A Textbook issued by the Economics Institute of the Academy of Sciences of the U.S.S.R


Marxist-Leninist political economy has passed through more than a century of development. As with Marxist-Leninism as a whole, Marxist-Leninist political economy bears a creative, operative character. Thoroughly opposed to dogmatism, it develops in close and unbreakable association with the practice of the labour movement, with the practical struggle of the working class and all working people for socialism and communism, and is enriched by new theoretical principles on the basis of the generalisation of new historical experiences.

Marx and Engels gave a scientific analysis of the fundamentals of capitalism as an historically transitory mode of production, and disclosed the economic laws of its rise, development and downfall. In their Manifesto of the Communist Party, Capital, Critique of the Gotha Programme, Anti-Duhring, and other works, Marx and Engels revealed the historical role of the proletariat as the grave-digger of capitalism and the builder of socialist society. They created the theory of the proletarian revolution, proved the economic necessity of the transition period from capitalism to socialism as a distinct historical period of the revolutionary transformation of capitalist society into socialist society, and in general outline indicated the character of the two phases of development of communist society.

The most important thing in Marxism is its teaching on the dictatorship of the proletariat as a State of a new type, playing a decisive role in the socialist transformation of society. Marx and Engels outlined a programme of the most important measures to be carried through by the proletarian dictatorship: expropriation of the expropriators, the replacement of private ownership of the means of production by social ownership, the abolition of exploitation of man by man and of the exploiting classes, and the ensuring of a rapid rise of the productive forces of society.

Marx and Engels foresaw that in socialist society anarchy of production would be replaced by planned development of social economy, and the principle of distribution according to work would be realised. Only with the further rapid development of the productive forces, with the growth of an abundance of products, with the transformation of work into the prime necessity of life for man, will there be completed the transition from the lower stage of communism to the higher stage, when the ruling principle of social life will be: "From each according to his ability, to each according to his needs."

Lenin, developing Marxist political economy, enriched it by the scientific investigation of the monopolist stage of capitalism, imperialism, and of the general crisis of capitalism. The most important conclusion from this investigation was the new, completed theory of the socialist revolution, the theory of the possibility of the victory of socialism first of all in a few countries or even in one country alone.

Guided by the thesis of Marx and Engels on the expropriation of the expropriators as the primary task of the proletarian revolution, Lenin, in his On the Tasks of the Proletariat in the Present Revolution, The Threatening Catastrophe and how to Combat It, Will the Bolsheviks Maintain State Power? and other works, provided a scientific foundation for the programme of nationalisation of the land, large-scale industry, the banks and foreign trade, as the most important measures of the proletarian dictatorship aiming at the seizure of the key positions of the economy.

On the basis of the scientific generalisation of the historical experience of the great October Socialist Revolution and the practice of socialist construction in the U.S.S.R., Lenin enriched Marxism as a whole, and Marxist political economy in particular, by a profound analysis of the laws of the socialist transformation of society. In his State and Revolution, The Proletarian Revolution and Kautsky the Renegade, Left-Wing Communism: an Infantile Disorder, Economics and Politics in the Epoch of the Dictatorship of the Proletariat, and other works, an all-round investigation is provided of the question of the dictatorship of the proletariat. Lenin defined the dictatorship of the proletariat as a special form of class alliance of the proletariat with the main masses of the peasantry, under the leadership of the proletariat, and as the highest type of proletarian democracy, expressing the interests of the working masses. He revealed the content and historic mission of the dictatorship of the proletariat, defining its three basic aspects: (a) suppression of the exploiters, (b) leadership of the working masses, and (c) the building of socialist society.

Lenin investigated the question of. the nature and role of social classes and the class struggle in the transition period from capitalism to socialism, giving a scientific analysis of the economic and class structure of society in this period. He illuminated in all its aspects the question of the alliance between the working class and the basic masses of the peasantry and of the leading role of the working class in this alliance. Lenin indicated the way to the liquidation of the exploiting classes and the abolition of exploitation of man by man in the period of the dictatorship of the working class, showing that the building of socialism is accompanied by sharp class struggle against the exploiting classes.

