Group of International Communists

Fundamental Principles of Communist Production and Distribution


Translated and Edited by Mike Baker: published by the Movement for Workers' Councils, London 1990.
Marked up by Jonas Holmgren for the Marxists Internet Archive.

Table of Contents:


The Reproduction Process in General


1. Under Capitalism Reproduction is a Function of the Individual Capitalist Groups

Humanity has fashioned for itself the apparatus of social production as an organ for the satisfaction of its thousandfold needs. The productive apparatus - that is say, the collective means of production - serves human society as a tool with which to wring from nature that which necessary to its existence and higher development. In the course of manufacture, the production process, both our labour-power and the objective apparatus itself, are consumed. Seen in this way, the production process is also a process of destruction, of the using up of resources. But it is simultaneously a process of creation. What has been used up is in the same process born again: machines, tools and our labour-power are consumed and simultaneously renewed, produce and reproduce themselves over and over again. The social production process proceeds like the life process itself in the human body. Through self-destruction to self-renewal in a continuous ever more complex form:

"Whatever the social form of the production process, it has to be continuous, it must periodically repeat the same phases. A society can no more cease to produce than it can cease to consume. When viewed, therefore, as a connected whole, and in the constant flux of its incessant renewal, every social process of production is at the same time a process of reproduction."[1]

For communism, this paragraph acquires an especial significance, because production and reproduction are consciously derived from this principle, whilst in the case of capitalism the process completes itself spontaneously through the market mechanism. Reproduction rests on the fact that, for each product consumed, a new one generally must take its place. In the case of communist society, this means that an exact account must be kept into everything entering the production process. However difficult this may appear to be, it reality it is quite simple, because everything which has been used up and destroyed may be classified under two categories: means of production and labour-power.

Under capitalism reproduction is an individual function. Each single capitalist, the unit of capital, attends to their own reproduction needs. The capitalist takes account of the fixed means of production worn out and used up (machines, buildings), the consumption of circulating means of production (raw materials and auxiliary materials) and the labour-power directly expended. To these are then added supplementary expenditures, such as marketing costs, insurance, etc., and finally the capitalist goes to market with the finished commodities. Should the business be successful, a period of production is therefore successfully concluded. The capitalist now purchases new means of production and new labour-power and production can once again commence anew. Since all capitalists act in the same way, the result is that the entire system of production, together with the labour-power expended, are reproduced. The development of technique, and the increasing productivity of the production system resulting therefrom, compels the capitalists, through competition, to invest a part of their surplus-value in additional capital, in new means of production and in an enlarged productive apparatus. The result is the growth of an ever-mightier productive inventory, the "dead" as well as the "living" parts of the productive apparatus. Thus it is not only those means of production which have been used up and destroyed in the previous production period that are reproduced, but - to use the relevant capitalist terminology - accumulation takes place. The decision as to the scale on which this is to operate and in whose factories it is to be effected is a function of the individual capitalist or capitalist group, whose motives are bound up with the struggle for profit.

Under communism, accumulation is termed reproduction on an extended scale. Here, the market and the transformation of commodities (products) into money are eliminated, but the stream of products remains:

"Within the co-operative commonwealth based on the social ownership of the means of production, the producers do not exchange their products; just as little of the labour embodied in the products appear here as the value of these products, as a material quality possessed by them, since now, in contrast to capitalist society, the individual labour no longer exists as an indirectly but as a directly constituent part of the total labour".[2]

"Here obviously the same principle prevails as that which regulates the exchange of commodities so far as this exchange is of equal values. Content and form are changed because under the changed conditions no one contribute anything except their labour and, on the other hand, nothing can pass into the possession of individuals except individual objects of consumption. But, so as the distribution of the latter among individual producers is concerned, the same principle prevails as in the exchange of commodity-equivalents, i.e. equal quantities of labour in one form are exchanged for equal quantities of labour in another form".[3]

