Monday, August 4, 2008

Part 7. Voznesensky

History of Market Socialism

First published in Irish Communist 1971

Voznesenky's War Economy of the USSR was published in 1948. Like the 1943 article it stated that :

"The commodity in socialist society is free from conflict between its value and use value so characteristic of commodity capitalist society where it springs from private ownership of the means of production" page 97. "The law of value has been transformed in Soviet Economy" (p116). The state plan in the economic system makes use of the law of value to set the necessary proportions in production and distribution of social labour and the social product..

The law of value operates not only in production, but also in the exchange of products.. The law of value operates not only in the distribution of products, but in the distribution of labour itself among te various branches of the Soviet Union' national economy (Page 116-8). But because of its transformed nature it does not give rise to the contradictions of capitalism."

Voznesenky was not an academic economist. He was chairman of the State Planning Commission and was therefore in a position to take action to expand the operation of the transformed law of value in the Soviet economy.

He instituted an "economic reform" in Leningrad area designed to bring industrial production increasingly within the transformed market.The price system had to be changed accordingly.

The policy of allocating subsidies to enterprises in accordance with scale of social priorities was eliminated since it conflicted with the law of value. In order to eliminate subsidies there was a general increase in prices. The system of direct material planning was replaced by a system of indirect "financial planning".

Among Vosnesenky's ablest supporters in the Leningrad economic reform of 1948/9 was Kosygin.

The significance of these developments was not lost on the bourgeoisie. In March 1950 The Economic Journal carried an article on the reforms ( Soviet Planning and the Price Mechanism by Michael Kaser, which said" The conclusion may be advanced that the planning authorities in the Soviet Union have decided to make further use of the price mechanism as an integral feature of their economic planning.. this surely is a lesson for western planners would do well to note. The bourgeoisie was definately pleased with the event.

But things did not go smoothly for the reformers. Kosygin was removed as Minister of Finance. In March 1949 Voznesenky was stripped of all his offical positions. In July 1950 he was executed for passing economic secrets to the USA. The subsidy system was restored. Retail prices were lowered. Direct Planning was resumed.

Voznesensky was rehabilitated by Khruschev in 1956 . In 1963 a biography of him was published in Moscow . A tribute was paid to him in in an article by G. Sorokin in Problems of Economics No 12 1963.

Sorokin said of great interest was Voznesenky's propositions on the function of the law of value, to retail pricing and to profit and loss accounting in a socialist economy.

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