In his Next Tasks of Soviet Power, How to Organize Emulation, The Great Beginning, On the Single Economic Plan, On the Food Tax, On Co-operation and other works, Lenin provided the theoretical basis for and indicated the path of economic policy in the transition period from capitalism to socialism. Lenin was the author of the concrete plan for building socialism in the U.S.S.R., which was of world historical importance. The most important parts of this plan were the socialist industrialisation of the country and the collectivisation of agriculture. Lenin showed that, in order to build the foundations of socialist economy and to safeguard the economic independence of the Soviet land from world imperialism, it was necessary to overcome, in the shortest possible time, the age-old backwardness of Russia and to create a socialist heavy industry. Lenin put forward the co-operative plan of gradually drawing the peasants into the stream of socialist construction, at first on "the basis of a trade bond then also by a bond between industry and agriculture in the field of production.

By drawing general conclusions from the practice of socialist construction, Lenin worked out the foundations of the basic economic law of socialism, the law of planned development of the national economy, and other laws. Lenin laid down the principles of socialist management, revealed the significance of personal material incentive in increasing socialist production and creatively developed the Marxist principle of distribution according to work under socialism, of wages, etc. Lenin in his works showed the necessity for the development of trade and the utilisation of money in developing Soviet economy, and in strengthening the bond between town and country. Lenin, with scientific discernment, foresaw that the socialist revolution, carrying out the great change from compulsory labour for the exploiters to free labour for themselves, for the whole of society, would give birth to a revolutionary enthusiasm among the masses which was unprecedented in history, and would for the first time create the possibility of emulation on a broad mass scale. He elaborated the questions of the strictest national accounting and control over production and distribution of products of the establishment of a new socialist labour discipline, and of economic accounting.

Lenin’s works contain a further creative development of the basic principles of Marxism concerning the way to build communist society, the role of electrification and a rise in labour productivity in creating the material production basis of communism, on the conditions for the transition to the communist principle of distribution according to needs.

Basing himself on the works of the creators of genuine scientific political economy—Marx, Engels, and Lenin—Stalin advanced and developed a number of new principles in economic science. Stalin’s works given an analysis of contemporary monopoly capitalism; they paint a picture of the general crisis of the capitalist system as the all-round crisis of capitalism, embracing both its economics and politics.

On the basis of generalisation from the experience of socialist construction in the U.S.S.R., Stalin worked out a number of problems of the political economy of socialism. Proceeding from Lenin’s teachings, Stalin, in his reports to Party congresses and conferences, in his works Problems of Leninism, Economic’

Problems of Socialism in the U.S.S.R., etc., showed concretely ways and methods of socialist construction, of effecting the socialist industrialisation of the country and the collectivisation of agriculture. Basing himself on the fundamental principles laid down in the works of Marx, Engels and Lenin, Stalin formulated the basic economic law of socialism and the law of planned, proportionate development of the national economy.

In the works of Stalin there are to be found his further elaboration of Lenin’s propositions on the methods of socialist management, on the necessity of utilising the law of value and money, on economic accounting, on the. principle of the personal material interest of the workers in the results of their labour, on the superiority of the socialist system of economy over the capitalist system.

Stalin developed and made concrete Marxist-Leninist teachings on the transition from socialism to communism: on the State under communism, on the effacing of the essential differences between town and country and between mental and physical labour.

Marxist-Leninist political economy is being further developed on the basis of analysing the economic processes taking place in the capitalist countries, generalising the practice of communist construction in the U.S.S.R. and the building of socialism in the countries of people’s democracy. It is being enriched by the new experience of the revolutionary struggle of the working class and broad sections of working people in the capitalist countries against oppression and exploitation, and also by the experience of the national liberation struggles of the colonial peoples.

The creative development of Marxism-Leninism, the theoretical generalisation of the practice of the struggle for communism, is vividly reflected in the decisions of the Communist Party of the Soviet Union and of the fraternal Communist and Workers’ Parties of other countries. New ideas are being contributed to economic theory by the leaders of the proletarian parties of all countries, closely linked with the masses of the working people and expressing in their works the progressive tendencies of the development of material life of society.

