Economic catastrophe is sweeping Eastern Europe and the former USSR with the reintroduction of capitalism. It is bringing the rise of racism, reactionary nationalism, and moves to capitalist dictatorship. Stalinism in Eastern Europe, by repelling the working classes from socialism, brought these countries to the brink of disaster. However, the subsequent assault on the working class, and the violent moves of these societies to the right, which have accompanied the re-introduction of capitalism, completely discredited those in the west who believed that the events after 1989 in Eastern Europe - the introduction of capitalist governments - represented a way forward. Instead they confront the working class with the threat of the greatest defeats in its history and the unfolding of a period of unparalleled reaction in Europe - and internationally. In fighting the consequences of this for Eastern Europe and the former USSR the left, above all, needs an economic programme that both opposes the reintroduction of capitalism and is a planned alternative to the course launched by Stalinism. The most important of these historically was Trotsky's economic policy for the Soviet Union - put forward directly against Stalin. This supplement outlines the economic positions of the Left Opposition in the USSR.
Introduction
'The composers of the plan proclaimed that it was their task to 'lift
up the country to a new and hitherto unseen high level of material
and cultural development"... In actuality, the shortage in commodities
has become unbearably acute, the supply of bread has sharply decreased,
meat and dairy products have become rarities... In the midst of newly
constructed factories, plants, mines, electric stations, collective
and Soviet farms, the workers and peasants begin to feel more and more
as if they are in the midst of gigantic phantoms indifferent to the
fate of humans.' Trotsky -Alarm Signal!
The central issue which underlies politics in the former USSR is the
economy. Economic disaster looms for the peoples of the USSR as a result
of the attempt to restore capitalism. Living standards for the majority
of the population have plummeted, the death rate has risen sharply, previously
eradicated diseases have reappeared and domestic manufacturing industry
- particularly the consumer goods sector - has been decimated. While
the peoples of the USSR were told capitalism would bring them a 'consumer
society', the production of consumer goods and agricultrue has been comprehensively
thrown backwards. This article was first published in Socialist Action
in Autumn 1991. Its prognosis - that the reintroduction of capitlism
would devastate those economies, reduce hundreds of millions of people
to poverty and result in steps towards capitlist dictatorship - has been
amply confirmed by events. The text is reproduced in full with only stylistic
corrections.
The inadequacy of mechanisms without content
Confronted with such a scale of issues it is tragic that most left wing
writing on Soviet economic policy in the West is completely inadequate
- either infantile or not really about economics at all. Its typical
feature is to propose mechanisms - 'democratic planning', 'self-management',
'workers control' - without content, ie it does not propose what should
be produced, how it should be allocated, whether the proposed system
of production is internally coherent, how international trade should
be organised and what its long term economic consequences will be.
The most substantial economic problems are not solved simply by saying
that a plan, if there is to be one, should be drawn up democratically,
or that there should be workers control or self-management. Naturally
a plan drawn up undemocratically will be a bad plan - corresponding to
the interests of those who determined it and not society. But merely
stating that a plan be decided democratically, rather than dictatorially
or bureaucratically, does not determine whether it is a good or a bad
plan.
'Self management plus the market?'
The economic views promulgated by those who like to term themselves the
'libertarian left', whose key theme is generally 'self-management',
are equally inadequate.
The economic catastrophe that has affected Eastern Europe and the former
USSR, means that the economic decisions will not primarily be about superior
democratic means of organising production in a functioning economy but
the immediately desperate ones of mass unemployment, poverty, and economic
dislocation. Second, an economy founded on the market, no matter whether
individual units of production take their decisions by capitalist fiat
or by self-management, will arrive at essentially the same allocation
of resources as market capitalism - that is, today, one involving increasing
inequality, poverty, North-South conflict, international exploitation,
and deindustrialisation of Eastern Europe.
The fact that decisions are taken 'democratically' by self-management, instead of by private owners, does not make any significant difference to the allocation of resources in market economies which compete on the basis of profit. Furthermore, in practice 'democratic' forms of taking market decisions will not survive because the allocation of resources decided on the basis of the market will be so demoralising that employees will progressively cease participating. Only if economic decisions can arrive at a different, that is non-market, determination of the allocation of resources will any significant number of people consider it worth bothering to participate in decision making.
The only basis which will sustain a democratic economy therefore is
one which is not market controlled - not in the sense that it does not
contain markets - for reasons discussed below there should be no attempt
to eliminate markets by administrative means on the Stalinist model -
but in the sense that markets are used to regulate priorities which are
set by an economic plan. The central question at stake is whether the
market is the framework of planning (for large firms plan constantly)
or whether the plan is the framework of the market.
Serious left economic debate
The classic exception to 'contentless' left wing economic debate concerning
a major economy is that regarding the USSR in the 1920s and 1930s.
The differences between Bukharin, Preobrazhensky, Stalin, Trotsky and
others did not involve abstract exercises. They were by members of
a party that took the practical economic decisions for the state.
Trotsky, whose views are considered here, was not simply head of the
army during the Post-1917 war of intervention but was a member of the
Supreme Council of the National Economy and chair of its commissions
on foreign concessions, electrification, and industrial technology -
as well as a member of the Politburo and Central Committee of the ruling
party. The economic policies he advocated necessarily involved not just
form but practical priorities.
