The Economics of Revisionism

Irish Communist Organisation
Preface to 2nd Edition

The "Economics of Revisionism" is an account of a talk given in February 1967 by a member of the I.C.O. to an alliance of anti-revisionist groups in London called the Anti-Revisionist Front. The subjectivist approach which has characterised the British anti-revisionist movement since its inception in 1963 disrupted this alliance late in 1967.

The first edition was published under the title "Revisionism and Imperialism". It was found that this was misleading since it suggested that the subject of the pamphlet was the policies of revisionism with relation to western imperialism, whereas in fact it dealt with the economic nature of revisionism, by which its policies are determined.

Irish Communist Organization, Dec. 1969

Ten years ago the state and prospects of the historical class struggle between the workers and the bourgeoisie appeared like this: a strong united socialist camp existed from central Europe eastwards to the Pacific. A growing socialist world market confronting a weakening capitalist world market; growing national liberation struggles against imperialism; as well as the prospect of a rapid sharpening of the contradiction between the workers and capitalists of the imperialist countries under the pressure of the growth of the socialist world market and of the national liberation struggles - all of this pointed to a very short life expectancy for world imperialism.

Today it would be a deception to present such a picture of the world. While imperialism is still in crisis, and must remain in crisis for as long as it exists, it has survived since the mid-fifties by surmounting the particular situation which faced it with immediate catastrophe then. And it has done this by temporarily liquidating a substantial part of the socialist camp with the weapon of modern revisionism.

We have developed a fairly good understanding of the politics of revisionism over the past three years but we have paid insufficient attention to the economics of revisionism.

Commodities

Marx began Capital with the statement:

"The wealth of those societies in which the capitalist mode of production prevails presents itself as an immense accumulation of commodities, its unit being a single commodity."

Stalin said this about commodities:

"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." (Economic Problems of Socialism in the USSR, p. 22)

A commodity has two aspects: it has a use-value, which means that somebody wants to use it. If nobody wanted to use it there would be no point in anybody producing it. But the use value does not make it a commodity. It is its other aspect, its exchange-value, that makes it a commodity. The use value is the bearer of the exchange value. Commodity production is production for sale.

It has been the opinion of Marxists for a century and a quarter that capitalist production was the highest development of commodity production, of production for sale (and therefore for profit) while socialist production was production for use, and was in contradiction with commodity production. Concerning capitalism and commodity production, Marx wrote in Capital:

"The mode of production in which the product takes the form of a commodity, or is produced directly for exchange, is the most general and most embryonic form of bourgeois production." (Vol. 1, p. 82).

"...the production of commodities does not become the normal, dominant type of production until capitalist production serves as its basis." (Vol. 2. p. 31)

"The fact that (capitalism) produces commodities does not differentiate it from other modes of production; but rather the fact that being a commodity is the dominant and determining characteristic of its products... Furthermore, already implicit in the commodity... is the materialisation of the social features of production and the personification of the material foundations of production, which characterise the entire capitalist mode of production." (Vol. 3, p. 858)

And Stalin:

"Capitalist production is the highest form of commodity production." (Economic Problems, p. 6)
It has also been fundamental to Marxism that the abolition of capitalism meant the abolition of the commodity system:

"The seizure of the means of production by society puts an end to commodity production, and therewith to the domination of the product over the producer." (Engels: Anti-Duhring, p. 311).
"Socialism, as is known, means the abolition of the commodity economy." (Lenin: The Agrarian Question, 1908)

After the October revolution commodity production was not abolished all at once in the Soviet Union. In fact, commodity production grew rapidly for some years after 1921. This was made necessary by the destruction of productive forces in the Civil War. To get production going it was necessary to free commodity production and exchange for a period, while at the same time building up the productive forces owned by the workers' state.

In the late 1920's and early 1930's industrial production was entirely taken over by the workers' state. And, after a period of intense class struggle in the countryside the class of rich peasants was abolished, and the poor and middle peasants, guided by the workers, organised themselves into collective farms. The collectivisation made possible the rapid industrialisation of the Soviet Union in the 1930's. It was also under the dictatorship of the proletariat, a means of guiding the peasant masses towards socialism. However, exchange between the public sector of the economy and the collectives continued to be commodity exchange.

