From International Socialism (1st series), No.80, July/August 1977, pp.30-32.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Political Undercurrents in Soviet Economic Debates
WHEN Joseph Stalin died in 1953, he bequeathed to his heirs a massive and growing set of problems. The form of economy he initiated in 1929 with the first Five Year Plan proved to be enormously irrational. None of Stalin’s successors has managed to master its contradictions.
It is characteristic of capitalist economies that, on the one hand, they expand the productive forces of society to a previously undreamed extent while, on the other, they are incapable of employing the massive resources rationally. Thus they become ever more incapable of further development, ever less able to satisfy the needs they themselves generate. The result – as we see in Britain and the USA, for instance – is growing economic stagnation, growing waste. So too in Russia.
The Russian economic growth rate has been steadily falling. Yet at the same time, the proportion of resources devoted to investment has been rising. The economy moves in fits and starts, indeed (as a number of Russian and East European economists have noted) its development is at least as irregular and unpredictable as an ‘orthodox’ western capitalist economy. Waste production is an ever more pressing problem: from 1950 to 1965 Russian stocks of unsold consumer goods grew three and a half times, to reach the impressive sum of almost 35 billion roubles’ worth. The population had the money to buy them, but the quality was so poor no one could touch them. More and more machinery likewise remained in mothballs, being either unsuitable for use altogether or in the wrong place. The building of new factories, houses, and the like takes three times as long in Russia as in the west. The machinery in Russian industry is out of date, prone to breakdown, difficult to replace. 27 per cent of gross capital investment in material production is absorbed by repairs to existing machinery! A third of Russia’s metal cutting machine tools at any time are out of action, being mended. The bureaucratic ‘planning’ system, inherited from Stalin, creates positive disincentives to innovate, to seek more efficient methods of production, to match output to the needs of the population and of the rest of industry.
In the agricultural sector, Russia is in permanent crisis. Despite the vastness of its agricultural land, and despite the large agricultural labour force, the Russian government cannot be sure, from one year to the next, that it can feed its population. 27 per cent of the active Russian population is engaged in agriculture and extractive industries, yet it cannot feed itself, while a much smaller agricultural labour force in the USA produces massive surpluses ...
In the late 1950s and 1960s, in the wake of Kruschev’s revelations about Stalin’s ‘excesses’ and the intellectual ‘thaw’ that developed in Russia, a whole school of Russian economists began to analyse what was wrong with the Russian economy, and to make proposals for reform. Some went further than others in their criticisms, but collectively they developed an account of the way the Russian economy was functioning that challenged almost every one of the lies that communists had been fed for a generation. For a time, the reform economists were given a degree of encouragement by the Russian government: the problems to which the economists addressed themselves were patently obvious to everyone, and the bureaucracy was looking for ways to overcome the stagnation and irrationalities of their own system. Some rather halting steps towards reform of the planning system were taken, though only briefly. More recently, and especially since the Russian invasion of Czechoslovakia, the reform process has been largely stopped.
In the Russian context, reform threatens the very existence of the system. The Russian economy’s central dynamic is provided by military competition with the west, under the direction of a rigidly centralised state. The burden of that competition is tremendous: in order to match American firepower, and to have the military means also to threaten its Chinese rivals and control its East European satellites, the Russian state must invest proportionately twice as many resources in military production as the USA. Those resources have to be extracted from the Russian population, and that can only be achieved by ruthlessly subordinating every part of the economy to that central purpose. Only a highly centralised, rigidly stratified, bureaucratic state can direct the process.
But that very state, the modern Leviathan, is itself more and more of an impediment to the further development of Russian society’s productive forces. As the reform economists whom Moshe Lewin discusses so ably in this book have shown, over and over again, the Russian state is strangling Russian society. The arbitrariness of its edicts, its suppression of social initiative, the manifold ways in which it crushes idealism and diminishes responsibility, all combine to restrict the growth of productivity and foster irrationality. Modern Russia presents the world with the most complete proof of the bankruptcy of ‘state socialism’ as a road to social development.
The reform economists argued that if the irrationalities of the Russian economy were to be overcome, the bureaucratic state apparatus must be dismantled. In place of the detailed system of commands from the centre, enterprises and farms must be given much greater autonomy. The ‘plan’ must be, not the master of society, but its servant All sectors of Russian society, managers, .industrial and agricultural workers, intellectuals, must be given much greater freedom to make decisions, to discuss and formulate strategies for development, must be given proper incentives to raise productivity. ‘Reform’ in the economy must mean ‘reform’ in politics too: above all, ‘reform’ demands democratisation.