Thus the industrial establishments place their products at the disposal of society. Nevertheless, the latter must for its part supply the factories with new means of production, raw materials and labour-power, in the same quantities which originally entered into production. Indeed, if production on an extended scale is to be achieved, a greater quantity of means of production, etc., must be supplied to the factories. The competent decisions concerning this, however, no longer remain in the hands of private capitalist groups owning means of production, but society as a whole determines the degree to which production is to be enlarged, to the extent that this is required for the satisfaction of social and individual needs. If it is the case that new means of production must be supplied to each factory, in the same quantities as those which have been used up in production, then for reproduction to take place it is necessary and sufficient that each factory calculates how much social product it has used up in various forms (also in the form of labour certificates). These are then replaced in the same quantities, and a new labour period can begin.

If we should ask to what extent it is possible to determine the number of labour-hours used up in each industrial establishment, it is modern cost-accountancy which provides the decisive answer. For reasons that need not be elaborated upon here, capitalist methods of industrial accumulation were compelled, around 1921, to proceed with a thoroughgoing rationalisation, and it was in this way that there appeared, around 1922, an entire new literature concerned with the development of new methods for calculating the exact cost-price for each separate productive process and for each separate subsidiary labour function. This was made up of many factors, such as: quantities of means of production, raw materials and auxiliary materials used up, labour power, and the administrative costs of each separate partial productive process or special partial labour function: transport, social insurance, etc. They are, however, all related to one common denominator: money, and it is this which the industrial administrator sees as a hindrance standing in the way of exact accounting. But nothing stands in the way of converting them into another accounting unit. Also, the formula in its present form is often unstable in conditions of socialised production, because various factors which appear in the cost budget - for instance, interest on capital - would then be no longer relevant. The method itself, however, remains an enduring advance. In this respect also the new society is born within the womb of the old! Leichter writes in respect of modern cost-accountancy:

"Capitalist methods of accounting control can, if introduced into a factory consistently and free of snags, provide exact data revealing the value of any half-produced article, any piece of work still in process of manufacture, or pinpoint the costs of each separate labour operation. They can determine in which amongst many different workshops in a factory, in which amongst many different machines or many different units of labour-power a particular labour operation may be more economically carried out; that is to say, they can at any time be used to increase the highest degree of rationalisation achieved by the manufacturing process. To this must be added yet a further achievement of capitalist accounting methods: in every large factory there are a number of costs and expenses which make no tangible contribution to the exchangeable product." (Meant here are such things as the salaries of officials, heating costs of the workplace, etc. - the Authors) ... "It should equally be counted among the great achievements of capitalist accounting methods that it has enabled these detailed costs to be included in the total works budget."[4]


2. The Formula (P + C) + L = TOTAL PRODUCT (T. PRD)

For this reason it is perfectly possible to impress upon each product how many labour-hours its production has cost. There are, of course, certain installations which produce no tangible product, such as the social and economic councils, the health service, education and so on; but these also are just as well able to determine how many labour-hours in means of production and labour-power they have consumed, so that here also the costs of reproduction can be exactly revealed. Should we wish to make a concise definition of reproduction, then we would say: MEANS OF PRODUCTION AND LABOUR-POWER ARE THE DIRECTLY OPERATIVE FACTORS IN PRODUCTION. IN ASSOCIATION WITH NATURE, THERE ARISES OUT OF THEIR INTERACTION A MASS OF PRODUCTS IN THE USE-VALUE FORM OF MACHINES, BUILDINGS, FOODSTUFFS, RAW MATERIALS ETC. ON THE ONE SIDE, THIS MASS OF PRODUCTS MOVES FROM FACTORY TO FACTORY IN AN UNBROKEN STREAM; AND ON THE OTHER SIDE, IT IS USED UP IN THE INDIVIDUAL NEEDS OF THE CONSUMERS.