Marxist-Leninist political economy, as the most important component part of Marxism-Leninism, is the most powerful ideological weapon of the proletariat in its struggle against capitalism for socialism. It is a genuinely scientific political economy, as it expresses the interests of the working class and all progressive forces of humanity interested in the objective study of the laws of the economic development of society, leading inevitably to the downfall of capitalism, to the victory of communism.

Marxist-Leninist political economy exposes the anti-scientific, reactionary character of bourgeois political economy. It exposes the class meaning of the reformist views of the petty-bourgeois economists, who bring grist to the mill of bourgeois political economy. It arms the working class with knowledge of the economic laws of the development of society, and makes it possible for the revolutionary Marxist-Leninist parties to build their policy on scientific foundations.

What basic conclusions result from the study of political economy? What does political economy teach?

(1) Political economy teaches above all that the economic development of human society is a process conforming to law. The rise and development of each mode of production, the replacement of one mode of production by another, take place not by the arbitrary will of man but in virtue of the operation of objective economic laws.

The laws of political economy, just as the laws of every other science, are a reflection in the brains of people of objective realities, conforming to law. In addition, political economy provides a deep and all-round justification for the most important Marxist proposition that the principal force in the development of society, the genuine creator of history, is the people the working masses. It shows the mobilising, organising, and transforming role of advanced ideas, arising from the urgent needs of the development of the material life of society. Political economy, revealing the laws of social production and the distribution of material wealth at the various stages of development of society, provides the key to an understanding of the whole process of development of human society as a single process, conforming to law in all its many-sidedness and contradictions.

Human society is developing from lower forms of its existence to higher ones. Each mode of production constitutes a definite stage in the advancing movement of society, in the development of its productive forces and relations of production. Prior to the socialist revolution the development of society proceeds in such a way that the relations of production of the new social economic order, arising to replace the old out-lived order, for a certain period of time assist the development of the productive forces, but later on become transformed into a fetter on them. There then takes place a change from one economic order of society to another, higher economic order. In a society divided into antagonistic classes, this change is brought about through the class struggle, by means of social revolution, overthrowing the power of the out-of-date ruling class and consolidating the power of the new, advanced class.

Political economy, studying comprehensively the rise, development and downfall of social-economic formations based on private property in the means of production, lays bare the economic roots of the class struggle. It shows that the creators of wealth are the working masses, but the fruits of their labour are appropriated by the exploiting classes. This means that the class struggle is conditioned by the vital material interests of definite classes and by the laws of economic development of each particular mode of production.

Each new social order based on private property in the means of production — slave society, feudalism, capitalism—consolidated the power of the exploiters, changing only the forms of exploitation and oppression of the working people. The whole course of the economic development of society bears witness to the fact that capitalism is the last social order based on the exploitation of man by man. Political economy shows that, in its monopolist stage, capitalism has already for a long time been transformed into a reactionary order, holding back the further advancing movement of society. To replace moribund capitalism there is advancing a new social order—socialism, signifying the abolition of exploiting classes, the ending of the exploitation of man by man.

The history of the development of human society completely confirms the correctness of this scientific conclusion of Marxist-Leninist political economy. Socialist society has been built in the Soviet Union. With the victory of socialism in the U.S.S.R. the anti-scientific inventions about the eternal nature of private property in the means of production and the capitalist order were completely exposed. The successful building of socialism is in progress in the European countries of people’s democracy. The great revolutionary transformations in China’s, economy have created the preconditions for the building of socialism which is in progress in this, the largest country of the East. The Soviet Union is carrying out the gradual transition from socialism to communism. The U.S.S.R. possesses all that is necessary for communist society to be built. Communist society, the first stage of which is socialism, is the ultimate aim of the struggle of the working people of all countries.

Political economy gives the working class and all working people confidence in the victory of communism, showing that this victory is determined by the whole preceding course of historical development.

(2) Political economy, from the experience of the U.S.S.R. and the countries of people’s democracy, teaches how the working people of the capitalist countries can free themselves from capitalist bondage. It shows that the enslavement and impoverishment of the working people in the bourgeois countries are not the result of accidental causes, but are rooted in the capitalist system of economy and are the outcome of the economic laws inherent in this system. Crises, unemployment, the impoverished condition of the masses of the people, cannot disappear without a change in the very basis of production relations, that is, without the means of production passing from the private ownership of the capitalists and landowners into the social ownership of the working people.

