I was in no hurry to reply, because I saw no urgency in the questions you raised. All the more so because there are other questions which are urgent, and which naturally deflected attention from your letter.
I shall answer point by point.
The first point.
There is a statement in the "Remarks" to the effect that society is not powerless against the laws of science, that man, having come to know economic laws, can utilize them in the interests of society. You assert that this postulate cannot be extended to other social formations, that it holds good only under socialism and communism, that the elemental character of the economic processes under capitalism, for example, makes it impossible for society to utilize economic laws in the interests of society.
That is not true. At the time of the bourgeois revolution in France, for instance, the bourgeoisie utilized against feudalism the law that relations of production must necessarily conform with the character of the productive forces, over-threw the feudal relations of production, created new, bourgeois relations of production, and brought them into conformity with the character of the productive forces which had arisen in the bosom of the feudal system. The bourgeoisie did this not because of any particular abilities it possessed, but because it was vitally interested in doing so. The feudal lords put up resistance to this not from stupidity, but because they were vitally interested in preventing this law from becoming effective.
The same must be said of the socialist revolution in our country. The working class utilized the law that the relations of production must necessarily conform with the character of the productive forces, overthrew the bourgeois relations of production, created new, socialist relations of production and brought them into conformity with the character of the productive forces. It was able to do so not because of any particular abilities it possessed, but because it was vitally interested in doing so. The bourgeoisie, which from an advanced force at the dawn of the bourgeois revolution had already become a counter-revolutionary force, offered every resistance to the implementation of this law - and it did so not because it lacked organization, and not because the elemental nature of economic processes drove it to resist, but chiefly because it was to its vital interest that the law should not become operative.
1. Economic processes, economic laws are in one degree or another utilized in the interests of society not only under socialism and communism, but under other formations as well;
2. The utilization of economic laws in class society always and everywhere has a class background, and, moreover, always and everywhere the champion of the utilization of economic laws in the interests of society is the advanced class, while the obsolescent classes resist it.
The difference in this matter between the proletariat and the other classes which at any time in the course of history revolutionized the relations of production consists in the fact that the class interests of the proletariat merge with the interests of the overwhelming majority of society, because proletarian revolution implies the abolition not of one or another form of exploitation, but of all exploitation, while the revolutions of other classes, which abolished only one or another form of exploitation, were confined within the limits of their narrow class interests, which conflicted with the interests of the majority of society.
The "Remarks" speak of the class background of the utilization of economic laws in the interests of society. It is stated there that "unlike the laws of natural science, where the discovery and application of a new law proceeds more or less smoothly, the discovery and application of a new law in the economic field, affecting as it does the interests of obsolescent forces of society, meets with the most powerful resistance on their part." (1) This point you missed.
The second point.
You assert that complete conformity of the relations of production with the character of the productive forces can be achieved only under socialism and communism, and that under other formations the conformity can only be partial.
This is not true. In the epoch following the bourgeois revolution, when the bourgeoisie had shattered the feudal relations of production and established bourgeois relations of production, there undoubtedly were periods when the bourgeois production relations did fully conform with the character of the productive forces. Otherwise, capitalism could not have developed as swiftly as it did after the bourgeois revolution.
Further, the words "full conformity" must not be understood in the absolute sense. They must not be understood as meaning that there is altogether no lagging of the relations of production behind the growth of the productive forces under socialism. The productive forces are the most mobile and revolutionary forces of production. They undeniably move in advance of the relations of production even under socialism. Only after a certain lapse of time do the relations of production change in line with the character of the productive forces.
How, then, are the words "full conformity" to be under-stood? They are to be understood as meaning that under socialism things do not usually go to the length of a conflict between the relations of production and the productive forces, that society is in a position to take timely steps to bring the lagging relations of production into conformity with the character of the productive forces. Socialist society is in a position to do so because it does not include the obsolescent classes that might organize resistance. Of course, even under socialism there will be backward, inert forces that do not realize the necessity for changing the relations of production; but they, of course, will not be difficult to over-come without bringing matters to a conflict.
The third point.
It appears from your argument that you regard the means of production, and, in the first place, the implements of production produced by our nationalized enterprises, as commodities.
Can means of production be regarded as commodities in our socialist system? In my opinion they certainly cannot.
A commodity is a product which may be sold to any purchaser, and when its owner sells it, he loses ownership of it and the purchaser becomes the owner of the commodity, which he may resell, pledge or allow to rot. Do means of production come within this category? They obviously do not. In the first place, means of production are not "sold" to any purchaser, they are not "sold" even to collective farms; they are only allocated by the state to its enterprises. In the second place, when transferring means of production to any enterprise, their owner - the state - does not at all lose the ownership of them; on the contrary, it retains it fully. In the third place, directors of enterprises who receive means of production from the Soviet state, far from becoming their owners, are deemed to be the agents of the state in the utilization of the means of production in accordance with the plans established by the state.
It will be seen, then, that under our system means of production can certainly not be classed in the category of commodities.
Why, in that case, do we speak of the value of means of production, their cost of production, their price, etc.?
For two reasons.
Firstly, this is needed for purposes of calculation and settlement, for determining whether enterprises are paying or running at a loss, for checking and controlling the enterprises. But that is only the formal aspect of the matter.
Secondly, it is needed in order, in the interests of our foreign trade, to conduct sales of means of production to foreign countries. Here, in the sphere of foreign trade, but only in this sphere, our means of production really are commodities, and really are sold (in the direct meaning of the term).
It therefore follows that in the sphere of foreign trade the means of production produced by our enterprises retain the properties of commodities both essentially and formally, but that in the sphere of domestic economic circulation, means of production lose the properties of commodities, cease to be commodities and pass out of the sphere of operation of the law of value, retaining only the outward integument of commodities (calculation, etc.).