Collectivisation, therefore, did not abolish commodity production. In his last work "Economic Problems of Socialism in the USSR" (1952) Stalin devoted a great deal of attention to this phenomenon. He wrote:

"...at the present time the collective farms will not recognise any other economic relation with the town except the commodity relation - exchange through purchase and sale... 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." (p. 7)

This area of commodity production was something which had to be overcome in the further development of socialism. And when it was overcome, 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." (p. 7)

For a certain period in the development of socialism, commodity production and circulation could play a positive role provided that the dictatorship of the proletariat was upheld and strengthened, provided that the area of socialist production for use was strengthened and expanded, and provided that the level of consciousness of the masses was being raised. But in the long run socialism and commodity production and circulation were incompatible. This Marxist-LeninIst position was clearly stated by Stalin in 1952.

"Stalin's Errors"

The triumph of the anti-Stalinists in the CPSU a few years later led to the following "creative development of Marxism":

"The idea gained wide currency in recent years that commodity circulation is allegedly incompatible with the prospects of going over from socialism to Communism. Such a formulation of the question is wrong. The dialectics of the socialist economy consists precisely in the fact that we shall arrive at the withering away of commodity production and money circulation in the highest phase of Communism as a result of the utmost development of commodity-money relations in the socialist stage of development." (Ostrovityanov, Marxism Today, August 1958)

The idea that capitalist production is the highest form of commodity production, and that socialism involves the abolition of the commodity economy, now becomes one of "Stalin's errors". It is not capitalism, but socialism, which is the highest form of commodity economy. Indeed, the bad thing about capitalist production is not that it is commodity production, production for sale and for profit, but that it hinders commodity production!
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Maurice Dobb (of the CPGB) added his "creative development" in 1961:
"A general question arises here, of some interest to economists at least. As the productive power of a country grows, and the supply of consumer goods becomes more abundant, there is a sense in which the use-value aspect of these goods becomes more important as compared with their aspect as exchange values... This of course is a prospect to be feared by bourgeois economists." (Marxism Today, November 1961)

Here then is a new theory on the abolition of capitalism: if labour productivity under capitalism is raised sufficiently the resulting increased flow of commodities will lead to the exchange value of those commodities (the thing which makes them commodities in the first place) losing its "importance" as compared with "the use value aspect of these goods". According to the revisionist Dobb people will lose interest in exchange value; the intensification of commodity production for sale will turn it into the production of use values, into socialist production. Marx made a little mistake, it seems!

However, no one is making a mistake. When the ideologists of revisionism proclaim the bourgeois counter-revolution in the Soviet Union to be the transition to Communism, and describe socialism as a planned commodity system, it is not that they are "mistaken": they are faithfully serving the bourgeois interest in the class struggle.

The World Market

"The disintegration of the single, all-embracing world market must be regarded as the most important economic sequel of the Second World War... The economic consequence of the existence of the two opposite camps was that the single all-embracing world market

disintegrated, so that now we have two parallel world markets also confronting one another."
"...it follows from this that the sphere of exploitation of the world's resources by the major capitalist countries... will not expand, but contract; that their opportunities for sale in the world market will deteriorate, and that their industries will be operating more and more below capacity. That... is what is meant by the deepening of the general crisis of the world capitalist system in connection with the disintegration of the world market." (Stalin: Economic Problems, p. [?])

Here, we are told by the revisionists, is another of "Stalin's errors". The rise of revisionism, and the expansion of commodity production in the once socialist countries of eastern Europe, have of course brought about a "refutation" of this "error".

This "refutation" is connected with the new theory of the "socialist international division of labour", which "frees the division of labour from the antagonistic form" which it takes under capitalism, and thereby facilitates its greater development. (It has always been held by Marxists that socialism would abolish the division of labour - another of "Stalin's errors" dating back to Marx and Engels).

"In no way does the socialist international division of labour imply autarchy (economic self-sufficiency - I.C.O.) on the side of the socialist camp... It follows from the Leninist principle of peaceful coexistence that the socialist and capitalist economic systems together form a single world economy... And this entity forms the economic base for the peaceful coexistence of the two world systems. The more developed the socialist division of labour, the greater the opportunities for exchange between the two systems...

