Joseph Stalin

Economic Problems of the USSR

2. Commodity Production Under Socialism

Certain comrades affirm that the Party acted wrongly in preserving commodity production after it had assumed power and nationalized the means of production in our country. They consider that the Party should have banished commodity production there and then. In this connection they cite Engels, who says:

"With the seizing of the means of production by society, production of commodities is done away with, and, simultaneously, the mastery of the product over the producer".


These comrades are profoundly mistaken.

Let us examine Engels' formula. Engels' formula cannot be considered fully clear and precise, because it does not indicate whether it is referring to the seizure by society of all or only part of the means of production, that is, whether all or only part of the means of production are converted into public property. Hence, this formula of Engels' may be understood either way.

Elsewhere in Anti-Duhring Engels speaks of mastering "all the means of production," of taking possession of "all means of production." Hence, in this formula Engels has in mind the nationalization not of part, but of all the means of production, that is, the conversion into public property of the means of production not only of industry, but also of agriculture.

It follows from this that Engels has in mind countries where capitalism and the concentration of production have advanced far enough both in industry and in agriculture to permit the expropriation of all the means of production in the country and their conversion into public property. Engels, consequently, considers that in such countries, parallel with the socialization of all the means of production, commodity production should be put an end to. And that, of course, is correct.

There was only one such country at the close of the last century, when Anti-Duhring was published - Britain. There the development of capitalism and the concentration of production both in industry and in agriculture had reached such a point that it would have been possible, in the event of the assumption of power by the proletariat, to convert all the country's means of production into public property and to put an end to commodity production.

I leave aside in this instance the question of the importance of foreign trade to Britain and the vast part it plays in her national economy. I think that only after an investigation of this question can it be finally decided what would be the future of commodity production in Britain after the proletariat had assumed power and all the means of production had been nationalized.

However, not only at the close of the last century, but today too, no country has attained such a degree of development of capitalism and concentration of production in agriculture as is to be observed in Britain. As to the other countries, notwithstanding the development of capitalism in the countryside, they still have a fairly numerous class of small and medium rural owner-producers, whose future would have to be decided if the proletariat should assume power.

But here is a question: what are the proletariat and its party to do in countries, ours being a case in point, where the conditions arc favourable for the assumption of power by the proletariat and the overthrow of capitalism, where capitalism has so concentrated the means of production in industry that they may be expropriated and made the property of society, but where agriculture, notwithstanding the growth of capitalism, is divided up among numerous small and medium owner-producers to such an extent as to make it impossible to consider the expropriation of these producers?

To this question Engels' formula does not furnish an answer. Incidentally, it was not supposed to furnish an answer, since the formula arose from another question, namely, what should be the fate of commodity production after all the means of production had been socialized.

And so, what is to be done if not all, but only part of the means of production have been socialized, yet the conditions are favourable for the assumption of power by the proletariat - should the proletariat assume power and should commodity production be abolished immediately thereafter?

We cannot, of course, regard as an answer the opinion of certain half-baked Marxists who believe that under such conditions the thing to do is to refrain from taking power and to wait until capitalism has succeeded in ruining the millions of small and medium producers and converting them into farm labourers and in concentrating the means of production in agriculture, and that only after this would it be possible to consider the assumption of power by the proletariat and the socialization of all the means of production. Naturally, this is a "solution" which Marxists cannot accept if they do not want to disgrace themselves completely.

Nor can we regard as an answer the opinion of other half-baked Marxists, who think that the thing to do would be to assume power and to expropriate the small and medium rural producers and to socialize their means of production. Marxists cannot adopt this senseless and criminal course either, because it would destroy all chances of victory for the proletarian revolution, and would throw the peasantry into the camp of the enemies of the proletariat for a long time.

The answer to this question was given by Lenin in his writings on the "tax in kind" and in his celebrated "cooperative plan."

Lenin's answer may be briefly summed up as follows:

a) Favourable conditions for the assumption of power should not be missed - the proletariat should assume power without waiting until capitalism has succeeded in ruining the millions of small and medium individual producers;

b) The means of production in industry should be expropriated and converted into public property;

c) As to the small and medium individual producers, they should be gradually united in producers' cooperatives, i.e., in large agricultural enterprises, collective farms;

d) Industry should be developed to the utmost and the collective farms should be placed on the modern technical basis of large-scale production, not expropriating them, but on the contrary generously supplying them with first-class tractors and other machines;

e) In order to ensure an economic bond between town and country, between industry and agriculture, commodity production (exchange through purchase and sale) should be preserved for a certain period, it being the form of economic tie with the town which is alone acceptable to the peasants, and Soviet trade - state, cooperative, and collective-farm - should be developed to the full and the capitalists of all types and descriptions ousted from trading activity.

The history of socialist construction in our country has shown that this path of development, mapped out by Lenin, has fully justified itself.

There can be no doubt that in the case of all capitalist countries with a more or less numerous class of small and medium producers, this path of development is the only possible and expedient one for the victory of socialism.

It is said that commodity production must lead, is bound to lead, to capitalism all the same, under all conditions. That is not true. Not always and not under all conditions! Commodity production must not be identified with capitalist production. They are two different things. Capitalist production is the highest form of commodity production. Commodity production leads to capitalism only if there is private owner-ship of the means of production, if labour power appears in the market as a commodity which can be bought by the capitalist and exploited in the process of production, and if, consequently, the system of exploitation of wageworkers by capitalists exists in the country. Capitalist production begins when the means of production are concentrated in private hands, and when the workers are bereft of means of production and are compelled to sell their labour power as a commodity. Without this there is no such thing as capitalist production.