How is this peculiarity to be explained?
The fact of the matter is that in our socialist conditions economic development proceeds not by way of upheavals, but by way of gradual changes, the old not simply being abolished out of hand, but changing its nature in adaptation to the new, and retaining only its form; while the new does not simply destroy the old, but infiltrates into it, changes its nature and its functions, without smashing its form, but utilizing it for the development of the new. This, in our economic circulation, is true not only of commodities, but also of money, as well as of banks, which, while they lose their old functions and acquire new ones, preserve their old form, which is utilized by the socialist system.
If the matter is approached from the formal angle, from the angle of the processes taking place on the surface of phenomena, one may arrive at the incorrect conclusion that the categories of capitalism retain their validity under our economy. If, however, the matter is approached from the standpoint of Marxist analysis, which strictly distinguishes between the substance of an economic process and its form, between the deep processes of development and the surface phenomena, one comes to the only correct conclusion, namely, that it is chiefly the form, the outward appearance, of the old categories of capitalism that have remained in our country, but that their essence has radically changed in adaptation to the requirements of the development of the socialist economy.
The fourth point.
You assert that the law of value exercises a regulating influence on the prices of the "means of production" produced by agriculture and delivered to the state at the procurement prices. You refer to such "means of production" as raw materials - cotton, for instance. You might have added flax, wool and other agricultural raw materials.
It should first of all be observed that in this case it is not "means of production" that agriculture produces, but only one of the means of production - raw materials. The words "means of production" should not be juggled with. When Marxists speak of the production of means of production, what they primarily have in mind is the production of implements of production, what Marx calls "the instruments of labour, those of a mechanical nature, which, taken as a whole, we may call the bone and muscles of production," which constitute the "characteristics of a given epoch of production." (2) To equate a part of the means of production (raw materials) with the means of production, including the implements of production, is to sin against Marxism, because Marxism considers that the implements of production play a decisive role compared with all other means of production. Everyone knows that, by themselves, raw materials cannot produce implements of production, although certain kinds of raw material arc necessary for the production of implements of production, while no raw material can be produced without implements of production.
Further: is the influence of the law of value on the price of raw materials produced by agriculture a regulating influence, as you, Comrade Notkin, claim? It would be a regulating one, if prices of agricultural raw materials had "free" play in our country, if the law of competition and anarchy of production prevailed, if we did not have a planned economy, and if the production of raw materials were not regulated by plan. But since all these "ifs" are missing in our economic system, the influence of the law of value on the price of agricultural raw materials cannot be a regulating one. In the first place, in our country prices of agricultural raw materials are fixed, established by plan, and are not "free." In the second place, the quantities of agricultural raw materials produced are not determined spontaneously or by chance elements, but by plan. In the third place, the implements of production needed for the producing of agricultural raw materials are concentrated not in the hands of individuals, or groups of individuals, but in the hands of the state. What then, after this, remains of the regulating function of the law of value? It appears that the law of value is itself regulated by the above-mentioned factors characteristic of socialist production.
Consequently, it cannot be denied that the law of value does influence the formation of prices of agricultural raw materials, that it is one of the factors in this process. But still less can it be denied that its influence is not, and cannot be, a regulating one.
The fifth point.
When speaking, in my "Remarks," of the profitableness of the socialist national economy, I was controverting certain comrades who allege that, by not giving great preference to profitable enterprises, and by tolerating the existence side by side with them of unprofitable enterprises, our planned economy is killing the very principle of profitableness of economic undertakings. The "Remarks" say that profitableness considered from the standpoint of individual plants or industries is beneath all comparison with that higher form of profitableness which we get from our socialist mode of production, which saves us from crises of overproduction and ensures us a continuous expansion of production.
But it would be mistaken to conclude from this that the profitableness of individual plants and industries is of no particular value and is not deserving of serious attention. That, of course, is not true. The profitableness of individual plants and industries is of immense value for the development of our industry. It must be taken into account both when planning construction and when planning production. It is an elementary requirement of our economic activity at the present stage of development.
The sixth point.
It is not clear how your words "extended production in strongly deformed guise" in reference to capitalism are to be understood. It should be said that such production, and extended production at that, does not occur in nature.
It is evident that, after the world market has split, and the sphere of exploitation of the world's resources by the major capitalist countries (U.S.A., Britain, France) has begun to contract, the cyclical character of the development of capitalism - expansion and contraction of production - must continue to operate. However, expansion of production in these countries will proceed on a narrower basis, since the volume of production in these countries will diminish.
The seventh point.
The general crisis of the world capitalist system began in the period of the First World War, particularly due to the falling away of the Soviet Union from the capitalist system. That was the first stage in the general crisis. A second stage in the general crisis developed in the period of the Second World War, especially after the European and Asian people's democracies fell away from the capitalist system. The first crisis, in the period of the First World War, and the second crisis, in the period of the Second World War, must not be regarded as separate, unconnected and independent crises, but as stages in the development of the general crisis of the world capitalist system.
Is the general crisis of world capitalism only a political, or only an economic crisis? Neither the one, nor the other. It is a general, i.e., all-round crisis of the world capitalist system, embracing both the economic and the political spheres. And it is clear that at the bottom of it lies the ever-increasing decay of the world capitalist economic system, on the one hand, and the growing economic might of the countries which have fallen away from capitalism — the U.S.S.R., China and the other people's democracies — on the other.
April 21, 1952
1. See p. 6 of this book.
2. Karl Marx, Capital, Eng. ed., Vol. I, Chapter 5. Section I.
Next: Concerning the Errors of Comrade L. D. Yaroshenko