capitalist society real wage levels
tend to rise with the development of the productive forces. The aim of
the capitalist class, however, is to try to ensure that, if real wages
grow, they grow more slowly than the growth of the productivity of labour.
In these conditions, the proportion of national income accruing to the
working class falls despite the rise in real wages, i.e., exploitation
increases. This is naturally also the policy of the Soviet capitalist class:
(U. Korshagin: 'Utilisation of Manpower Resources in the New Five-Year
Plan', in: 'Planovoe Khoziaistvo', No. 4, 1971).
"The priority growth of labour productivity over the growth in wages
must be strictly observed".
This aim was achieved during the period of the 9th Five-Year
Plan' (1971-75), when average wages rose by 20% while the average productivity
of labour rose by 23%.
('Soviet Economy Forges Ahead'; Moscow; 1973; p. 18-19).
(A. N. Kosygin: 'Guidelines op cit.; p. 13, 18).
Naturally, therefore, most revisionist Soviet economists
agreed that the one aspect of 'centralised economic planning' which should
be retained is State control of wage levels:
"Centrally established basic rates and salaries constitute,
as before, the basis of wages. . . .
The managerial and higher technical personnel of a Soviet
industrial enterprise receive monthly salaries. The salary of an enterprise
director was in 1974 up to 7.2 times the basic wage rate of the average
shop floor worker:
State regulation of wages is necessary.
The new system of economic stimulation of production preserves the
state regulation of wages".
(A.Sukharevsky: 'The Enterprise and Material Stimulation'; op. cit.).
"A foreman's salary in a top-category section is 10-20% higher than
the basic wage rate for a highly-qualified worker. Shop superintendents
in the higher group are paid more than twice as much as a foreman in the
lowest group. The salary paid to an enterprise director is never more than
treble the salary of a foreman".
However, the wage/salary differential between shop floor
workers and management personnel formed only a minor part of the actual
income differential between these categories; as will be shown, the greater
part of the latter accrued from differentials in 'bonus payments'.
Under the socialist system which formerly existed in
the Soviet Union, the prices of commodities were fixed by the state.
Although in fixing the price of a commodity, its value was taken into account,
the actual price was determined in accordance with the state's assessment
of social requirements. Thus, over a considerable period of time, the price
of vodka was fixed above its value in order to discourage its consumption;
on the other hand, the price of clothing was fixed below its value
to assist the working people in the purchase of clothes. As a result, vodka
enterprises made an above-average rate of profit, while clothing enterprises
made a below-average rate of profit.
(Y. L. Manevich: 'Wages Systems'; op, cit.; in: p. 251-52).
But the rate of profit could become a reality, could
function as the regulator of production, only if this 'voluntaristic' method
of fixing prices were abandoned, and prices were brought into line with
values. In the propaganda campaign which preceded the 'economic reform',
therefore, the demand was put forward that prices should be brought
into line with values:
"Prices must . . . reflect the socially necessary outlay of labour".
The new 'State Committee for Prices' established under
the 'economic reform' was charged with elaborating a new system of prices,
('Programme of the Communist Party of the Soviet Union'; Moscow; 1961;
". basing its decisions on the need to bring prices as close as possible
to levels of socially necessary outlays of labour".
The 'price reform' was put into force first for wholesale
prices on 1 July 1967, resulting the raising of wholesale prices by an
average of 8% for industry as a whole, and by an average of 15% for heavy
(A.N. Kosygin: 'On Improving Industrial Management’; op. cit.; p. 30).
(L. Maizenberg: 'Improvements in the Wholesale Price System', in: 'Voprosy
Ekonomiki', No., 6, 1970).
Some wholesale prices were, in fact, raised by large
amounts -- e.g., that of coal by 78%.
(V. Sitnin: 'Wholesale Prices: Results and Tasks', in: 'Ekonomicheskaya
Gazeta', No. 6, 1968).
The aim of this price reform was stated to be that
of creating conditions under which each ‘normally functioning enterprise'
could function profitably':
"The wholesale price reform . . . was intended to create conditions
for profitable work in all branches of industry and each normally functioning
In fact, the wholesale price reform brought about a
rise in industrial profit considerably higher than had been anticipated:
(V. Sitnin: op. cit.; p. 26).