Each factory secures its reproduction through an exact accounting of means of production ( = p) and labour ( = L ), expressed in labour-hours. The production formula for each factory is therefore expressed as follows:

p + L = product

As is well known the Marxist category "means of production" comprises machinery and buildings (fixed means of production), and also raw materials and auxiliary materials (circulating means of production). If now we use for fixed means of production the letter p and for the circulating means of production the letter c, then the formula takes on the following form:

( p + c ) + L = product

If for the sake of clarity we now replace the letters by fictitious figures, then production in, for instance, a shoe factory would reveal the following schematic:

( p + c ) + L = product

that is

( machinery + raw material ) + Labour = 40000 pairs of shoes, that is, in labour-hours (L-Hrs)
(1250 L-Hrs + 61250 L-Hrs) + 62500 L-Hrs = 125000 Labour-Hours.

therefore to average:

125000 Labour-Hours
divided by
40000 pairs of shoes
equals 3.125 Labour-Hours per pair of shoes.

In this formula for production, the factory simultaneously finds its formula for reproduction, which shows how many Labour-Hours representing social product must be restored to it in order to renew everything that has been used up.

That which applies for each separate industrial establishment also holds good for the whole communist economy. In this sense, the latter is only the sum of all the economic installations active at any given moment in the economy. The same is also valid for the total social product. It is nothing other than the product ( p + c ) + L for the total of all economic establishments. In order to distinguish this from the sphere of production accounting control for the separate industrial establishments, we use for the total product the formula:

(P + C ) + L = Total Product

If we assume the sum of all used up machinery - ( P ) - in all the industrial installations = 100,000,000 Labour-Hours and that for raw materials - ( C ) = 600,000,000 Labour-Hours; and if also 600,000,000 Labour-Hours of living labour-power - ( L ) - were consumed, then the schematic for total social production would appear as follows:

( P + C ) + L = Total Product
( 100 million + 600 million ) + 600 million = 1300 million Labour- Hours

All industrial installations taken together thus take out of the total social stock 700,000,000 Labour-Hours of product in order to reproduce the physical part of the productive apparatus, whilst the workers consume 600,000,000 Labour-Hours of the final social product. In this way the reproduction of all the production elements is assured.

Let us now consider the reproduction of labour-power in particular. In our example 600,000,000 Labour-Hours are available for individual consumption. More than this cannot and must not be consumed, because in the industrial establishments only 600,000,000 Labour-Hours in the form of labour certificates has been accounted for. This however bears no relation to how that product is to be distributed amongst the workers. It is, for instance, quite possible that unskilled, skilled and intellectual labour will all be remunerated differently. Distribution could, for instance, be carried out on such a basis that the unskilled receive three-quarters of an hour pro rata for each one hour performed, the skilled exactly one hour and the officials and fore-persons three hours.


3. The Concept of Value Held by the Socialist Economists

And indeed, their Excellencies the economists do in fact, consider that distribution should be arranged in this way! It never even occurs to them to place an equal value on labour, that is to say, to apportion to each the same share of the social product. This, of course, is the significance of Neurath's "varying standards of living". The social statisticians determine the minimum standard necessary, to which the income of the "unskilled" workers is then made to correspond, whilst others receive a more generous remuneration according to their industriousness, their capabilities and the importance of their labour. A purely capitalist mode of thought!

Kautsky considers this difference in remuneration to be necessary, because he believes that higher wages should be paid for unpleasant or onerous forms of labour as compared with the more pleasant and lighter tasks. He remarks in passing that, for him, this provides evidence to prove that labour-time accounting is impracticable. In this, indeed, he agrees with Leichter, going so far as to suggest that differences in remuneration should be retained even within each occupation, because, in his view, it would be inevitable that the actual wage paid out to individuals would in certain cases rise above the basic rate in order to take account of the additional training needed by the skilled workers, etc. Those who think like him take, for instance, the view that wage tariffs should be retained in the communist economy. As against this, Leichter notes quite correctly that this does not hinder in any way the introduction of Labour-Hour accounting, a fact which we can also see from our example. He says:

"There exists the purely technical difficulty, which exists also under capitalism, that the wages to be paid for each separate labour function must be separately determined, but this offers no special complications as compared with the method used under capitalism".[5]

Here we see that Leichter considers a differing scale of evaluation of labour, the application of differing rates, indeed variations within the same type of labour, to be in principle correct. This, however, expresses nothing other than the fact that in such a society the struggle for improved conditions of labour has not ceased, that distribution of the social product still bears an antagonistic character and that the struggle for the distribution of the product still continues. This struggle is in reality nothing other than a struggle for power and would have to be conducted as such.