Disclosing the antithesis between the basic principles of bourgeois and socialist economy, and the irreconcilability of the class interests of the bourgeois on the one hand and those of the proletariat and all working people on the other, political economy shows the impossibility of the peaceful "growing" of capitalism into socialism. No efforts of any kind to reform to "improve" capitalism can put an end to the system of wage slavery. The great October Socialist Revolution proved irrefutably that only by liquidating the very foundations of capitalism can the working class and the working peasantry liberate themselves from bondage to the exploiters and enter on the road to a free, prosperous and cultured life. Historical experience fully confirms the truth of the Marxist proposition that the socialist revolution is inevitable, that to change from capitalism to socialism is impossible without the setting up of the power of the working people, without the dictatorship of the proletariat, without the alliance of the working class and the peasantry. For the achievement of this aim the existence of a Communist Party, capable of preparing the proletariat and the working masses for the decisive struggle with the bourgeoisie and organising the victory of the socialist revolution, is indispensable.

Political economy shows that the plunder and enslavement of the colonial peoples by the metropolitan countries arises from the very essence of imperialism, closely linked with the feudal landowning and bourgeois compradore circles of the colonial countries. The peoples of the colonial and semi-colonial countries can free themselves from robbery, poverty, and backwardness only by means of liberation from the yoke of imperialism and its local vassals, by abolishing the relics of feudalism and carrying out radical democratic changes. The colonial countries, having broken with the imperialist system and secured their independence, can, with the economic support of the U.S.S.R. and other countries of the socialist camp, escape the painful path of capitalist development and gradually create the preconditions for going on to the building of socialism. The experience of the revolutionary struggle and victory of the Chinese people has confirmed in practice this conclusion of Marxist-Leninist political economy, and has proved that the liberation of the colonial and semi-colonial countries from the yoke of imperialism leads them on to the path of free existence, of material and cultural prosperity.

The overthrow of the capitalist order in one bourgeois country or another and its replacement by the socialist order, the falling away of any colonial country from the imperialist system and the realisation in it of democratic transformations, take place not as a result of "export of revolution", which is a fiction of the imperialists, but by reason of the profound internal necessities of the economic development of these countries.

(3) Political economy teaches how to transform economy in the spirit of socialism. The transition to socialism cannot be carried out by arbitrarily chosen paths, but is a process conforming to laws. Political economy shows that the dictatorship of the working class in the building of the new, socialist society relies first and foremost upon the law of obligatory correspondence between production relations and the nature of the productive forces. In the transition period there takes place on the basis of this law the socialisation of the means of production, the abolition of the exploitation of man by man and the creation of socialist forms of economy. As relations of capitalist exploitation are abolished, socialist production relations arise and develop, and the economic laws of socialism begin to operate and develop. Making use of economic laws, the Socialist State consistently carries through a policy of industrialising the country and collectivising agriculture, building socialist society. The building of socialism proceeds in irreconcilable class struggle against the capitalist elements in town and country.

Political economy exposes the lying inventions of bourgeois ideologists to the effect that the working class, when it comes to power, is not capable of organising the economy. The historical experience of the U.S.S.R. shows what inexhaustible creative force is generated by the power of the working people. For the first time in history the working class and working people in a vast country, comprising one-sixth of the earth’s surface, cast aside the yoke of exploitation and oppression, became the masters of their country and created a socialist order which secured an uninterrupted rise of the productive forces social wealth, and material welfare and culture of the masses of the people. This proves that the people are capable of successfully doing without the exploiters, that the working class, the working masses, are capable not only of destroying the old bourgeois system of economy but also of building up a new, higher socialist system of economy. The practice of socialist construction in the countries of people’s democracy provides further convincing evidence of this.