Trotsky's analysis was so outstanding, so prophetic in its outline of the choices facing the USSR, and what would be the effect of the actual decisions taken, that 60 years later it reads like a description of the contemporary Soviet economy. Furthermore Trotsky's views were the exact reverse of the slanders made by Stalinism. Far from seeking greater 'commandism' he placed greater stress on economic regulation against the administrative methods of Stalinism.
The aim of the present article is to outline the theoretical framework
and principal practical conclusions of Trotsky's analysis of the Soviet
economy - and his alternative to the Stalinist course.
The foundations of a left economic policy
The starting point of Trotsky's economic analysis - which marked it out
from both capitalist and Stalinist positions - was the consistent application
of Marx's starting point that the greatest productive force was the
'collective labourer'. That is the working class was simultaneously
the bearer of a new mode of production and the greatest productive
force within it. It was a concept also brilliantly formulated by Gramsci:
'the new system will lead to an improvement in production - but that
is nothing but the confirmation of one of the theses of socialism;
the more the productive human forces freely organise themselves by
emancipating themselves from the slavery to which capitalism would
have liked to condemn them forever, the better does their mode of utilisation
become - a man will always work better than a slave.'1
From a distorted point of view an understanding of these realities is
arrived at by modern bourgeois economic thought itself. The ability to
rebuild capital rapidly if a trained labour force exists (as in post-World
War 11 Germany), the emphasis on knowledge, information and decentralisation
are all central in modem bourgeois theories of the economy. They are
exemplified in the (personal) computer revolution and the emphasis on
training and education central to most modem bourgeois economies. All
emphasise in their own way that the collective worker, the proletariat,
not 'dead labour', capital, is the greatest productive force.
In such a framework the economic development of the working class must coincide with the development of the new relations of production of which it is the bearer. The problem is how such a collective potential is to break out of the shell which constrains it under capitalism - and Stalinism. The core of Trotsky's economic position therefore, to advance the interest of the working class, the collective labourer, against attacks from both the market and the commandist programme of Stalinist bureaucraticism. The strengthening and improvement of the position of the working class was the core of the development of the productive forces. Such an economic concept coincided simultaneously with the objective of consolidating the political support of the working class for the Soviet state.
As Trotsky put it: 'the most basic 'capital' is the people, ie its strength, its health, its cultural level. This capital requires renewal even more than the equipment of the factories or the peasant implements.2 And: 'The proletariat is the basic productive force in the construction of socialism. Of all the investments, that which is put into the proletariat is the most 'profitable.' 3
As Trotsky noted of both pro-capitalist currents, the Right Opposition (Bukharin) of the 1920s, and the Stalinists: 'not a word is said [by either] about the material, cultural and political situation of the proletariat in its daily and political life. It appears on this field there are no differences between the [Stalinistl centre and the right. But a correct appreciation of the differences between the factions can be obtained only from the point of view of the interests and the needs of the proletariat as a class and of every individual worker.' 4
Instead the approach must be that: 'The proletariat is not only the fundamental productive force, but also the class upon which the Soviet system and socialist construction rest... [They] can have no powers of resistance if its distorted regime leads to the political indifference of the proletariat. The high rate of industrialisation cannot last long if it depends on excessive strain which leads to the physical exhaustion of the workers. A constant shortage of the most necessary means of existence and a permanent state of alarm under the knout of the administration endanger the whole socialist construction.'5
Economic policy, in short, should not be aimed at attacking the working
class, as in both market and Stalinist conceptions, but at developing
its position. Trotsky's genius lay in working through the implications
of such a classic Marxist position into the practical details of economic
organisation.
Key issues in the left's policy
Five immediate conclusions flowed from Trotsky's application of this
Marxist thesis to the concrete circumstances of the USSR.
First, that the restoration of capitalism in the USSR would be a catastrophe
hurling its economy backwards. Therefore on a capitalist basis no democratic
state could be created in the USSR.
Second that the maintenance of a workers state in the USSR was necessary from the point of view of the international struggle for socialism, from the point of view of the development of the productive forces, and from the interests of the Soviet working class itself. The Soviet working class therefore could place itself at the head of all the oppressed in the USSR - and must do so if catastrophe was to be avoided for the Soviet peoples.
Third, that the development of the productive forces to a stage qualitatively superior to capitalism, that is socialism, could only take place on an international economic framework. The theory of socialism in one country was a reactionary utopia.
Fourth, that while political power was taken by the proletariat as a single act, a revolution, the economic reconstruction of society involved an entire epoch of historical development. During that period the guides of commodity economy - prices, supply and demand etc - could not be suppressed by administrative fiat but only progressively outgrown. The working class therefore must lead, not suppress, its potential class allies in the petty-bourgeoisie and peasantry.
Fifth, that the overriding goal of economic policy must be the improvement of the conditions of the working class and the gaining of its support for socialism. The framework, and chief measure, of economic success was therefore not abstract 'maximum' economic growth but the degree of sustainable improvement of the living standards of the working class. Or as Trotsky put it: 'The tempo of industrialisation must guarantee, not the building of national socialism, but... the improvement of the conditions of the working masses of the city and countryside.'6. We will outline these points in order, starting with the most fundamental theoretical and international foundations of Trotsky's policy and proceeding to the most detailed questions.
1. The foundations of Trotsky's economic policy
Defence of the USSR
The starting point of Trotsky's analysis of the Soviet economy flowed
from his analysis of the October revolution itself. The core of Trotsky's
position was that neither the Russian revolution, nor the development
of any country, could be understood in isolation but only from the point
of view of its position in the world economy. The common starting point
of Stalin, Bukharin, and the Mensheviks was to rip the Russian economy
out of its relation to the world economy and to consider it via the concept
of an isolated economy - something which could not exist in reality.