"The fact that world prices are used as the first basis for price formation on the socialist world market indicates that the socialist and capitalist markets are part of a single world market." (The International Division of Labour, World Marxist Review, December 1958)

And, in fact, for the revisionists and the bourgeoisie there is only a single world market. This does not mean that Stalin was wrong; or that Trotsky was right when he held that socialism must be built within the capitalist world market. It means that revisionism cannot conceal its nature. It is a variety of capitalism.

The "Main Task" in Building Sham Communism

Reading Kosygin's report on, "New Methods of Economic Management" (Report to the Plenary Meeting of the CPSU Central Committee September 27th, 1965) is like reading a bourgeois company report. Even the terminology is identical to that used by bourgeois economists. According to Kosygin the main task in the Soviet Union is the achieving of "rational and economic management of the national economy" (p. 11), and the "rational use of manpower resources" (p. 20). Hence rationalisation is the main problem. Bukharin, who tried to lead the Soviet Union on to the capitalist path over 30 years ago, was the precursor of Kosygin. For him too the task was merely one of "rationalising" production.

What is at the centre of the economic problems of the revisionists? It is this:
"...calculated per rouble of fixed assets national income and industrial output has somewhat declined in recent years... our fixed assets are not sufficiently utilised" (p. 12). There has been a "decrease in output per rouble of fixed capital"... It is important to interest enterprises in... raising not only the sum total of their profits, but also the percentage of these profits in relation to productive assets." (p. 38)

In short we have the old capitalist problem of saving on constant capital in order to increase not only the mass of profit but also the rate of profit. This is a problem of getting the worker to use raw materials and machinery as efficiently and economically as possible.

This is an endless problem for the capitalist because, under capitalism:
"...the labourer looks at the social nature of his labour... at his own combination with the labour of others for a common purpose, as he would at an alien power; the condition of realising this combination is alien property whose dissipation would be totally indifferent to him if he were not compelled to economise with it... Insofar as the means of production in capitalist production processes are at the same time means of exploitation of labour, the labourer is no more concerned with their relative dearness or cheapness than a horse is concerned with the dearness or cheapness of its bit and bridle. The situation is quite different in factories owned by the labourers..."

"The capitalists fanatical insistence on economy in means of production is quite understandable. That nothing is lost or wasted and the means of production are consumed in the manner required by the production process itself, depends partly on the skill and intelligence of the labourers and partly on the discipline enforced by the capitalist for combined labour. This discipline will become superfluous under a social system under which the labourers work on their own account." (Marx: Capital, Vol. 3, pp. 85, 83)

Yet Kosygin's main problem in a society where large scale socialist industry, industry owned by the workers, was established over 30 years ago, is the efficient use of the means of production - the typical problem of the capitalist, whose workers by using the means of production more efficiently only intensify their own exploitation. In a socialist system, where the means of production are owned by the workers, the workers themselves will be continuously on the look-out for ways of using them more efficiently. And every worker knows that, even with the existing means of production, he could expand productivity enormously if it was in his interest to do so: if by doing so he were not at the same time increasing his own exploitation. Kosygin's main problem is the last thing that should be a problem in a society which is in the stage of transition to Communism, as he would have us believe Soviet society is. Why is this?

It is because labour power in the Soviet Union has again taken on the character of "variable capital", which it has in bourgeois society. If this were not the case it would be inconceivable that the main problem in Soviet society should be the efficient use of labour power.

What is Socialism?

The question of the causes and the manner of reversion of Soviet society from socialist to bourgeois is an important one. [Note to 2nd Edition - It is a question which received little serious attention when Soviet revisionism made its first public appearance at the 20th Congress of the CPSU in 1956, and a question which is universally regarded by opportunist "anti-revisionists" as merely "academic." In the anti-revisionist movement as a whole it has become customary to concentrate on the politics of revisionism, thus obscuring the essence of the question. That essence can only be arrived at by thorough Marxist analysis of the political economy and historical development of revisionism; any treatment of the question from any other standpoint must be regarded as a departure from scientific socialism and a retreat into utopianism.] Trotsky, who held that socialism could not be built in Russia, also held that the bourgeois system could not be restored in Russia (except by armed invasion by the capitalist powers). The modern revisionists are restoring the bourgeois system in the Soviet Union while declaring, like Trotsky, that its restoration is impossible.