Political economy provides the economic justification of the need for the leading role, of the working class in socialist construction, the durable alliance of the working class with the peasantry, having as its aim the building of socialism and the abolition of exploitation of man by man. The alliance of the working class with the peasantry is the unshakeable basis of the social order of all the countries of the socialist camp. On the basis of the alliance of the working class with the peasantry the age-old peasant question is being solved and the transition from small individual peasant farming to large-scale collective economy is being brought about, delivering the peasantry from poverty and ruin. The victory of collective farming in the U.S.S.R. has refuted in practice the bourgeois legend that the peasantry is incapable of taking the path of socialism.

Political economy draws general conclusions from the historical experience of socialist construction in the U.S.S.R. It shows how a formerly poor and weak country, as pre-revolutionary Russia was, was transformed into a rich and powerful country as the Soviet Union is today. From the treasure-house of Soviet experience the countries of people’s democracy draw knowledge of the proven path of socialist construction, the laws of the class struggle in the transition period, knowledge of how the working class achieves unbreakable friendship and durable alliance with the peasantry, how to consolidate the economic bond between town and country, how to achieve victory over the exploiting class and build socialist society.

In order to make use of Soviet experience it is necessary carefully to take into account the concrete peculiarities of the economic and class relations in each country, determined by the totality of all the historical conditions of its development. In the countries of people’s democracy the building of socialism is taking place in conditions more favourable than those which obtained in the Soviet Union, in as much as at the present time there exists the powerful socialist camp headed by the Soviet Union and the Chinese People’s Republic and an extremely rich store of experience of socialist construction has been accumulated. The decisive condition for the victory of socialism and communism in all countries which have dropped out of the capitalist system is the further strengthening of the power of the socialist camp, the further development of economic, political and cultural collaboration between the countries which have entered this camp.

(4) Political economy teaches that the practical work of socialist construction can be successful only on condition that it is based on the economic laws governing the development of society. Political economy makes it possible to come to know the objective laws of economic development and to use them in the interests of society.

Knowledge of economic laws renders it possible to penetrate deeply into and grasp the essence of economic processes, bringing to light the progressive tendencies of development when they are still in their initial stages, scientifically to foresee the course of economic development and direct it in accordance with the task of building communism. Political economy arms the cadres in the struggle for the victory of the new and advanced over the old and obsolete.

Scientific knowledge of economic laws, derived from the study of political economy, forms the basis of the economic policy of the Communist and Workers’ Parties holding power in the countries of, the socialist camp. Guided by Marxist-Leninist theory, by knowledge of objective economic laws, these Parties are working out and carrying through a policy that is scientifically based and tested in practice, a policy which reflects the requirements for the development of the material life of society and the basic interests of the people; they come forward as the inspirers and organisers of the revolutionary creative power of the masses. Throwing light on the operation of the basic economic law of socialism, political economy guides the cadres in carrying, out their work in accordance with the aim of socialist production—the maximum satisfaction of the material and cultural needs of the people. Political economy reveals the conditions necessary for the uninterrupted growth and improvement of production on the basis of higher technique. It shows that the necessary condition for such a growth of socialist production is the using of the economic law of priority growth of the production of the means of production, the advance of heavy industry, and on that basis the continuous growth of technique, all-round development of science and introduction of the most up-to-date achievements of science and technique into production.

Political economy teaches that the deciding factor in the further progress and all-round development of the national economy is the raising by all possible methods of the productivity of labour in all branches, of production—in industry, transport, agriculture. Without a continuous growth in the productivity of social labour it is not possible to achieve maximum satisfaction of the growing demands of the people. Along the roads of technical progress and growth in the productivity of labour the basic economic task of the U.S.S.R., that of overtaking and outstripping the economically more highly developed capitalist countries, is being fulfilled.

Political economy shows that reliance on spontaneity is profoundly alien to the socialist economic order, that the building of communist society can take place only by the planned control of economy, on the basis of the law of planned development of the national economy and in accordance with the requirements of the basic economic law of socialism. Study of the requirements of the law of planned development of the national economy in the concrete conditions of each particular stage of communist construction helps to maintain the necessary proportionality in the development of the economy, to carry out the correct location of socialist production, and most effectively to utilise material, financial and labour resources.