The correct starting point must not be a concept of a non-existent isolated
capitalism but the reality of an international economy.7 This point of
departure of Trotsky has, of course, acquired a double significance today
when the internationalisation of the world economy has risen to a far
higher level even than when he wrote.
Why the Russian revolution occurred
The Russian revolution occurred not because an 'isolated ' Russia was
ripe for socialism but because an isolated Russia did not, and could
not, exist. As Trotsky noted in the Revolution Betrayed: 'Russia took
the road of proletarian revolution, not because her economy was the first
to become ripe for socialist change, but because she could not develop
further on a capitalist basis. Socialisation of the means of production
had become a necessary condition for bringing the country out of barbarism.'8
Without the maintenance of the planned economy Russia, and the USSR,
would be thrown backwards between the pressure of the imperialisms of
the United States, Germany and Japan.
More generally the formula: 'No social formation disappears before all
the productive forces have developed for which it has the room' - takes
its departure...not from the country taken separately, but from the sequence
of universal social structures (slavery, medievalism, capitalism). The
Mensheviks, however, taking this statement from the point of view of
the single state, drew the conclusion that Russian capitalism has still
a long road to travel before it will reach European or American levels.
'But productive forces do not develop in a vacuum! You cannot talk of the possibilities of a national capitalism and ignore ... its dependence upon world conditions ... The structure of industry, and also the character of the class-struggle in Russia were determined to a decisive degree by international conditions...'A correct appraisal of our revolution,' said Lenin, 'is possible only from an international point of view.' ...World development forced Russia out of her backwardness... Outside the web of this development, her further destiny cannot be understood.'9
If the October revolution had not taken place Russia would have been
dismembered, during or after World War 1, between a German sphere of
influence in the West and a Japanese sphere of influence in the East.
That would remain its fate today.
Planned economy and national independence
Trotsky understood, therefore, that the same international forces which
had produced the Russian revolution ensured that the restoration of
capitalism in the USSR would destroy its economy and submit the country
to de facto domination by foreign powers. It was, indeed, because 'socialisation
of the means of production' had become a necessary condition for bringing
the country out of barbarism' that so many who were not socialists
in Russia had rallied to the October revolution and the Soviet state
after 191 7. As Trotsky said: 'The Soviet system with its nationalised
industry and monopoly of foreign trade, in spite of all its contradictions
and difficulties, is a protective system for the economic and cultural
independence of the country. This was understood even by many democrats
who were attracted to the Soviet state not by socialism but by a patriotism
which had absorbed some of the lessons of history. To this category
belonged many of the forces of the native technical intelligentsia,
as well as the new school of writers.'10
The overthrow of the planned economy, therefore, would lead to Russia
being reduced to the status of a semi-colonial state - a Mexico or Brazil.
This flowed inevitably from the non-possibility of an isolated national
capitalism and from Russia's position in the international imperialist
chain. As Trotsky noted: 'What is involved [in the restoration of capitalism]
... is not the introduction of some disembodied democracy but returning
Russia to the capitalist road. But what would Russian capitalism look
like in its second edition? ... A capitalist Russia could not occupy
even the third rate position to which Czarist Russia was predestined
by the course of the world war. Russian capitalism today would be a dependent,
semicolonial capitalism without any prospects. Russia Number 2 would
occupy a position somewhere between Russia Number I and India.11
The error of those who failed to understand this reality of capitalist restoration in Russia was that they looked at the Soviet state in isolation - without considering its real position in the international capitalist economy: 'a return to capitalism would now mean...that Russia would again become part of the chain of imperialism, having the clearly understood status of a subordinate link - that is, on a semi-colonial status ... the development of the productive forces in our country would be retarded in the extreme. In other words, Russia would not take its place alongside the United States, France and Italy but would fall to the some category as India and China ... The reactionary character of Menshevism and the Otto Bauer school is that they think of Russia in terms of 'capitalism in one country' rather than examine the fate of a capitalist Russia in the light of international processes.' 12
The standard of living of the Russian workers would therefore fall far lower under capitalism than under the planned economy: 'the bourgeoisie and the Social Democracy scare the workers ... [by] citing the comparative living standards of the workers without regard to the development of the productive forces. It is in response to this basic argument of the Social Democratic scoundrels against the USSR ... that we assert: the workers of a bourgeois Russia, with the same level, would never have had a living standard as high as they have now, despite all the mistakes, miscalculations and departures from the correct line.'13
The defence of the USSR as a workers state, that is from the angle of
the international interests of the proletariat, was therefore also directly
in the interests of Soviet peoples themselves. As Trotsky put it: 'The
fall of the present bureaucratic dictatorship, if it were not replaced
by a new socialist power, would thus mean a return to capitalist relations
with a catastrophic decline of industry and culture.' 14 'Without a planned