What do we mean when we say that a country is a socialist country? Essentially we mean that in it labour is the dominant aspect of the contradiction between labour and capital. We do not mean that this contradiction has been eliminated. It exists, but labour has the upper hand. The state represents the interests of labour instead of the interests of capital.

On the day after the capture of political power by the proletariat the society exists "not as it has developed on its own foundations, but, on the contrary, just as it emerges from the capitalist society; which is thus in every respect, economically, morally and intellectually, still stamped with the birth marks of the old society from whose womb it emerges." (Marx: Critique of the Gotha Programme). In the early stages of the proletarian dictatorship even sections of the proletariat remain strongly influenced by bourgeois ideology. Social relationships and ideology have to be consciously reconstructed on a new class basis.

Proletarian revolution does not abolish the class struggle. What it does is capture powerful weapons and positions from the bourgeoisie for the proletariat.
Proletarian dictatorship is not in its first form direct rule by the entire working class. It is, as Lenin said, exercised through the conscious vanguard of the class organised in a revolutionary Marxist party. But one of its most important tasks is to help the entire working class to become politically conscious of itself and of its historical role. If it fails in this task it cannot sustain itself.
In the early stages of socialism inequalities inevitably exist. They are made inevitable by the bourgeois past of society:

"...the first phase of Communism cannot produce justice and equality; differences, and unjust differences, in wealth will still exist, but the exploitation of man by man will have become impossible, because it will be impossible to seize the means of production... as private property. (Lenin: State and Revolution, Ch. 5, Section 3)
The attack on the bourgeois system is not one first and final frontal assault. It is a series of assaults, both frontal and devious, on whatever is the main stronghold of bourgeois power at a given stage in the revolution. The main strongholds are state power, control of production, and ideological dominance. And they must be taken in that order.

Therefore in the early stages of proletarian dictatorship there exist both inequalities and injustices due to the bourgeois and feudal past of society, and strongholds of bourgeois power. Lenin wrote on this point:

"In its first phase or first stage, communism cannot as yet be economically ripe and entirely free from all the traditions and all the traces of capitalism. Hence the interesting phenomenon that communism in its first phase retains 'the narrow horizon of bourgeois right'. Of course bourgeois right in regard to distribution of articles of consumption inevitably presupposes the existence of the bourgeois state, for right is nothing without an apparatus capable of enforcing the observance of the standards of right. Consequently for a certain time not only bourgeois right, but even the bourgeois state remains under communism, without the bourgeoisie!" (State and Revolution, Ch. 5 Section 4)

The supporters of Mao Tsetung's line in China are today being denounced as Trotskyists, petit-bourgeois democrats etc. by opportunists who pose as Marxist-Leninists, because they base themselves firmly on this analysis made by Lenin in State and Revolution.


Two Ways of Raising Labour Productivity

Because substantial strongholds of bourgeois power remain in the early stages of socialism, and because of the intrinsic nature of Communism, it is absolutely necessary in the class struggle under socialism that the consciousness and initiative of the masses should be continually raised: that the masses should become increasingly capable of carrying out the functions of the capitalist, or the specialist managers and specialist intellectuals, in the management of production and in social life as a whole.

"Accounting and control - these are the principal things that are necessary for the 'setting up' and correct functioning of the first phase of communist society... When the majority of the people themselves begin to keep such accounts and maintain such control of the capitalists (now converted into employees) and over the intellectual gentry who preserve their capitalist habits, this control will become universal, general, national; and there will be no getting away from it, there will be 'nowhere to go'... Under socialism much of the 'primitive' democracy will be revived, since, for the first time in the history of civilised society, the mass of the population will rise to independent participation... in the everyday administration of affairs." (Lenin: State and Revolution, ibid.)

Under the proletarian dictatorship "a higher form of struggle against the bourgeoisie" emerges. There is a "transition from the very simple task of further expropriating the capitalists to the much more complicated and difficult task of creating conditions in which it will be impossible for the bourgeoisie to exist, or for a new bourgeoisie to arise." (Lenin: The Immediate Tasks of the Soviet Government, April 1918)

In the last analysis there is only one thing which will prevent the rise of a new bourgeoisie, and that is the conscious socialist activity of the masses. An increase in the productivity of labour is necessary to socialism. The final defeat of imperialism as a world system can only come when socialist production becomes more powerful than bourgeois production. But this is also a class question. The question of the productivity of labour does not stand apart from the class question as the revisionists and Trotskyists hold it does. Productivity must be raised in a certain way: "...socialism calls for a class conscious and mass advance to greater productivity of labour compared with capitalism... Socialism must achieve this in its own way, by its own methods." (Lenin: ibid)

The raising of labour productivity in one way leads to socialism and Communism: the raising of it in another way leads to intensified exploitation. In the long run it is only when it is consciously raised by politically conscious masses that it leads to socialism and Communism.