"The planning of the new wholesale prices . . . was based on the projection
that industry-wide profitability would be approximately 15%. In fact, however,
in 1968 it proved to be 20.1%, and in the case of enterprises operating
under the new system of planning and economic incentive it was 22.9%".
But the wholesale price reform was only a first step
in the 'price reform', the fundamental aim of which was that prices should
fluctuate according to the varying relation between supply and demand on
the market. The next step, therefore, was to give enterprises the power
to fix prices themselves:
(I.Sher: 'Long-term Credit for Industry', in: 'Voprosy Ekonomiki',
No. 6, 1970).
"Measures to increase the flexibility . . . of price formation have
also been adopted recently. . According to these methods, enterprises themselves
change prices of their output".
The difficulty of reconciling this conception with the
fiction that centralised economic planning, including price control, was
being maintained, was solved by presenting the central 'planning organs'
as issuing "price norms" while leaving enterprises to fix 'concrete
(P. G. Bunich: 'Methods of Planning and Stimulation', in: op. cit.;
"It is essential to incorporate . . . the centralised confirmation
of base prices and their norms . . . and the establishment of concrete
prices by enterprises or associations themselves".
Naturally, these 'concrete prices' often departed fundamentally
from the ‘price norms' issued by the central 'planning organs':
In order that profit could function as the regulator
of social production under conditions where production is planned by the
enterprises themselves, each enterprise must retain sufficient of the profit
it makes to enable adequate material incentives to be drawn from it to
influence the directing personnel of the enterprise responsible for making
(A. Komin: 'Problems in the Methodology and Practice of Planned Price
Formation', in: 'Planovoe Kkoziaistvo', No. 9, 1972).
"It is necessary to leave to the enterprises more of their profits".
In consequence, the average proportion
of an enterprise's profit retained by enterprises rose between 1966 and
1969 as follows:
(a.N. Kosygin: 'On Improving Industrial Management . . .'; op. cit.).
(N. Y. Drogichinsky: op. cit.).
Under socialism wages were, as far as was possible,
proportional to the quantity and quality of work performed, while other
material incentives were based on fulfilment or over-fulfilment of the
The abolition of centralised economic planning and
the establishment of the profit motive as the regulator of social production
required the replacement of this system of material incentives to the personnel
of an enterprise by one based on the rate of profit made by the enterprise
and drawn from that profit:
"It is necessary to introduce a system under which the enterprise's
opportunities for increasing the remuneration of its workers and employees
would be determined, above all, by . . . greater profitability of production.
. . . The enterprises must have at their disposal - in addition to the
wage fund -- their own source of rewarding personnel for individual achievements
and high overall results of enterprise operations.
In the four years from 1966 to 1969, the average size
of the material incentive funds of enterprises rose four times.
This source must be a part of the profit obtained from the enterprise'.
(A. N. Kosygin: 'On Improving Industrial Management’; op. Cit; p. 25-26).
"Under the new conditions, the stimulating role of profit rises considerably.
. . .The material incentive funds . . . will be created from profits. The
funds must be considerably larger than the previously existing enterprise
fund . . . . The greater the profit obtained from the enterprise, the higher
will be the allotments to the incentive funds and the fund for the development
(V. Garbuzov: 'Finances and Economic Stimuli', in: 'Ekonomicheskaya
Gazeta', No. 41, 1965).
(N. Y. Drogichinsky: 'The.Economic Reform in Action', in: 'Soviet Economic
Reform: 'Progress and Problems'; Moscow; 1972; p. 207).
As has been shown, under the 'economic reform' profit
became the motive and regulator of social production. But, seeking to present
themselves at this time as continuing to 'build socialism', the Soviet
revisionists described this profit as:
" . . . socialist profit".
Although denying that 'socialist profit' arises from
exploitation of the working people, the definition of 'profit' given by
revisionist Soviet economists since the 'economic reform':
(E. G. Liberman: 'The Plan, Direct Ties and Profitability'; op. cit.).
"Profit is formed directly from the difference between the price and
cost of production".
-- is virtually identical with that given by Marx for
surplus value (profit in the broad sense) in an orthodox capitalist society:
(L. Gatovsky: 'The Role of Profit in a Socialist Economy'; op. cit.).