economy the Soviet Union would be thrown back for decades.'15
Opposition to the restoration of capitalism
From this conclusion directly flowed Trotsky's unshakeable position,
maintained until his death, that no matter what the crimes of Stalin,
the Soviet Union must be defended and any restoration of capitalism
must be opposed. This was not a matter of covering up for Stalin but
of the most direct interests of the Soviet workers: 'It is one thing
to solidarise with Stalin, defend his policy, assume responsibility
for it - as does the triply infamous Comintern - it is another to explain
to the world working class that no matter what crimes Stalin may be
guilty of we cannot permit world imperialism to crush the Soviet Union,
re-establish capitalism and convert the land of the October Revolution
into a colony. This explanation ... furnishes the basis for our defence
of the USSR.' 16
On a wider field the overthrow of the USSR would lead eventually to a
new war to determine a fresh imperialist division of the world: 'the
crimes of the Kremlin oligarchy do not strike off the agenda the question
of the existence of the USSR. Its defeat ... would signify not merely
the overthrow of the totalitarian bureaucracy but the liquidation of
the new forms of property, the collapse of the first experiment in planned
economy, and the transformation of the entire country into a colony;
that is, the handing over to imperialism of colossal natural resources
which would give it a respite until the third world war.'17
The impossibility of bourgeois democracy in the USSR
On the political field, given that capitalist restoration would involve
a vast regression of the productive forces, living standards would
be thrown back, and Russia would be transformed into a semi-colony,
there was no basis for bourgeois democracy in Russia. A restored capitalism
in Russia would inevitably be a dictatorship. Trotsky noted: 'what
is absolutely excluded is a transition from the Soviets to parliamentary
democracy .. The very same causes that prevented our weak and historically
belated [bourgeois] democracy from carrying out its elementary historical
task will also prevent it in the future from placing itself at the
head of the country. There is a handful of impotent doctrinaires who
would like to have democracy without capitalism. But the serious social
forces that are hostile to the Soviet regime want capitalism without
democracy.'18
The restoration of capitalism in Russia would therefore mean a new era
of reactionary capitalist dictatorship in the USSR, with regression of
its productive forces, and the throwing back of the entire position of
the working class internationally and domestically. The very forces that
had created the Russian revolution determined its defence, both for the
interests of the Soviet and international working class.
Socialism in one country
The international nature of capitalism, and Russia's place within it,
in turn determined the error represented by the theory of 'socialism
in one country'. This concept was introduced by Stalin and, in various
guises, provided the basis for Soviet economic development from Stalin
until Gorbachev.
The concept introduced by Stalin was the possibility to create a superior
development of the productive forces to capitalism - for that is what
a developed socialist society means - on the basis of one country. In
Stalin's own formula: 'What is meant by the possibility of socialism
in one country? ... It means ... the possibility of the proletariat seizing
power and using that power to build a complete socialist society in our
country, with the sympathy and support of the proletarians of other countries,
but without the preliminary victory of the proletarian revolution in
other countries.'19 This perspective of the ability to create a complete
socialist society within a single country found its most ludicrous formulation
in Khrushchev who proclaimed that even Communism (and by 1980!) could
be constructed in the USSR!
Such a 'theory' found the semblance of rationality in projecting the growth rate of the Soviet economy during the first Five Year Plans forward into the future without any consideration of the bases on which economic development could take place or the constraints that would become more pressing as the Soviet economy developed. Trotsky wrote the decisive rebuttal of such positions: 'the mistrustful and short sighted "practicals', who formerly thought that the proletariat of backward Russia could not conquer power .. have taken subsequently exactly the opposition position. The successes attained against their own expectations, they have simply multiplied into a whole series of Five Year Plans, substituting the multiplication table for a historic perspective. That is the theory of socialism in one country.
'In reality the growth of the present Soviet economy remains an antagonistic process. In strengthening the workers' state, the economic successes are by no means leading automatically to the creation of a harmonious society. On the contrary, they are preparing a sharpening of the contradictions of an isolated socialist structure on a higher level.
'The world-wide division of labour stands over the dictatorship of the proletariat in a separate country, and imperatively dictates its further road. The October revolution did not exclude Russia from the development of the rest of humanity, but on contrary bound her more closely to it.'20
The programme of socialism in one country was characterised by Trotsky,
in precise terms, as a 'reactionary utopia' 21 His implacable opposition
to it - he stated in his critique of the draft programme of the Communist
International that 'the manner in which the question of socialism in
one country is solved determines the entire draft as a Marxian or a revisionist
document' - was not motivated by internationalist romanticism or adventurism
but by the most sober economic analysis .22
The international division of labour
The error of the programme of socialism in one country was its failure
to grasp that, although the dictatorship of the proletariat may be
created in a single country, it is not possible, on the basis of the
resources of one country alone, to create a development of the productive
forces superior to capitalism.