In the Soviet Union the bourgeois strongholds of state power and ownership of the means of production were captured by the working class. But the bourgeoisie held the stronghold of ideology and culture against the assault made on it by class conscious workers led by Stalin and Zhdanov after 1947, and used it as a base from which to wage the struggle to recapture state power and control of production.

Politics and Economics

What is revisionism? [Chiang Ching, one of the leaders of the cultural revolution in China, says: "Imperialism is moribund capitalism, parasitic and rotten. Modern revisionism is a product of imperialist policies and a variety of capitalism." (Peking Review, No. 50, 1966).] In the British anti-revisionist movement there has been a hesitancy to analyse the social nature of revisionist developments. Some view it as an 'excrescence' on the socialist base which is powerless to change the nature of the base. It is of vital importance to know whether revisionism can change the nature of society from socialist to bourgeois. If it cannot, it is less of a menace than if it can. The most thorough exponent of the view that it cannot, and that the socialist economic base will keep on strengthening itself as long as production rises and keeps the form of nationalised property, even though the state is not composed of the politically conscious vanguard of the working class, was Trotsky.

In 1921 Lenin said that Trotsky did not understand the nature of the proletarian dictatorship. This was amply proven by Trotsky in subsequent years. Trotsky wrote: "In the last analysis a workers' state is a trade union which has conquered power", and on this basis said that just as there can be trade unions which serve the bourgeoisie, so there can be workers' states which serve the counter-revolution. But these 'degenerate workers' states' are powerless to change the 'socialist property relations' on which they are based, i.e. nationalised industry. (The quote is taken from Trotsky's "In Defence of Marxism", 1939/40)
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Following Trotsky, the modern revisionists hold that it is absurd to say that capitalism is developing in the Soviet Union because industry is nationalised and it is not owned by private capitalists. They also assert that expanding commodity production, which is becoming the general form of production, is not leading to capitalism because it is 'planned' and that production for profit is not bourgeois because it is production for 'socialist' profit. For many years the revisionists have been vulgarising the Marxist analysis of capitalism in order to hide their treachery.

In Britain, at least, they have been replacing Lenin's interpretation of 'Capital' with Rosa Luxemburg's. (Though she died the death of a revolutionary Rosa Luxemburg made a number of very serious theoretical mistakes, including a false criticism of Marx's Capital, which were refuted by Lenin.) In their vulgarisation, capitalism equals the ownership of enterprises by individuals. This however, was only the main characteristic of one stage in the development of the system of capitalism.

The system of capitalism is the system of commodity production, production for profit, in which labour power appears as a commodity and which is exchanged against variable capital in the form of wages and salaries.

The central question concerns the nature of the system of production. The ownership of enterprises by individuals is a secondary question. If the latter were the central question then nationalisation of industries would in fact make them non-capitalist. The British coalmines, electricity industry, and railways are not owned by individuals. Shortly the greater part of the steel industry will not be owned by individuals. But the workers in these industries remain wage workers exploited by capital:

"...neither the conversion into joint stock companies nor into state property deprives the productive forces of their character as capital. The modern state is only the organisation with which bourgeois society provides itself in order to maintain the general external conditions of the capitalist mode of production against encroachments either by the workers or by individual capitalists... The more productive forces it takes over as its property, the more it becomes the real collective body of all the capitalists, the more citizens it exploits. The workers remain wage-earners, proletarians. The capitalist relationship is not abolished; it is rather pushed to an extreme." (Engels: Anti-Duhring, p. 307)

Whether state property is bourgeois or socialist depends therefore on the class nature of the state. The Trotskyist argument, which the revisionists are taking up in an attempt to hide their treachery (as Trotsky developed it to hide his), to the effect that the state is a workers' state because it owns the main industries, and that the industries are socialist because they are owned by the state, is gibberish.