"Surplus value is the difference between the value of the product and
the value of the elements consumed in the formation of that product".
So, tacitly accepting that 'socialist profit' does not
differ in essence from profit in orthodox capitalist countries, revisionist
Soviet economists fell back on the argument that there is nothing wrong
in principle with profit in orthodox capitalist countries; what is wrong
- and what distinguishes it from 'socialist profit' is -- they say, its
(K. Marx: 'Capital', Volume 1; London; 1974; p. 201).
"The evil of capitalism lies not the drive for profit, but in its distribution".
This argument will be examined in the next two sections.
(V. Belkin & I. Berman: 'The Independence of the Enterprise and
Economic Stimuli', in: 'Izvestia', 4 December 1964).
"Under socialism profit is distributed in the interests of the people".
(L. Gatovsky: 'The Role of Profit in a Socialist Economy'; op. cit.).
The Distribution of 'Socialist Profit'
If profit was to be in reality the motive and regulator
of Soviet production, then the lion's share of the bonuses paid out of
an enterprise's ‘material incentive fund' had to go to those personnel
of an enterprise whose economic decisions primarily determined the rate
of profit made by the enterprise -- that is, to the personnel of the
"We must raise the role and responsibility of the heads of enterprises
. . . for the fulfilment of profit plans".
The size of bonuses paid to managerial personnel is
determined outside the enterprise, by the state:
(G. Kosiachenko: 'Important Condition for the Improvement of Planning';
"Bonuses to directors of enterprises, their assistants, chief engineers,
heads of planning departments, chief bookkeepers and heads of technical
control departments are approved by the chief executive of the higher agency",
the prime criterion for determining the size of the
bonuses paid to managerial personnel being the rate of profit made
by the enterprise:
(Y. L. Manevich: 'Wages Systems'; op. cit.)
"The fulfilment of profit plans . . . should be one of the criteria
for granting bonuses to certain categories of managerial personnel".
On the other hand, the size of the bonuses paid to the
workers of an enterprise is determined offically by the director.:
(G. Kosiachenko: op. cit.).
"The main indicators for awarding bonuses to managerial workers at enterprises
are fulfilment of the plan for sales and an increase in profitability".
(S. Kamenitser: op. cit.; p. 134).
"Bonuses to directors of enterprise . . . are approved by the chief
executive of the higher agency, and those given to all other employees
by the director of the enterprise".
The size of the bonuses paid to the workers of
an enterprise is very different from size of those paid to managerial
(Y. L. Manevich: 'Wages Systems'; op. cit.).
Soviet official statistics show that in 1966 management
personnel received 43.9% of the material incentive fund, while workers
(N. Y. Drogichinsky: op. cit.; p. 194).
But about this time the personnel engaged in industry
was classified as
It follows that 1% of the personnel received 12.3% of
the bonuses if they were in management, and 0.5% if they were workers.
Thus, on the average each member of the management received almost twenty-five
times the bonus received by each worker.
(M. Katz: 'Patterns of Social Stratification in the USSR'; Cambridge
(USA); 1972; p. 78).
In fact, the distribution of 'socialist profit' under
the Soviet ‘economic reform' differs in no way from the distribution of
profit in orthodox capitalist societies where profit-sharing schemes are
The 'economic reform' required each enterprise to maximise
its profits and minimise its production costs. But this aim conflicts with
the social need to minimise the environmental pollution arising out of
"The implementation of pollution control programmes leads to the worsening
of the cost-accounting performance of enterprises".
As a result, since the ‘economic reform' environmental
pollution in the Soviet Union has reached dangerous levels, as in orthodox
(N. Fedorenko & K. Gofman: 'Problems of Optimisation of the Planning
and Control of the Environment', in: 'Problemy Ekonomiki', No. 12, 1972).
"In the Soviet Union . . . unpurified gases are discharged into the
atmosphere, unpurified waters are discharged into rivers and water basins,
there is soil erosion, etc.".
Soviet environmentalists agree that one of the two chief
causes of atmospheric pollution is motor transport:
(G. Khromushin: 'Problems of Ecology'; in 'Vorposy Ekonomiki", No.