It failed to understand that even: 'the productive forces of capitalist
society have long ago outgrown the national boundaries.' And therefore:
'to aim at building a nationally isolated socialist society means, in
spite of all passing successes, to pull the productive forces backward
even as compared with capitalism.23
Socialism must necessarily be constructed on a far higher development of the productive forces than capitalism. From the fact that, 'The productive forces are incompatible with national boundaries' followed: 'the economic impossibility of a self-sufficient socialist society... Socialist society... can be built only on the most advanced productive forces... how then can socialism drive the productive forces back into the boundaries of a national state which they have violently sought to break through under capitalism?'24
An attempt to create an isolated socialist society in one country would
simply mean pulling back the productive forces: 'The productive forces
of our time have outgrown ... the boundaries of national states ... The
proletarian revolution is directed both against private property in the
means of production and against the national splitting up of a world
economy ... The creation of a national socialist society, if such a goal
were in a general way attainable, would mean an extreme reduction of
the economic powers of men. But for that very reason it is unattainable.'25
Internationalisation and the advance of the Soviet economy
Trotsky noted that, given that the higher the development of the productive
forces the greater their internationalisation, the advance of the Soviet
economy would not lead to a lessening of its need for internationalisation
but to far greater pressure in that direction: 'The international division
of labour and the supranational character of modern productive forces
not only retain but will increase twofold and tenfold their significance
for the Soviet Union in proportion to the degree of Soviet economic
assent.26 In short: 'The universal division of labour is not a circumstance
that we can afford to ignore. We can only accelerate our own development
in all fields by expediently utilising the means arising from it.'27
As he wrote in 1930: 'The greater the success of the development of the
Soviet economy in the future, the more extensive foreign economic relations
will have to be. The contrary theorem is even more important: it is only
through a growing extension of exports and imports that the economy will
be able to overcome in time the partial crises, to diminish the partial
disproportions, and to balance the dynamic equilibrium of the various
sectors in order to assure an accelerated rate of development.'28
Indeed at the most fundamental level, just as 'medieval particularism
hindered the development of capitalism in its youth, so now at the peak
of its development capitalism is strangling in the limits set by the
national states. Socialism cannot confine productive forces in the procrustean
bed of national states. The socialist economy will develop on the basis
of an international division of labour, the mighty foundations of which
have been laid down by capitalism.'29 ' The crisis of the capitalist
system is produced not only by the reactionary role of private property
but also by the no less reactionary role of the national state.'30 This
was not a flight of revolutionary rhetoric but a strictly objective assessment
of the economic situation.
A classic Marxist analysis
In making the analysis that the greater the development of the productive
forces the greater their internationalisation, Trotsky was not presenting
a new theory. He was simply reasserting, in contemporary terms, the
analysis of Marx who had already noted in the Communist Manifesto that:
'The need for a constantly expanding market for its products chases
the bourgeoisie over the whole surface of the globe. It must nestle
everywhere, establish connexions everywhere. The bourgeoisie has through
its exploitation of the world market given a cosmopolitan character
to production and consumption in every country. To the great chagrin
of the Reactionists, it has drawn from under the feet of industry the
national ground on which it stood .'31
Strictly speaking, the theory of 'socialism in one country', of Stalin
and his successors, did not even reach the level of bourgeois political
economy. The founding work of classic bourgeois economy, Adam Smith's
The Wealth of Nations, had been designed to show that countries should
not seek to be self-sufficient but should base themselves on an international
economy.32 Such a division of labour was necessarily international.
From the internationalisation of the productive forces, the international division of labour, it was therefore impossible to construct 'socialism in one country' even in an advanced country - let alone the USSR. As Trotsky noted: 'To be sure, all other conditions being equal, the more highly developed productive forces [of an advanced capitalist country] are of enormous advantage for the purposes of socialist construction ... But the building of socialism on a national basis would imply for these countries a general decline, a wholesale cutting down of productive forces, that is to say something directly opposed to the tasks of Socialism.'33 'To attempt... to realise a shut off proportionality of all the branches of the economy within a national framework means to pursue a reactionary utopia.'34
Therefore, instead of an attempt to construct socialism in one country it was instead necessary to attempt to insert the socialised economy of the USSR as far as possible into the world economy - against the inevitable resistance the imperialists would put up to this. As Trotsky noted: 'The problem of the disproportionality of the elements of production and the branches of the economy constitutes the very heart of socialist economy .. Major and minor disproportions make it necessary to turn to the international market. Imported goods to the value of one chervonet [a gold monetary unit] can bring domestic production out of its moribund state to the value of hundreds and thousands of chervontsi.
'The general growth of the economy, on the one hand, and the sprouting
up of new demands and new disproportions, on the other, invariably increase
the need to link up with the world economy. The program of "independence," that
is, of the self-sufficient character of the Soviet economy, discloses
more and more its reactionary, and utopian character. Autarchy is the
ideal of Hitler, not of Marx and Lenin'.35
The Platform of the Left Opposition
The reality facing Russia and the Soviet states was therefore clear.
The restoration of capitalism would hurl back their economies. At the
same time the attempt to construct a self-enclosed 'socialist' economy
was impossible and would throw back the productive forces. The only
way forward for the USSR was to fight for its greatest possible integration
into the world economy on the basis of a planned and socialised economy.
This dictated on the international field the some choice as on the
domestic one - that is to advance the positions of the working class
against both capitalist restoration or Stalinism, which, by a different
method, was also an economic blind alley. Trotsky outlined this choice
clearly in the Platform of the Left Opposition - the most widely circulated
document of the left opposition:
'In the long struggle between two irreconcilably hostile social systems
- capitalism and socialism - the outcome will be decided in the last
analysis by the relative productivity of labour under each system ...
It was this fundamental fact that Lenin had in mind when in one of his
lost speeches he warned the party of the 'test' that would be imposed
'by the Russian and international market, to which we are subordinated,
with which we are connected, and from which we cannot isolate ourselves.'
'For that reason, Bukharin's notion that we proceed towards socialism at any pace, even a 'snail's pace', is a banal and vapid petty-bourgeois fantasy. We cannot escape from capitalist encirclement by retreating into a nationally exclusive economy. Just because of its exclusiveness such an economy would be compelled to advance at an extremely slow pace, and in consequence would encounter not weaker, but stronger pressure, not only from the capitalist armies and navies ("intervention"), but above all from cheap capitalist commodities.
'The monopoly of foreign trade is a vitally necessary instrument for socialist construction, under the circumstances of a higher technological level in the capitalist countries. But the socialist economy now under construction can be defended by this monopoly only if it continually comes closer to the prevailing levels of technology, production costs, quality and price in the world economy.