The notion that the introduction of planning into commodity production make it socialist was also refuted by Engels three quarters of a century ago in his criticism of the Draft Programme of the German Social Democratic Party (1891). The Draft Programme held that the absence of planning was rooted in the very nature of capitalist private property. Engels said: "Capitalist production by Joint Stock companies is no longer private production, but production in the joint account of many. Not only private production but also lack of planning disappear when we proceed from joint stock companies to trusts which control and monopolise whole branches of industry".

Chen Po-ta, one of the leaders of the cultural revolution in China, wrote: "...there is nothing strange in certain forms of public ownership being tolerated in a particular society which is governed by an exploiting class, so long as they do not harm, and may even help the fundamental interests of that exploiting class... In capitalist society a joint stock company may be considered a kind of capitalist form of 'public ownership' and some workers

Without planning, modern capitalism would very quickly be wrecked by its crisis. It cannot do without planning. But the planning does not abolish the crisis. It only modifies it in such a way that the system can overcome it. Whereas a hundred years ago the capitalist system was healthy enough to let the crisis be overcome by the blind action of economic forces, by the slump which was allowed to follow its own course, today the strength of the working class is such that the capitalists dare not allow the crisis to follow its own course.

Planning has therefore become a necessary part of capitalism and its crisis. Professor Liebermann, a Soviet revisionist economist, tells us through the Morning Star that commodity production as the general form of production is socialist because it is 'planned commodity production'. However we are not so ignorant as not to be able to see that at the present stage in the class struggle, unplanned commodity production is becoming virtually impossible for the bourgeois system.

It is argued that under revisionism labour power is not a commodity and therefore commodity production is not bourgeois in the revisionist countries. But if the state is not proletarian, and if the workers are hired by the state, then labour power is a commodity, and is exchanged against variable capital.

The Capitalist

The view of the capitalist as the individual owner of an enterprise has long been out of date for the dominant forms of bourgeois production. Many thousands of individual owners of capitalist enterprises remain, but this is not the general way in which the biggest bourgeois enterprises are now owned. (The various forms of bourgeois ownership cannot be dealt with here. Marx had this to say about the capitalist: "As a capitalist he is only capital personified. His is the soul of capital." (Capital, Vol. 1, p. 233); "...capitalist - who are actually but the personification of capital." (ibid. Vol. 3, p. 261); "Capital comes more and more to the fore as a social power whose agent is the capitalist." (ibid. Vol. 3, p. 259); and "These (capitalists) are the trustees of bourgeois society, but they all pocket the proceeds of the trusteeship." (ibid. Vol. 3, p. 261). It is capital which is the fundamental thing. Capital is, as Marx continually stressed, a social relationship; on the basis of this social relationship the capitalist can put on a wide variety of disguises.

What is the relation of the Soviet workers to the means of production? The means of industrial production are mainly state-owned. The state has ceased to be a proletarian state. Can the workers own the means of production when the state which owns them is not a workers' state? Of course not. Having lost political power the workers have become dispossessed. The idea that the 'socialist base' can proceed towards socialism even though the state is not a proletarian state does not accord with the reality of socialist revolution. Spontaneous economic development can be nothing other than capitalist development. The relations of production in the Soviet Union today are not socialist but bourgeois. The new Soviet ruling class has been correctly classified by the Communist Party of China as a class of bureaucrat capitalists.

[Note to 2nd edition: An explanation of the relationship of commodity production to private ownership, and a review of revisionist theory on this subject, is given in the I.C.O. pamphlet "Marxism and Market Socialism" (1969). In brief: commodity production is possible only where there is private ownership of the means of production. Without private ownership there is no objective basis for commodity exchange. Group ownership is, in this connection, a form of private ownership. In revisionist countries collective ownership of industrial production by the working class is reduced to a mere legal formula. Industrial production is no longer directly controlled by a state representing the interest of the working class. Control of production is being increasingly fragmented.

The management of each enterprise is becoming increasingly the effective controller of its own production, and in a real sense it sells its product on the market. The market is becoming increasingly a real market made up of more or less independent competing enterprises. (Throughout the Stalin period the substance of the market relationship was being progressively eroded, even though its form remained fairly widespread.)