"For all the variety of causes behind the deterioration of the environment
in the United States and the Soviet Union, both these countries are now
faced with the practical need to check this process. .
The harm caused to bodies of water by effluents from pulp-and-water,
chemical fibre, and other factories is well-known. Every day they discard
thousands of tons of polluted water into rivers, lakes and oceans… the
damage caused by these effluents is incalculable".
(K. Ananichev: 'Environment: International Aspects'; Moscow; 1976;
p. 118, 123).
"The chief sources of air pollution today are the power industry and
and that the difficulty in producing a non-noxious motor
vehicle is economic, not technical:
(K. Ananichev: ibid.; p. 120).
"Of course, it is possible in principle to develop a motor vehicle
which does not emit poisonous or harmful exhaust fumes. This, however,
would be . . . very costly".
They proposed, therefore, that
(K. Ananichev: ibid.; p. 97).
". . . the number of motor vehicles be reduced by withdrawing from
use a tremendous number of private cars".
But, in fact, exactly the opposite occurred. The 'Five-Year
Plan' for 1971-75 envisaged:
(K. Ananichev: ibid.; p. 97-98).
". . . a fourfold increase in car production. This tremendous increase
in the number of motor vehicles poses the threat of large-scale air pollution".
In Stalin's view the national policy of the Communist
Party of the Soviet Union should include assistance from the Russian Federation
to the periphery:
(K. Ananichev: ibid,; p. 121).
". . . to make it possible for the backward peoples to catch up with
central Russia in political, cultural and economic respects".
In fact, however, differences in the economic, social
and cultural levels between the Union Republics - as shown in official
statistics of industrial productivity, per capita national income, per
capita living space, etc. increased after the 'economic reform'.
(J. V. Stalin: Report on the Immediate Tasks of the Party in the National
Question, 10th Congress of the RCP, in: 'Works', Volume 5; Moscow; 1953;
"I understand our policy in the national question to be a policy of
concessions to non-Russians. . . . That policy is undoubtedly correct".
(J. V. Stalin: Reply to the Discussion on the Central Committee's Organisational
Report, 12th Congress of the RCP, in: ibid; p. 235).
('Narodnoe Khoziaistvo SSSR v 1960 Godu'; Moscow; 1961;
'Narodnoe Khoziaistvo SSSR v 1970 Godu'; Moscow; 1971;
V. N. Bandera & Z. L. Melnyk: 'The Soviet Economy in Regional Perspective';
New York; 1973).
In economically backward Uzbekistan, for example,
cotton growing for ‘export' to the industrialised Union Republics was made
the basis of the Uzbek economy:
"In developing the agriculture of Uzbekistan . . . . . . . we need
an agricultural complex on a cotton basis".
This policy led to an actual decline in food production
per capita in Uzbekistan:
(N. I. Mukhitdinov, in: 'Materialy Obedinennoi Nauchnoi Sessii po khlopkovodstva,
sostoiasheisia v. g. Taskkente 15-21 Oktiabria 1957 g; Taskhkent; 1958).
Food Production in Uzbekistan (kilograms per capita)
Potatoes: 24.8 16.1
(V. S. Nekhai: 'The Production of Foodstuffs and the Level of Consumption
in Relation to Population', in: A. M. Aminov (Ed.): 'Razvitie i Sovershenstvovanie
Sotsialisticheskikh Proizvodstvennykh Otnoshenii v Period Stroitelstva
Kommunizma'; Taskhkent; 1968).
In the days of socialism in the Soviet Union, investment
was allocated in a planned way to enterprises by the state without charge.
Since the 'economic reform, however, enterprises have to buy new means
of production and only in exceptional cases have investment funds been
provided for this purpose by the state:
"At the present time . . . only in exceptional cases will the means
(of investment -- WBB) come from the budget".
By 1970 - 78.8% of total investment was coming from
the enterprises’ own funds
(V. Batyrev: 'The Economic Reform and the Increasing Role of Credit',
in: 'Kommunist', No. 2, 1966).
(I. Shur: 'Long-term Credit in Industry'; op. cit.).
The establishment of 'production development funds'
in enterprises brought about a large increase in the enterprises' funds
available for investment: from 120 million rubles in 1964 to 4,000 million
rubles in 1967 -- an increase
" of more than 33 times."