'The aim of economic management ought to be not a closed-off, self-sufficient economy, for which we would pay the price of an inevitably lower level and rate of advance, but just the opposite - an all-sided increase of our relative weight in the world economy.. '36
Instead of 'socialism' in one country Trotsky stated: 'The orientation towards the isolated development of socialism and a rate of development independent of the world economy distorts the entire perspective, throws our planning efforts off the track, and fails to provide any guideline for correctly managing our relations with the world economy. As a result we have no way of deciding what to manufacture ourselves and what to bring in from the outside.
Firm rejection of the theory of an isolated socialist economy would mean, even in the next few years, an incomparably more rational use of our resources, a swifter industrialisation, and increasingly well-planned and powerful growth of our own machine industry. It would mean a swifter increase in the number of employed workers and a real lowering of prices - in a word a genuine strengthening of the Soviet Union despite capitalist encirclement.'37
Instead of orienting towards self enclosed, autarchic, development the
USSR should orient to the greatest possible extent to the international
economy: 'The Soviet economy depends upon the world economy. The dependence
is expressed through exports and imports. Foreign trade is the biggest
bottleneck in the entire Soviet economic system.'38
The military threat to the USSR
In particular Trotsky foresaw that the more the productive forces advanced,
and become internationalised, the more the programme of socialism in
one country would become disastrous even from a military point of view
- a fact anyone considering the 1980s arms race against the USSR should
well understand. He noted in 1926: 'The advance towards socialism con
only be assured if the distance separating our industry from advanced
capitalist industry - in volume of production, cost-price, and quality
- diminishes in a palpable and evident way, rather than increases.
Only on this condition can our armed forces be given the technical
base capable of protecting the socialist development of the country.'39
Only economic development, not autarchy, could secure the military defence
of the USSR. Stalin's attempt to create autarchy, instead of orienting
to the world economy, in the long run undermined even the military defence
of the USSR by creating economic backwardness. As against those who argued
for socialism in one country on the basis of defence needs Trotsky noted:
'The argument as to the dangers of war or blockade after we have 'grown
into' the world market might perhaps seem somewhat farfetched and abstract.
For, in strengthening us economically, the international exchange in
all its forms also strengthens us for the eventuality of a blockade or
a war.
'There is no doubt that our enemies may still desire to put us to this test. But, on the one hand, the more varied our international economic relations become, the more difficult our potential enemies will find it to disrupt these relations. And, on the other hand, if this thing should nevertheless come to pass, we shall give a far better account of ourselves than would be possible in the case of an isolated and therefore retarded development.
'We may learn a little in this connection from the historical experience
of bourgeois countries. Germany had developed a tremendous industry by
the end of the nineteenth and the beginning of the twentieth century,
and became an extremely active force in the world economy by reason of
this industry. Its foreign trade and its relations with foreign ... markets
developed to huge proportions within a short period. The war put an abrupt
end to this situation. By reason of its geographic position, Germany
was forced into an almost complete economic isolation from the first
day of the war. And yet the entire world was then made to understand
the extraordinary vitality and endurance of this highly industrialised
country. The preceding struggle for sales markets had developed an unusual
elasticity in Germany's productive apparatus, which it then proceeded
- during the war - to utilise, in the now constricted field, to the last
penny.'40
The Five Year Plans
The dead end, the 'reactionary utopia', represented by the programme
of socialism in one country meant that Trotsky understood that whatever
short term successes were produced by the system of Five Year Plans
introduced under Stalin they could not solve the strategic problems
of the Soviet economy.
Planning, by itself, could not solve the problems of the Soviet economy.
This could only be achieved by planning carried out within a framework
that oriented to the international extension of socialism and not the
attempt to construct socialism in a single country. This Stalin rejected.
This strategic framework determined everything.
Despite the economic growth produced by the first Five Year Plan, Trotsky, therefore, rejected any political adaptation to Stalin - because the programme of socialism in one country would inevitably lead the economy into a blind alley both internationally and domestically. Trotsky outlined this fundamentally criticising Preobrazhensky, who had formulated the laws of Soviet economic planning as being 'the planning principle versus the market principle', and who therefore capitulated to Stalin with the launch of the first Five Year Plan: 'The analysis of our economy from the point of view of the interaction (both conflicting and harmonising) between the law of value and the law of socialist accumulation is in principle an extremely fruitful approach - more accurately, the only correct one.
'Such analysis must begin within the framework of the closed-in Soviet economy. But there is a growing danger thot this methodological approach will be turned into a finished economic perspective envisaging the 'development of socialism in a single country'. There is reason to expect, and fear, that the supporters of this philosophy .. will try to adapt Preobrazhensky's analysis by turning a methodological approach into a generalisation for a quasi-autonomous process.
'It is essential, at all costs, to head off this kind of plagiarism and falsification. The interaction between the law of value and the law of socialist accumulation must be placed in the context of the world economy. Then it will be clear that the law of value that operates within the limited framework of the NEP is complemented by the growing external pressure from the law of value that dominates the world market and is becoming ever more powerful...