In revisionist economies production is increasingly being carried on by separate owners (or controllers of production - for all practical purposes the two terms mean the same thing) who engage in real market exchange. These separate owners are, in practice, private owners. Without this private, fragmented, ownership there would be no basis for the strengthening of the market relationship that is going on in the revisionist economies. Commodity exchange can only take place between separate owners.

In this pamphlet "private ownership" is used only in the sense of individual ownership, and the legal recognition of the right of individual ownership. In that limited sense capitalism can dispense with private ownership. But in the deeper sense explained above, private ownership (which includes joint stock companies, bureaucratic groups who control separate enterprises, and syndicalist "workers councils") is essential to the commodity relationship.]


Material Incentives

"...it is proposed to intensify the economic stimuli in production with the help of such indices as price, profit, bonuses and credit. It is necessary to increase the interest of each enterprise in the growth of its production, in increasing incomes and the optimum utilisation of the tremendous wealth - the fixed assets assigned to the enterprise."

"a fund for the material stimulation of the workers will be set up at each enterprise." (Kosygin: New Methods of Economic Management, pp. [?])
"Material incentives are not unknown in capitalist society," but "socialism has smashed the fetters of capitalist distribution, and material incentives have become a powerful and permanently operating condition for the advance of the productive forces." (Socialism and Incentive, World Marxist Review, December, [?])

Behind this surprising statement that material incentives are "not unknown" to capitalism (which is clearly meant to imply that material incentives play a relatively unimportant part in the capitalist system - a system in which the sole motive for production is material gain) is the idea that under capitalism wages do not constitute a share in production. Under capitalism the workers are paid the market value of their labour power and then are made to produce as much as possible by the capitalist. Wages are therefore unrelated to profit. The worker is not stimulated to work harder by the incentive of getting a share of the increased product of his labour.

Marx showed that the fundamental condition for wage labour is that a section of the population is entirely cut off from ownership of the means of production and will starve unless it agrees to sell its labour power to the owners of the means of production. The threat of starvation, which is the fundamental stimulus that causes the proletariat in a bourgeois system of society to work and produce profit for the capitalist class, is a very powerful material incentive. A more powerful material incentive could not be imagined.

The revisionists argue that it is not a material incentive of the same kind that a share in the profits is. They say that positive material incentive of a desire for a share in the profit as distinct from the negative material incentive of averting starvation, can only operate effectively in a socialist system.

However it is only in the early stages of capitalism that the negative material incentive of the threat of starvation is sufficient. As the consciousness of the working class develops, and as the production process becomes increasingly complex, many of the methods of early 19th century capitalism become inadequate.

While the consciousness of the workers in the more developed capitalist societies has not so far been sufficient to enable them to put an end to capitalism, while it has mainly been limited to the essentially bourgeois trade-unionist or social-democratic consciousness, it has still been sufficient to compel the capitalists to change their methods. And the increasing complexity of the production process means that the capitalists are increasingly dependent on the skill, intelligence and initiative of the workers. This means that material incentives of the kind which the revisionists claim can only operate effectively in a socialist system have bean increasingly used by the capitalist system in the 20th century, and especially since World War 2.

The threat of starvation remains the fundamental incentive inducing the workers to sell their labour power. It lies beneath all the more subtle incentives. But the requirements of the production process and the organisation of the workers compel the capitalists to make increasing use of other incentives as well.

It was in these circumstances that the idea of profit-sharing arose in bourgeois societies even before it was introduced into socialist societies by the revisionists of Yugoslavia and later of the Soviet Union. Labour power remains a commodity in these societies, but it cannot now be said that the price of labour power is unrelated to the productivity of labour. Increased productivity is more and more becoming a basis for wage claims under capitalism.

It does not by any means imply a departure from capitalist relationships. The revisionists claim that "material incentives have become a powerful and permanently operating condition for the advance of the productive forces" under socialism shows that, like Mr. Wilson, they think that socialism is a nicer name for capitalism.

That material incentives have a part to play in the development of socialism is undeniable. This was demonstrated by Lenin when Trotsky was propounding the idea of regimenting the workers into building socialism. The need for material incentives in the early stages of socialism is due to the fact that the building of socialism must be begun in a society "which is in every respect, economically, morally and intellectually, still stamped with the birth marks of the old society from whose womb it emerges". (Marx: Gotha Programme)

But as the socialist society develops the use of material incentives should become decreasingly necessary and conscious production for the society should become increasingly the rule. (From the very beginning Lenin stressed the significance of conscious production for the society, whose first expression was the "Subbotnik" (Saturday) movement in which workers worked Saturday for no wages.)