Any investment made by an enterprise over and above
the funds available in its production development fund must normally be
obtained in the form of a bank credit, repayable with interest. But by
1974 only 3.3% of investment was being effected through bank credits, as
a result of:
(A. N. Kosygin: 'On Improving Industrial Management op cit.)
"Production development funds come from profits and the sale of ‘superfluous'
means of production.
(B. Sukharevsky: 'New Elements in Economic Inentives', in: 'Voprosy
Ekonomiki', No. 10, 1965).
". . the high profitability of other majority of existing enterprises,
which makes it possible to make capital investments from their own resources".
In determining its investment policy, an enterprise
is, of course, guided by its assessment of what will maximise its rate
(V. N. Kulikov: 'Some Problems of Long-Term Crediting of Centralised
Capital Investments;', in: 'Finansy SSSR', No. 5, 1974).
"In making investments . . ., an enterprise will choose the course
that provides for the biggest rise in profitability".
Despite the great increase in the size of enterprises'
funds available for investment since the 'economic reform', the growth
rate of investment has declined markedly:
(T. S. Khachaturov: 'The Economic Reform and Efficiency of Investments',
in: 'Soviet Economic Reform: Progress and Problems'; Moscow; 1972; p. 156).
42% ('projected') 25%
('Soviet Economy Forges Ahead'; Moscow; 1973; p. 16. A.N., Kosygin:
'Guidelines op. C it.; p. 11, 69).
This, of course, is in line with the practice in orthodox
capitalist countries in conditions of monopoly, where maximum profitability
frequently accrues from continuing to operate means of production after
they have become obsolescent.
Rationalisation and Redundancy
As in an orthodox capitalist country, the search for
maximum profitability brought about a rise in the productivity of labour,
" . . . the rationalisation of production".
and widespread redundancy. Enterprises:
(S. Starostin & G. Emdin: 'The Five-Year Plan and the Soviet Way
of Life', in: 'Planovoe Khoziaistvo', No. 6, 1972).
"discontinued the employment of superfluous personnel".
From 1964 on, 'surpluses of labour' -- a euphemism for
unemployment were being reported from various regions of the country:
(A.N. Kosygin: 'On Improving Industrial Management’; op. cit.; p. 28).
"The replacement of workers by machinery is quite striking".
(V. I. Mayevsky: 'Socialist Industry: The Basis of the Socialist Economy',
in: 'The Soviet Planned Economy'; Moscow; 1974; p. 33).
"In certain regions of the country, particularly in small towns, surpluses
of labour have appeared".
This unemployment occurred particularly among young
workers. In 1964 two-thirds of school-leavers in Rostov district and more
than half in Kursk district failed to find jobs within the 'planned period'.
('Trud.', 3 November 1964).
('Pravda', 23 July 1965).
This situation was reflected in the establishment
in 1966 of a 'Youth Employment Service',
('Pravda', 6 February 1966).
with unemployment, in 1930:
"The solution of an urgent problem of long standing -- the problem
of material support for released personnel -- is extremely important".
and in a campaign to persuade women workers to cease
working on the grounds that 'a woman's place is in the home':
Marx showed that the economic laws of capitalism lead
to the concentration of capital, of means of production, in increasing
amounts in the hands of individual capitalists.
(E. Manevich: 'Ways of Improving the Utilisation of Manpower'; op.
The proportion of Soviet enterprises with a gross
output in excess of 500,000 rubles rose from 61.8% in 1960, to 70.8% in
1963., to 74.8% in 1963.
('Soviet Economy Forges Ahead'; Moscow; 1973; p. 176).
Already by 1967 concentration of capital had reached
a much higher level than-in the most advanced orthodox capitalist countries:
Proportion of enterprises employing more than 500 workers:
USSR West Germany
Britain USA France
1. 5% 1.4%
Average Number of Workers per Enterprise:
USSR West Germany USA
Britain France Japan
(I. Kvasha: 'Concentration of Production and Small-Scale Industry', in:
'Voprosy Ekonomiki', No. 5, 1967).