'The monopoly of foreign trade is a powerful factor in the service of socialist accumulation - powerful but not all-powerful. The monopoly of foreign trade can only moderate and regulate the external pressure of the law of value to the extent that the value of Soviet products, from year to year, comes closer to the value of the products on the world market ... But in the context of the world competition between economic systems, the requirement above remains in full force - that is, the rate of Soviet industrialisation must be such as to assure that Soviet products approximate those on the world rnarket in a way perceptible to our workers and peasants.'41
The conclusion which Trotsky drew was that the international policy of the USSR, the necessity to break the international constraint on the Soviet economy and to extend the new non-capitalist relations of production, was the most important of all issues: 'the way out of those contradictions which befall the dictatorship of the proletariat in a backward country will be found in the arena of world revolution ... world socialist economy will not at all be a sum total of national economies. It can take shape in its fundamental aspects only on the soil of the world division of labour which has been created by the entire preceding development of capitalism.'42
The most decisive of all issues for the USSR was therefore its foreign
policy and the necessity to break its international isolation by the
expansion of socialism: 'A correct domestic policy in the USSR is inconceivable
without a correct policy for the Comintern. Therefore, for us, the question
of the Comintern's line, that is the strategic line of the international
revolution, stands above all other questions.'43 This was because: 'Internationalism
is not an abstract principle but the expression of an economic fact.
Just as liberalism was national, so socialism is international. Starting
from the worldwide division of labour, the task of socialism is to carry
the international exchange of goods and services to its highest development.'44
2. The central choice in the Soviet economy
From the fact that it was not possible to resolve all contradictions
within the Soviet economy on the basis of the economy of one country,
however, did not follow that nothing could be done in the USSR itself.
Quite the contrary, from the difficulties it flowed that everything
possible should be done. The point was simply that socialism in one
country and the classic Marxist analysis outlined by Trotsky led to
diametrically opposite conclusions as to what should be done. As Trotsky
noted: 'In general, within the boundaries of a single nation, it is
impossible to completely overcome the difficulties resulting from the
delay in the world revolution. This should be said clearly, firmly
and honestly, in a Marxist and Leninist way. But although the fate
of the revolution is a function of its international character, it
does not follow that the party in each country is relieved of the duty
to do the maximum in all areas. On the contrary, this obligation only
increases, because the economic errors made in the USSR not only retard
the building of socialism in our country, but strike in the most direct
way at the world revolution.'45
He noted: 'A [genuine] left course could not promise to build 'full socialism'
by our efforts alone. It could not even promise a complete triumph over
the contradictions within the country, as long as world contradictions
exist. But it could gradually establish more correct control over the
domestic class contradictions - more correct from the standpoint of socialism
under construction. It could quicken the rate of growth, through a more
correct policy of distributing the national income. It could consolidate
in a more systematic and serious way the proletariat's hold on the commanding
heights of the economy.'46
Above all what was at stake was the goals of economic growth. In the Stalinist programme economic growth was to lay the basis for a future socialist society created in one country. From the approach of Marxism and of Trotsky this was impossible. The aim, instead, must be to improve the living standards of the working class to consolidate its support for the Soviet state, increase its attractiveness to the international working class, and thereby create the best base for the international extension of socialism. Or as Trotsky put it: 'The tempo of industrialisation must guarantee, not the building of national socialism, but the reinforcement of the foundation of the proletarian dictatorship and the improvement of the conditions of the working masses of the city and countryside.'47
The core issue was that economic policy within the USSR must be dictated
not by the utopian goal of constructing socialism in one country but
by the most rapid sustainable rise in the living standards of the working
class. The 'reactionary utopia' of socialism in one country directly
cut across this.
The domestic consequences of socialism in one country
The programme of socialism in one country was, in reality, no more neutral
in its effect than in its international policy. It dictated a thoroughly
wrong allocation of resources within the Soviet Union - and its economic
consequences directly undermined the political support of the working
class for socialism. The economic project of 'socialism in one country'
directly strengthened reaction. As Trotsky put it: 'Theoretically,
politically, and psychologically, the idea of the five year plan has
become for the masses the problem of the construction of a Chinese
wall around socialism in one country. The workers find this the only
justification for the extreme tension imposed on them by the party
apparatus.'48
As soon as it became clear that such a project of socialism in one country
could not possibly succeed there would inevitably be a violent reaction
against the senseless privations the masses had been asked to endure
in its name. As Trotsky noted: 'It is obvious that if it were really
a question of outstripping the advanced capitalist countries in the next
few years and in this way insuring the invulnerability of the socialist
economy, then temporary pressure, however wearing on the workers, would
be understandable and justifiable. But we have seen the ambiguity, deceit
and demagogy with which this question is presented to the workers. The
continuous pressure threatens to provoke a reaction among the masses
incomparably graver than the one that developed at the end of the civil
war.'49
Indeed, as an inevitable consequence of socialism in one country, Soviet
reality was painted in a light that not only was palpably untrue but
which would demoralise the masses. 'False theory inevitably brings mistakes
in policy. From the false theory of socialism in one country" flows
not only a distorted general perspective, but also a criminal tendency
to paint up the present Soviet reality.'50 We will consider these issues
point by point.
Light and heavy industry/consumer services
The first, and most central, issue concerned in the ability, or otherwise,
to build socialism in one country was that it directly dictated both
the type and tempo of economic growth which was aimed at in the USSR.
If it were conceived that socialism could be constructed in a single
country, the USSR, then the foundation had to be laid in the present.
Given the nature of productive processes this meant that, in a self-enclosed
economy, absolute priority must be given to heavy industry - in order
to produce refrigerators it is necessary to have steel, in order to
produce consumer goods there must be machine tools, to run industry
electricity must be produced. Indeed for a socialist society, with
a higher development of the productive forces than capitalism, quantities
of such resources even exceeding capitalist society would be required.