The specific conditions of industrialisation in the Soviet Union (an isolated socialist country with a backward economy, confronted with the virtual certainty of an imperialist invasion within a short period) made the widespread use of material incentives necessary. But even then the use of strong material incentives does not explain the building up of a modern industry in the Soviet Union in the ten years before the Nazi invasion. It could not have been done if there had not been a voluntary, class conscious raising of production for social needs.

It is a very different matter when the use of material incentives begins to be increased in a society in which a modern heavy industry exists and which has over forty years of socialist development behind it. If in such circumstances an increase in the use of material incentives is necessary in order to secure an efficient use of the means of production this must mean that workers have become alienated from the means of production and have no longer a direct interest in using them as efficiently as possible. In these circumstances the increased use of material incentives both reflects a bourgeois development that has already occurred and represents a further bourgeois development.

Bourgeois Right in Distribution under Socialism

Marx showed that inequality would remain in the early stage of socialism, while society under the proletarian dictatorship was ridding itself of the habits and ideology of bourgeois society. The worker would be paid according to his work:

"Here obviously the same principle prevails as that which regulates the exchange of commodities, as far as this is an exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labour, and because nothing can pass into the ownership of individuals except individual means of consumption. But, as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labour in one form is exchanged for an equal amount of labour in another form... Hence equal right here is still in principle -- bourgeois right... this equal right is still encumbered with a bourgeois limitation." (Gotha Programme)

Because men have unequal capacities and exist in different individual circumstances, "This equal right is an unequal right for unequal labour... It is... a right of inequality in its content, like every right". Equality can only exist when all the remnants of bourgeois society have been overcome, when "labour has become not only a means of life, but life's prime want... -- only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs."

In "State and Revolution" Lenin drew a further important conclusion from the fact that bourgeois inequality exists in the early stages of socialist society: "Of course, bourgeois right in regard to distribution of articles of consumption inevitably presupposes the existence of the bourgeois state, for right is nothing without an apparatus capable of enforcing the observance of the standards of right. Consequently, for a certain time not only bourgeois right, but even the bourgeois state remains under communism, without the bourgeoisie." (Ch. 5, Section 4)

The revisionists seize upon the fact that bourgeois right in distribution continues to exist under socialism. They maintain that this right is a basic principle of socialism. Then they "forget" to men#ion that this principle is a bourgeois principle which it is the task of socialism to overcome. And they neglect to mention the fact pointed out by Lenin, that the continuance of this principle under socialism "inevitably pre-supposes the existence of the bourgeois state" in the period of socialism (which clearly indicates that class struggle continues under socialism).

Revisionism focuses attention on the aspects of the bourgeois system which inevitably continue to exist under socialism, and turns these into the "principles of socialism".

But socialism is a period of the revolutionary transformation of the whole of society, in which all traces of the bourgeois system must be eradicated. The remnants of the bourgeois system must be eradicated. In short, the remnants of the bourgeois system which continue to exist in the early stages of socialism are not the "principles of socialism": they are the targets of the proletarian revolution under socialism.

If socialism becomes anything other than a period of revolutionary transformation between capitalism and Communism, it ceases to be socialism. But revisionism turns Communism into a Utopia; into a pious dream: and turns the bourgeois remnants into "principles of socialism." It suppresses revolutionary developments and declares class struggle to be a thing of the past in a period which must be characterised by the most revolutionary class struggles if it is to achieve its aim: Communism - classless society. And revisionism when it becomes dominant thereby changes socialist society into bourgeois society; makes the bourgeoisie once more the dominant aspect of the antagonistic contradiction between capital and labour; and of course prepares the conditions for its eventual overthrow by the revolutionary proletariat.

In the period of socialism the choice always lies between the consolidation of the bourgeois remnants by revisionism, as has been happening in the Soviet Union for over a decade, and the intensification of revolutionary struggle by the masses against the bourgeois remnants, as is happening in China under the guidance of Marxism-Leninism as developed by Mao Tsetung.