Soviet economists admit that smaller enterprises in the Soviet Union
suffer from the same disadvantages described by Marx in the case of orthodox
"Small enterprises are faced with difficulties. Since their economic
stimulation funds are not big, they are not always able to build cultural
and service establishments and houses and also to undertake measures for
the development of production".
Marx points out that the economic laws of capitalism
lead to the centralisation of capital, of means of production, that is,
their concentration in the hands of a decreasing number of capitalists,
and the process of centralisation of capital is stimulated by the role
of the banks. While relatively unprofitable enterprises could be put into
liquidation under 'bankruptcy laws' which were similar to those in orthodox
capitalist countries, most such enterprises were 'reorganised' by merging
them with one or more other enterprises:
(N. Y. Drogichinsky: op. cit.; p. 217).
"Small enterprises are being enlarged, reorganised into big ones".
(A.M. Rumyantsev: 'Management of the Soviet Economy Today: Basic Principles';
op. cit.; p. 17).
Soviet Monopoly Capitalism
Lenin revealed that, as a result of the operation of
economic laws inherent in the capitalist economy, competitive capitalism
gave way, at a certain stage of its development, to monopoly capitalism
or imperialism, in which a relatively small number of capitalist
groups with monopolistic power dominate the economic life of society. In
the Soviet Union such large groupings with monopolistic power are called
"The systematic establishment of production associations is
a necessary requisite for improving the organisation of production and
management. . . . The need for setting up production associations (combined
works) was emphasised in the 24th Congress decisions".
By 1973 some 5,000 'production associations' had been
(N. Y. Drogichinsky: op. cit.; p. 221-22).
(B.Gubin: 'Raising the Efficiency of Socialist Economic Management';
Moscow; 1973; p. 86).
Like monopolies in orthodox capitalist countries, Soviet 'production
associations' could take the form of 'trusts' (i.e., cartels in
which the enterprises within the 'production association' retain their
managerial independence) or of 'firms' and ’combines' (in
which the enterprises within the 'production association' have a single
managerial apparatus, with the smaller enterprises functioning as subsidiaries:
"Associations . . . may include enterprises which fully preserve their
independence or enterprises which have been turned into subsidiaries".
Since the 'economic reform', the average rate of profit
in Soviet enterprises has increased from 16.7% in 1961-65 to 21.3% in 1966-70.
(S. Kamenitser: op. cit.; p. 37).
'Production associations' have, of course, great advantages in profit-making
over even large individual enterprises. Most of them have their own design,
research and development divisions and are financially completely self-sufficient:
"A production association headed by a big enterprise offers a number
(N. Y. Drogichinsky: op. cit.; p. 220).
"Large-scale production amalgamations embracing not only enterprises
but also design and research and development organisations have everything
they need for a rapid introduction of new developments in science and technology".
('Soviet Economy Forges Ahead'; Moscow; 1973; p. 234).
(N. Y. Drogichinsdy: op. cit.;.p. 208).
and the average profit per worker has increased as
In the period 1971-75 total profit amounted to:
1965: 1,485 rubles
1966: 1,773 rubles
1967: 2,027 rubles
1968: 2,217 rubles
1969: 2,549 rubles
(N. Y. Drogichinsdky: op.cit.,; p. 204).
". . . nearly 500,000 million rubles",
an increase over the period 1966-70 of:
(A.N. Kosygin: 'Guidelines . . .'; op. cit.; p. 41).
" . . . 50%".
The formation of 'production associations' has greatly
accelerated rationalisation and its attendant 'releases of surplus labour':
(A. N. Kosygin: 'Guidelines . . .' op. cit. );
"Great savings were effected by the organisation of associations in
the oil-refining industry. As a result of setting up the 'Kuibyshevneft'
association, the managerial offices of 7 oil-drilling enterprises, 11 oilfields
and 51 oil-producing and drilling sections were abolished. This enabled
the release of over 1,000 workers and a saving of 1.3 million rubles in
the annual remuneration fund".
One of the principal advantages possessed by a monopoly
is its ability to maintain its prices (and so its rate of profit) at a
higher level than would be possible under conditions of competition. Thus,
Soviet economists were compelled to admit that the formation of monopolistic
production associations' led to a tendency for prices to rise, i,e., a
tendency to inflation:
(B.Gubin: 'Raising the Efficiency of Socialist Economic Management';
Moscow; 1973; p. 108).