Well, and what is to be done if the conditions for the conversion of commodity production into capitalist production do not exist, if the means of production are no longer private but socialist property, if the system of wage labour no longer exists and labour power is no longer a commodity, and if the system of exploitation has long been abolished - can it be considered then that commodity production will lead to capitalism all the same? No, it cannot. Yet ours is precisely such a society, a society where private ownership of the means of production, the system of wage labour, and the system of exploitation have long ceased to exist.

Commodity production must not be regarded as something sufficient unto itself, something independent of the surrounding economic conditions. Commodity production is older than capitalist production. It existed in slave-owning society, and served it, but did not lead to capitalism. It existed in feudal society and served it, yet, although it prepared some of the conditions for capitalist production, it did not lead to capitalism. Why then, one asks, cannot commodity production similarly serve our socialist society for a certain period without leading to capitalism, bearing in mind that in our country commodity production is not so boundless and all-embracing as it is under capitalist conditions, being confined within strict bounds thanks to such decisive economic conditions as social ownership of the means of production, the abolition of the system of wage labour, and the elimination of the system of exploitation?

It is said that, since the domination of social ownership of the means of production has been established in our country, and the system of wage labour and exploitation has been abolished, commodity production has lost all meaning and should therefore be done away with.

That is also untrue. Today there are two basic forms of socialist production in our country: state, or publicly-owned production, and collective-farm production, which cannot be said to be publicly owned. In the state enterprises, the means of production and the product of production are national property. In the collective farm, although the means of production (land, machines) do belong to the state, the product of production is the property of the different collective farms, since the labour, as well as the seed, is their own, while the land, which has been turned over to the collective farms in perpetual tenure, is used by them virtually as their own property, in spite of the fact that they cannot sell, buy, lease or mortgage it.

The effect of this is that the state disposes only of the product of the state enterprises, while the product of the collective farms, being their property, is disposed of only by them. But the collective farms are unwilling to alienate their products except in the form of commodities, in exchange for which they desire to receive the commodities they need. At present the collective farms will not recognize any other economic relation with the town except the commodity relation - exchange through purchase and sale. Because of this, commodity production and trade are as much a necessity with us today as they were, say, thirty years ago, when Lenin spoke of the necessity of developing trade to the utmost.

Of course, when instead of the two basic production sectors, the state sector and the collective-farm sector, there will be only one all-embracing production sector, with the right to dispose of all the consumer goods produced in the country, commodity circulation, with its "money economy," will disappear, as being an unnecessary element in the national economy. But so long as this is not the case, so long as the two basic production sectors remain, commodity production and commodity circulation must remain in force, as a necessary and very useful element in our system of national economy. How the formation of a single and united sector will come about, whether simply by the swallowing up of the collective-farm sector by the state sector - which is hardly likely (because that would be looked upon as the expropriation of the collective farms) - or by the setting up of a single national economic body (comprising representatives of state industry and of the collective farms), with the right at first to keep account of all consumer product in the country, and eventually also to distribute it, by way, say, of products-exchange - is a special question which requires separate discussion.

Consequently, our commodity production is not of the ordinary type, but is a special kind of commodity production, commodity production without capitalists, which is concerned mainly with the goods of associated socialist producers (the state, the collective farms, the cooperatives), the sphere of action of which is confined to items of personal consumption, which obviously cannot possibly develop into capitalist production, and which, together with its "money economy," is designed to serve the development and consolidation of socialist production.

Absolutely mistaken, therefore, are those comrades who allege that, since socialist society has not abolished commodity forms of production, we are bound to have the reappear-ance of all the economic categories characteristic of capital-ism: labour power as a commodity, surplus value, capital, capitalist profit, the average rate of profit, etc. These comrades confuse commodity production with capitalist production, and believe that once there is commodity production there must also be capitalist production. They do not realize that our commodity production radically differs from commodity production under capitalism.

Further, I think that we must also discard certain other concepts taken from Marx's Capital - where Marx was concerned with an analysis of capitalism - and artificially applied to our socialist relations. I am referring to such concepts, among others, as "necessary" and "surplus" labour, "necessary" and "surplus" product, "necessary" and "surplus" time. Marx analyzed capitalism in order to elucidate the source of exploitation of the working class - surplus value - and to arm the working class, which was bereft of means of production, with an intellectual weapon for the overthrow of capitalism. It is natural that Marx used concepts (categories) which fully corresponded to capitalist relations. But it is strange, to say the least, to use these concepts now, when the working class is not only not bereft of power and means of production, but, on the contrary, is in possession of the power and controls the means of production. Talk of labour power being a commodity, and of "hiring" of workers sounds rather absurd now, under our system: as though the working class, which possesses means of production, hires itself and sells its labour power to itself. It is just as strange to speak now of "necessary" and "surplus" labour: as though, under our conditions, the labour contributed by the workers to society for the extension of production, the promotion of education and public health, the organization of defence, etc., is not just as necessary to the working class, now in power, as the labour expended to supply the personal needs of the worker and his family.

It should be remarked that in his Critique of the Gotha Program, where it is no longer capitalism that he is investigating, but, among other things, the first phase of communist society, Marx recognizes labour contributed to society for extension of production, for education and public health, for administrative expenses, for building up reserves, etc., to be just as necessary as the labour expended to supply the consumption requirements of the working class.

I think that our economists should put an end to this in-congruity between the old concepts and the new state of affairs in our socialist country, by replacing the old concepts with new ones that correspond to the new situation.

We could tolerate this incongruity for a certain period, but the time has come to put an end to it.

1. Ibid., p. 392.

Next: 3. The Law of Value Under Socialism