No clearer evidence could be offered than that given above to prove that these 'socialists' are inherently incapable of conceiving of any form of society other than the one in which forms of rule and domination are exercised over millions of workers. For them, human beings have become simply subjects. They are nothing more than parts of the productive apparatus, for whom it is necessary that the social statisticians calculate how much food and other necessities must be supplied to this human material (minimum subsistence standard of living) in order to ensure that labour-power is able to renew itself. The working class must struggle against such a viewpoint with all its strength and demand for all the same share in the riches of society.

Nevertheless, in the first stages of a communist society, it may at first be necessary that various intellectual occupations be remuneration at a higher level; that, for instance, 40 hours of labour gives the right to 80 or 120 hours of product. We have already seen that this represents no difficulty for the method of labour-time accounting. At the beginning of the communist form of society this could indeed be a just measure, if for instance the means of higher education were not available to everyone free of charge, because society is not yet sufficiently thoroughly organised on the new basis. As soon, however, as these matters have been ordered, then there can no longer be any question of giving the intellectual professions a larger share in the social product.

The basic cause underlying the fact that the 'socialist' economists are unable to free themselves from the concept of a varying evaluation of labour-power lies, amongst other things, in the class situation which they find themselves. An equal distribution of the total product totally contradicts their class sense and is for that reason "impossible". That conscious thought-concepts derive in the main from the world of feeling or sensibility is, however, if not exactly an ancient, then at least a correct principle, and for these people as for others the intellect does not in general contradict what the world of feeling dictates. It is this which explains, for instance, how it comes about that Leichter may wish to eliminate the concept of value as it applies to impersonal reproduction, but is unable to free himself from it where the remuneration of labour-power is concerned. In capitalist society labour-power appears as a commodity. The average wage paid by the employer corresponds to the cost of reproducing labour-power which, in the case of unskilled labour, lie more or less at the level of the minimum necessary for existence. The children of unskilled workers are as a general rule unable to learn a profession, because it is necessary for them to commence earning as much as possible as early as possible.[6] This establishes a situation in which unskilled labour reproduces itself only as more unskilled labour-power. For the reproduction of skilled labour-power more is necessary. In this latter case the children are trained for a profession, and this means that the skilled workers have themselves reproduced skilled labour-power. According to Leichter this commodity relationship for labour-power applies under "socialism". He writes:

"Thus labour reveals various qualifications, various intensities of labour. The various qualitatively differing labour-powers require for their reproduction a differing level of investment. Qualified workers require more in order to reproduce their labour-power from day to day or year to year, that is to say, their current expenditures are larger. A greater investment is in general required to train and promote qualified labour up to its completion, up to a standard of a human being with the same replacement level of education and knowledge, if the person formerly bearing the responsibility for this developing labour-power is no longer capable of work. All this must be taken into account in evaluating the values to be attributed to the various labour-powers."[7]

If we now compare this with Marx's analysis of the price of labour-power under capitalism, it then becomes completely crystal clear that the so-called 'socialist' economists are unable to free themselves from the value concept:

"What, then, is the cost of production of labour-power?

It is a cost required for maintaining the worker as a worker and of developing him into a worker."

The less the period of training, therefore, that any work requires, the smaller is the cost of production of the worker, and lower is the price of the worker's labour i.e., the wages. In those branches of industry in which hardly any period of apprenticeship is required and where the mere bodily existence of the worker suffices, the cost necessary for the worker's production is almost confined to the commodities necessary for keeping the worker alive and capable of working. The price of the worker's labour will, therefore, be determined by the price of the necessary means of subsistence.