"Our experience points to the existence of a dangerous trend towards
arbitrary price rises". (L. Maizenberg: op. cit.).
And, as in orthodox capitalist countries, Soviet monopolies
do not hesitate to use their control of the production of a particular
commodity to create artificial shortages for the purpose of increasing
their prices and profits:
"Certain forms of the existing system of distribution . . . frequently
lead to an artificial shortage".
As a result of all these factors, Soviet monopolies
succeeded in significantly raising their rates of profit during the 1960s:
In the 1970's Soviet revisionist economists and politicians
were still maintaining that, despite the 'economic reforms', Soviet society
continued to operate on the principle of
(N. Fedorenko: 'Current Tasks of Economic Science', in: 'Voprosy Ekonomiki',
No. 2, 1974).
"With coffee prices up five-fold, suppliers released rare stocks into
('Coffee in Moscow', in: 'Guardian', 2 March 1978).
". . . the distribution -of income according to the quantity and quality
of work done",
although it was admitted that this principle
(Y. L. Manevich: 'Wages Systems'; op. cit.).
"operates . . . with many deviations".
As has been shown, these 'deviations' included the receipt
by managerial personnel in Soviet industry of bonuses which were up
to 100 times those received by shop floor workers. Such huge differentials
can, by no stretch of the imagination, be reconciled with the principle
of 'distribution of income according to quantity and quality of work performed'.
They represent, in Marxist-Leninist terminology, the exploitation of
the working class.
Marx made it clear that, by reason of the anarchic character
of production in a capitalist society and the fact that, in such a society,
the workers receive in wages the equivalent of only as part of the value
they produce, every capitalist society faces a market problem. By
1965 Soviet revisionist economists were admitting that the Soviet economy
was facing such a market problem:
(Y. L. Manevich: ibid.; p. 229).
"The market problem exists not only for consumer goods but also for
means of production". ('Pravda', 23 June 1965).
One attempt to alleviate the Soviet market problem has
been the great expansion of credit sales:
"Credit sales . . . are acquiring more and more significance for the
development of retail trade in our country. . . . The share of goods sold
on an installment basis is increasing: from 1.8% in 1960 to 5.7% in 1967".
This market problem brings about pressure to find markets
abroad for goods which cannot be sold at home:
(V. Ilin & B. Koriagin: 'The Sale of Goods to the Public on Credit',
in: 'Nauchnye Vysshei Doklady Shkoly: Ekonomicheskie Nauki', No. 7, 1969).
"The growth of production leads to the greater requirement for foreign
In 1967 fuel, raw and other materials, and foodstuffs
constituted 62.5% of Soviet exports.
(M. Senin: 'Socialist Integration'; Moscow; 1973; p. 119).
"We intend to expand the country's export potential systematically.
The problem arises of setting up a number of export-oriented industries
to meet the specific requirements of foreign markets".
(A.N. Kosygin: 'Guidelines . . .'; op. cit.; p. 45).
(M. Senin: op. cit.; p. 99).
But the production of such commodities for export
is significantly less profitable than the production of manufactured goods:
"In the export field the operation of the extractive industry is less
profitable than that of manufacturing industry".
Naturally, therefore, Soviet revisionist economists
urged that steps be taken to change the pattern of Soviet exports in the
direction of manufactured goods:
The Communist Party of the Soviet Union, founded as
a political party representing the interests of the working class, has
been said since 1961 to represent the interests of 'the entire Soviet people':
(M. Senin: op. cit.; p. 243).
"Our Marxist-Leninist Party, which arose as a party of the working
class, has become the Party of the entire people".
But in a society which contains classes with antagonistic
interests -and it has been shown that the Soviet Union had become such
a society by the 1960s -- it is impossible for a single party to represent
the interests of the entire people' and any claim to do so must be dismissed
as mere demagogy.
(N. S. Khrushchev: Report on the Programme of the Communist Party of
the Soviet Union, 22nd Congress, CPSU; London; 1961; p. 90).
And where a capitalist class exists, as in the Soviet
Union since the 1960s, a political party which does not represent specifically
the interests of the working class must represent the interests of the
Soviet capitalist class.