Inevitably, the reformers made criticisms and raised demands that threatened the interests of the existing power-holders. But they did not only threaten the top bureaucrats’ individual positions; they also threatened the very purpose for which Russia’s rulers use their power, namely accumulation of capital for the purposes of international competition.
For what, ultimately, determines the distribution of economic resources in Russia, and the system of command that enforces that distribution is not the arbitrary will of the planners. Their decisions are shaped, above all, by the dreadful logic of world imperialism. Every move by their rivals in the world must be matched, and matched rapidly. The Americans have ‘MIRVed’ their missiles: so must the Russians, whatever the cost. Submarine launcher must be matched to submarine launcher, radar system to radar system, payload to payload, megadeath potential to megadeath potential. Survival as a ‘great power’ in a great power system demands an ability to destroy half the globe in ten minutes, and under the conditions of modern military technology possession and maintenance of that ability is unbelievably costly.
The costs are borne by the Russian people (and the peoples of the satellites). The existing ‘command economy’ is the only available means by which the people can be made to carry those costs. And the reformers threaten that system of priorities. Their criticisms reached into the internal life of the ruling party, into the state, into the alienation of the working class. If their criticisms were met, if their ‘reforms’ were carried through, the ability of the state to enforce its present priorities on Russian society would be destroyed. The democratisation of political and economic life, a democratisation absolutely required by any serious programme for economic reform, would permit the Russian working class to decide that butter is preferable to ICBMs, houses to steel mills.
In addition, while the reformers’ proposals for change were addressed to the existing ruling class, they threatened in practice to let loose the furies of social revolution. Experience in Eastern Europe showed that all too well: once the reform process develops any degree of momentum, its implicit demands for political democratisation are liable to be seized on by the working classes – and their criticisms and demands rapidly go much further than the original proponents of ‘reform’ ever intended.
In practice, therefore, the ‘reform’ road is closed: the existing bureaucracy resists reform, and the reformers fear its implications. So the endemic stagnation is not overcome, and the crisis deepens. Moshe Lewin’s book documents the reformers’ critiques of Russian economic realities, and the conclusions they drew about the contradictions of Russian state capitalism. He shows how, inexorably, the reform economists of the 1960s were drawn into reviewing the debates in the 1920s that preceded and accompanied Stalin’s forced industrialisation. Above all, the Russian reformers looked back to Bukharin and the criticisms he and his comrades offered at the time of the first Five Year Plan, criticisms that turned out to be very prescient. The pursuit of ‘super-tempos’ of growth, Bukharin argued, must involve over-centralisation, increasing irrationality, increased use of coercion to force the surpluses needed for ‘too rapid’ development out of the population, must involve smashing the remnants of soviet and inner-party democracy.
At the descriptive level, Lewin’s book is exceptionally fine. Anyone with any lingering doubts about Stalinist industrialisation should read it. Anyone looking for reasons why Marxist tradition began with a critique of the state, why the smashing of the state remains a fundamental part of any Marxist programme, should read it. Anyone who still thinks that ‘bigness’ has some automatic socialist virtue should read it. But, while Lewin’s book deserves a large readership, it also deserves a critical readership. There are significant gaps in his account.
Crucially, Lewin says almost nothing about the place of Russia in the world economy. His admiration for Bukharin as a critic of Stalinism is excessive, and unbalanced: the Bukharin who wrote Imperialism and World Economy in 1915 constructed a magnificent picture of the drives to state capitalism within the imperialist world economy. In the 1920s, however, Bukharin ‘forgot’ what he had earlier demonstrated: that developments in any one country depended massively on that country’s place in the international capitalist market. He became, for a crucial period in Russian development, Stalin’s hack theorist, defending the absurd conception of ‘socialism in one country’, assisting in the crushing of inner-party democracy and, hence, retarding and preventing the development of the world revolutionary movement. Lewin presents these questions as if they were secondary, ‘ideological’ issues, focussing only on the formal merits of Bukharin’s defence of the New Economic Policy (NEP) of the1920s. The NEP has been a source of inspiration to the Russian ‘reform’ economists of the 1960s, and understandably so: the pace of economic development under NEP was more rational, the degree of substantive and intellectual freedom altogether greater, than under Stalin and his heirs. Nonetheless – a point Lewin does not mention – the NEP ran into increasing difficulties itself.