... In the same way, in calculating the cost of production of simple labour-power, there must be included the cost of reproduction, whereby the race of workers is enabled to multiply and to replace worn out workers with new ones. Thus the depreciation of the worker is taken into account in the same way as the depreciation of the machine:

"The cost of production of simple labour-power, therefore, amounts to the cost of existence and reproduction of the worker. The price of this cost of existence and reproduction constitutes wages. Wages so determined are called the wage minimum."[8]

In exactly the same way as the reproduction of the impersonal part of the productive apparatus is, under capitalism, a function of the individual capitalist group, in a similar way the reproduction of labour-power under that system is an individual function of the worker. Under communism, however, in the same way as the reproduction of the impersonal part of the reproductive apparatus becomes a social function, the reproduction of labour-power becomes a social function likewise. It is no longer made the responsibility of separate individuals, but is borne by the whole of society. Educational attainment, for instance, is no longer dependent on papa's purse, but is dependent solely upon the talents, the mental and physical characteristics, of the child. It would occur to nobody under communism that individuals who by nature have already been equipped with more favourable inherited characteristics or more advantageous inherent capacities, and who for that reason are able to absorb to the fullest degree all the achievements of human society in the fields of culture, art and science, should be additionally awarded a greater share in the social product. Society offers them the possibility of realising achievements above the ordinary in art and scientific knowledge, but only in order that they may return to society, in the form of a more talented and more intense cooperation in all cultural tasks, those values which were originally taken out of society in the form of cultural products. The distribution of the social product under communism is not a simple reproduction of labour-power, but a distribution of all physical and spiritual riches which have been created by society through all its technical and other resources. The aim which 'socialists' of the stamp of Kautsky, Leichter and Neurath are actually seeking to achieve with their principle of "remuneration according to differing living standards" is in reality that of securing for the lower-paid workers the minimum standard of living necessary for existence on the basis of nutritional and other domestic and family assessments, whilst the more highly paid consume the surplus. Their thought is in reality far removed from any idea of the elimination of exploitation. Indeed, they wish to continue exploitation, only this time on the basis of the common ownership of the means of production!

For us the reproduction of labour power can only mean that the social product is equally distributed. In calculating production time, the number of labour-hours expended are entered in their actual quantity, whilst each worker draws out from the social product the actual number of labour-hours the worker has expended.

In that kind of 'socialism' which reflects and is based upon "minimum standard of living" statistics, the producers give up their labour-power to a great undefined authority which is euphemistically called "society". However, wherever this undefined authority actually takes on a tangible form, it appears as an alien force over and against the producers, a force which has elevated itself above them, and exploits them and rules over them. It is in reality domination by and through the apparatus of production, an apparatus which is now a state system in which producers play a role as faceless elements.


Table of Contents



[1] K. Marx: Capital, Vol. I; Penguin Books, p. 711.

[2] K. Marx: Critique of the Gotha Programme quoted in Elementary Textbooks of Communism, Vol. 12, p. 16.

[3] K. Marx: ibid., p. 16.

[4] O. Leichter Die Wirtschaftsrechnung in der sozialistischen Gesellschaft, pp. 22-23.

[5] O. Leichter: ibid, p. 76.

[6] "The children of unskilled workers are as a general rule unable to learn a profession, because it is necessary for them to continue earning as much as possible as early as possible".

Whilst still fundamentally true for the majority of the worlds population, the mode of operation of this particular form of the antagonism between capital and labour has been modified, (in the 'industrialised' countries), to some degree in recent decades, and in particular since the end of World War II, through the introduction of compulsory secondary education and the university grant system. In spite of these reforms, however, the children of the upper and middle classes still dominate the universities and other institutions of higher education.

[7] O. Leichter: ibid, p. 61.

[8] K. Marx: Wage Labour and Capital, Foreign Languages Publishing House, Moscow; pp. 45 - 6.