Political economy reveals the great importance for socialist construction of the material interest of the masses in the steady increase of production resulting from socialist relations of production. Revealing the role and importance of the law of distribution according to work for the development of socialist economy, political economy gives guidance to the cadres in the consistent application, in all branches of the national economy, of differential rewards for labour, directly dependent on its results, and for the elimination of elements of equalitarianism. It shows the role of socialist emulation as a powerful driving force in the economic development of socialist society.

Political economy explains the importance of the skilful use of the law of value, and the economic instruments connected with it, for socialist construction. Understanding of the operation of the law of value under socialism serves the cadres as a most important means of improving methods of production, lowering costs of production, improving economic accounting and increasing the profitability of socialist undertakings, carrying out a materially well-founded price policy, giving material stimulation to the development of collective farm production, developing trade, and perfecting the financial system. Political economy reveals the tremendous possibilities contained in socialist planned economy for conducting a strict regime of economy and increasing socialist accumulation.

Steady growth of the creative activity of the masses in economic and cultural construction is characteristic of the Soviet Union and the countries of people’s democracy. For this reason, ever greater importance attaches to knowledge by the masses of the laws of economic development and the principles of socialist economy. Arming the cadres with the knowledge of economic laws, political economy provides the possibility of more and more successfully, utilising and applying these laws into practice, and thereby raising the efficiency of all work for the building of socialism and communism.

Revealing the reciprocal relations between economic processes, political economy makes it possible for every worker to understand the importance of his activity for the development of the whole socialist system of national economy. It teaches him to understand that, in the conditions of socialism, the interests of the whole people, of the whole State, come before everything else.

(5) Political economy shows that socialism is the most advanced mode of production, having a decisive superiority over capitalism. This fact finds clear expression in the contrast between the basic economic laws of socialism and capitalism, determining two distinct lines of development.

Whereas in the capitalist countries production is subordinate to the law of extracting the maximum profit, dooming the working people to unemployment, poverty and ruin, to blood wars, in socialist society production is subordinated to the interests of man, to the satisfaction of his growing needs.

Whereas in the capitalist countries the rate of growth of production lags far behind the huge possibilities opened out by the present-day level of scientific and technical development, and is periodically interrupted by devastating economic crises, in the countries of socialism planned development of economy is being carried on and a continuous growth of production is taking place, the rate of which considerably exceeds the growth of production in the developed capitalist countries.

In the capitalist world a competitive struggle between countries goes on, with enslavement of some countries by others. Monopoly capital in its unbridled pursuit of maximum profit is striving to bring about an economic re-division of the world and world domination, and this leads to the international situation becoming more acute, to militarisation of the economy and the rise of the danger of fresh wars. In the camp of socialism there are no exploiting classes with an interest in international conflicts and military clashes; the socialist, countries, which have torn up by the root the policy of colonial enslavement and imperialist expansion, are resolutely and consistently fighting for peace, for the relaxation of international tension, for peaceful co-operation and friendship between the ‘M peoples, regardless of the social system of their States. A vivid example of the new, socialist type of international relations is the relationship between the countries of the socialist camp, which is based on the principle of complete equality and mutual advantage, with the aim of bringing about a general economic advance by these countries and the flourishing of their cultures.

In peaceful competition with capitalism, the socialist system of economy proves more strikingly every year its superiority over the capitalist system of economy. At the same time the capitalist system of economy, torn by internal contradictions, is every year showing more clearly its instability and the fact that it is historically doomed.

The magnificent perspective of the progressive development of humanity is classless communist society. Political economy shows the economic conditions of the transition to communism, generalising from the practice of communist construction in the U.S.S.R. It shows that objective laws of social development lie at the basis of the movement of contemporary society to communism. Communism arises as a result of the conscious creative activity of the many millions of working people, led, by the Communist Party armed with the theory of Marxism-Leninism. There exists no force in the whole world capable of holding back the advancing movement of society on the path to communism. The tremendous growth of the forces of democracy and socialism, the sharp aggravation of class contradictions between the. imperialist bourgeoisie, on the one hand, and the working class and working people on the other, the growing sweep of the national liberation movements in the colonies, the powerful movement of the masses of the people and of all progressive forces of contemporary humanity throughout the world against imperialist reaction and preparation of new wars-all this is irrefutable proof of the fact that capitalism has outlived its time and the future belongs to communism.