Bukharin’s proposals in the 1920s, in the debate with the Left Opposition, for ‘socialism at a snail’s pace’, for balanced rather than forced growth, for reliance on market forces especially amongst the peasantry, was formally correct, given only one missing factor: world revolution. In isolated, backward Russia, however, Bukharin’s plan for Russian development would have led, as his critics pointed out, to peasant-based counter-revolution. ‘Balanced’ rates of industrial growth could not satisfy the demand from the peasants for consumer goods, must provoke inflation, must produce increasing discontent in the countryside. Russian economic development could only be ‘balanced’ if significant resources, in consumer and capital goods, could come in from outside, as a result of socialist revolution in the advanced capitalist countries. In reality, Bukharin’s ‘socialism in one country’ and Bukharin’s economic policies were at complete variance. The merit of the Left Opposition – or at least of the best of its theorists – lay not so much in their emphasis on the need for more rapid industrialisation as in their insistence on revolutionary working-class internationalism. For the economic programme of the Left Opposition, if applied to an isolated and backward Russia alone, would – by different mechanisms – have produced the same results as Bukharin’s policies.
More rapid industrialisation would, in the short run, only exacerbate peasant discontent, since the prime source of the needed surpluses for industrialisation must be the peasantry, as Preobrazhensky (a leading ‘Left’ economist) made very clear. Only if the needed capital inputs came from revolutionary support abroad could the domestic economic programmes of either the ‘Right’ or the ‘Left’ be realised. ‘Socialism in one country’ was not a separate, ‘ideological’ issue, even if some of the ‘Left’ like Preobrazhensky (cited, p.34) thought so. Nor was the debate about economic policy in the 1920s merely a technical debate: at issue was the central question, which class is to rule? The merit of the Left again lay in that they forcefully criticised the bureaucratic degeneration of party and state (as did Bukharin, though even more too late) and argued for a revival of working-class organs of government. Moshe Lewintreats the debate as if it were no more than an acrimonious academic argument, capable of being resolved through mutual understanding:
‘... the quarrel with Bukharin could have been settled at a bargaining table at which practical policies might be formulated. If only matters of grand theory had been left to be settled by further study ...’ (pp.35-6).
And if Lewin does not seem, in this book at least, to offer a satisfactory history of the NEP period, the same judgment must also be offered of his whole book. There is no account of the central dynamic of the Stalinist economy, hence no sense of the interests that the bureaucracy seeks to defend. Thus, the essential failure to date of the ‘reform’ movement also remains unexplained, and-as a consequence – there is no discussion of the alternatives to the ‘reform’ programme.
It is not that any aspect of the ‘reform’ programme per se is formally incorrect: the state must be subordinated to society; equal rights must be won for the agriculturalists; industry and agriculture must have a considerable degree of autonomy; democratisation and the realisation of the co-operative principle are needed; political parties must be just that, not police and state organisations; the bureaucracy must be dismantled. But who is to do these things? The reformers have offered substantial and powerful critiques of the realities of Russian state capitalism, but (at least as they are presented here) they have failed to identify the organising principle of the society they criticise, and they have failed to identify the agent of change. Typically, as with the open letter of Sakharov, Turchin and Medvedey, they have addressed themselves to the party leadership. It is as if a radical critic of British industry were to set out to persuade the heads of the CBI that capitalism must be abolished, and by them. Sakharov and his colleagues warned the party leadership that if they did not reform Russia, there was a danger from ‘demagogues of the fascist type’ on the Right, and from an unidentified extreme Left. That unidentified extreme Left does not otherwise appear in this book – it is presumably a Left that has no hesitations about calling for the overthrow of the existing system by the working class. Far from being a ‘danger’, that unidentified extreme Left – however difficult the circumstances in which it develops and propounds its idea – is the only hope for realistic ‘reform’ in Russia.
There is an enormous amount of valuable material in this book. It is ultimately disappointing, however, because it restricts itself to the reformist Russian critics of Stalinism, and does not evaluate them realistically – i.e. from a revolutionary standpoint.
Last updated: 21.1.2008