Consequently, since the 'economic reform' the Communist
Party of the Soviet Union represented the interests of the Soviet capitalist
The Character of the Soviet State
According to Marxism-Leninism, a state is essentially
a machinery of force by which one social class rules over the rest of the
people. The Soviet State established in Russia by the revolution of November
1917 was officially described as a machinery of force in the hands of the
working class, as the dictatorship of the working class'.
In 1961, however, the leaders of the CPSU declared
that the Soviet state was no longer the dictatorship of the proletariat,
but had become an organ representing the interests of 'the entire people':
"In our country, for the first time in history, a State has taken shape
which is not a dictatorship of any one class, but an instrument of society
as a whole, of the entire people. . . . The dictatorship of the proletariat
is no longer necessary".
But Marxism-Leninism teaches us that in a society which
contains antagonistic classes -- and, as has been demonstrated, Soviet
society has been such a society since the 1960s -- the state can only be
the machinery of rule of the dominant social class, and any claim that
it represents the interests of 'the entire people' must be dismissed as
(N. S. Khrushchev: Report on the Programme of the Communist Party .
. . op. cit.; p. 57, 58).
Since the Soviet revisionist leaders admit that the
Soviet state is no longer the dictatorship of the working class, it
must be the machinery of rule of the new capitalist class.
But Lenin demonstrated that monopoly capitalism --
such as came to exist in the Soviet Union after the 'economic reform' --
inevitably develops into state-monopoly capitalism, in which the
state ceases to be the machinery of rule of the capitalist class as a whole
and becomes that of the most powerful groups of monopoly capitalists, and
in which the intervention of the state extends into every facet of social
"In . . . state-monopoly capitalism the monstrous oppression of the
mass of the toilers by the state -- which is becoming merged more and more
with the all-powerful capitalist combines -- is becoming ever more monstrous".
Thus, the Soviet revisionist Prime Minister Aleksei
Kosygin described in 1965 how the industrial Ministries would 'rely on'
the trusts, firms and combines in their respective fields, and would 'hand
over' to them many operative functions:
(V. I. Lenin: Preface to the First Edition of 'The State and Revolution',
in: 'Selected Works', Volume 7; London; 1946; p. 5).
"Imperialism -- . . . the era of the transformation of monopoly capitalism
into state-monopoly capitalism -- has particularly witnessed an unprecedented
strengthening of the 'state machine' and an unprecedented growth of its
bureaucratic and military apparatus".
(V. I. Lenin: 'The State and Revolution;, in: ibid.; p. 32).
"Within industries a network of cost-accounting amalgamations will
exercise direct management over their respective enterprises. The Ministries
will rely in their work on the cost accounting amalgamations, handing over
many operative functioned to them".
Furthermore, the Soviet state which came into being
through the 'economic reform' of the 1960s, was not of the 'parliamentary
democratic' type such as exists in Britain at the present time.
(A.N. Kosygin: 'On Improving Industrial Management op. cit.).
Within 'parliamentary democracy' the legal right
exists for the formation of political parties with the declared aim of
transforming the structure of society; and the legal right exists for such
parties to hold public meetings and demonstrations, to publish journals
and leaflets, to contest elections, and so on.
But in the Soviet society of the 1960s, 1970s and
early 1980s such rights did not exist. The Communist Party of the Soviet
Union representing, as has been shown, the interests of Soviet monopoly
capital was the sole legal political party and functioned as 'the leading
and guiding force of Soviet society':
"The period of full-scale communist construction is characterised by
a further enhancement of the role and importance of the Communist Party
as the leading and guiding force of Soviet society".
Consequently, the Soviet state of the 1960s, 1970s and
early 1980s was despite its false trappings of red flags -- a fascist-type
state in which the Communist Party functioned essentially as did the
fascist parties in Fascist Italy, Nazi Germany and Falangist Spain.
The theses that the Communist Party of the Soviet Union remained a Marxist-Leninist
Party and the Soviet Union remained a socialist society until the mid-1980s
cannot be reconciled with the known facts.
(Programme of the Communist Party of the Soviet Union; Moscow; 1961;
W. B. Bland,
For the Communist League.
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