The conception of building socialism in one country therefore led, necessarily,
to a total priority on heavy industry - coal mines, steel plants, dams
etc. - so characteristic of first Soviet and then East European economies.
These were conceived as laying the foundations of the future socialist
society constructed in one country.
Such an absolute priority to heavy industry, in turn, necessarily meant diverting resources from other sectors. It meant that consumer services, housing etc. would be produced to a much lesser extent than possible - producing exactly the superfluity of heavy industry and shortage of every type of consumer goods and services which became typical in Eastern Europe.
Indeed, the type of shortages seen in the USSR graphically illustrated the type of economic errors which flow from socialism in one country. Even if the correct economic orientation had been pursued, that is one aimed at raising the living standards of the working class, this of course, would not have removed all economic difficulties in countries which were economically backward and subject to capitalist encirclement. Priority to consumer goods and services requires a development of heavy industry to supply them. With a correct orientation to prioritising consumer goods and services there might well be problems, for example, of shortage of steel, electricity, or energy to supply light industry and consumer services.
But the shortages in the USSR were not in heavy industry, energy, or raw materials - on the contrary there was a superfluity of supply in these areas. The shortages were in consumer goods and the almost non-existence of consumer services - precisely the areas where the workers state should have the greatest abundance. The type of economic shortage which exist, not the fact of shortages in general, indicates the wrong economic and political orientation adopted.
If the construction of socialism in one country was possible then, of course, such problems would progressively be overcome. Heavy industry would be constructed now and light industry and services later as economic development caught up with that of capitalism. But if socialism in one country were impossible then the economic situation was blocked, the economic project utopian, and the masses would be deprived of consumer supply.
Trotsky's economic policy led to the exact opposite priority to that of socialism in one country. In Trotsky's economic analysis the absolute priority was to consolidate the support of the Soviet working class for socialism. Such project could only be achieved with a material foundation. The aim must be to raise the living standards of the working class, conceived in the broadest sense, at the fastest possible rate. The most important sectors of the economy were those aimed at achieving this goal - light industry, state social services and consumer services.
This, naturally, did not mean that the construction of heavy industry
could be avoided or that there would be no economic problems. The needs
of production of consumer goods, and the defence of the USSR, could not
be met without the construction of heavy industry. But the constant aim
must be to raise by all means the living standards of the working class.
This set the priorities and framework of the entire economic policy.
'Maximum' versus 'optimum' growth
The issue of improving the living conditions of the working class, of
maintaining and strengthening the political support of the proletariat
for socialism, therefore, must determine the criteria, and the ternpo,
of economic growth. Trotsky formulated this choice as that of the 'abstract
maximum' rate pursued by Stalin versus the 'optimum' rate - the latter
being the rate which most systematically raised the living standards
of the working class over a prolonged period and which therefore, over
the long term, also yielded the highest actual growth rate owing to
the role played by the working class in production. As Trotsky noted
in the draft programme of the International Left Opposition: 'The administrative
chase after "maximum' tempos must give way to the elaboration
of optimum (that is most advantageous) tempos which do not guarantee
the fulfilment of the command of the day for display purposes only,
but the constant growth of the economy, with a correct distribution
of domestic means and a broad, planned utilisation of the world market.'51
The goals in such economic growth must be simultaneously economic, that
is to achieve the highest sustainable growth rate, and political - to
consolidate the political support of the working class and to reinforce
its alliance with the peasantry. The first aim of economic policy must
therefore be: 'To establish as the criteria of this discussion: the optimum
tempos, those which are most reasonable, that is, tempos which not only
permit the application of the present goals, but even more the dynamic
equilibrium of rapid growth expansion for a number of years to come;
the systematic increase of real wages; the closing of the scissors of
industrial and agricultural prices, that is, the strengthening of the
alliance with the peasantry.'52
Such aims in turn dictated the internal balance of the economy. In particular, disruption of the relations between industrial and agricultural production would come not only from an insufficient rate of industrialisation but also from a rate of industrialisation based on excessive levels of investment which squeezed the consumption of the working class and peasants. Trotsky noted: 'The fundamental and at the same time the most urgent aim...was to ensure the progress of the productive forces in general in the countryside and, on that basis, to accomplish the task of developing industry in close connection with agriculture ... The problem of the smychka, the bond between proletariat and peasantry, determined the fundamental economic content of this policy. The aim of the state's economic policies as a whole is to ensure ... a dynamic equilibrium between industry and agriculture, with the socialist elements gaining increased predominance over the capitalist elements.
'It is quite obvious that disruption of this equilibrium could occur under two main conditions: if the state, by its fiscal, budgetary, industrial, commercial, or other policies were to take from the economy and transfer to industry a disproportionately large share of the annual product and of our resources in general, as a result of which industry would run too far ahead, would become detached from the national economic base, especially the agricultural base, and would run into the road block of insufficient purchasing power; on the other hand, if the state, through all the levers it controls, took an insufficient share of the economy's resources and their annual increases, the result would be that the supply of agricultural products would lag behind the effective demand.
'A disruption of the smychka is evident in either case. If industry's development is excessively forced, that poses an insupportable burden on the peasant and thereby weakens agriculture. But the peasant would suffer just as great a loss if industry could not sufficiently meet the demand from the peasants' sale of the harvest, resulting in a 'scissors' crisis between wholesale and retail prices.'53
Turned into more precise goals an excessively fast rate of growth of production of the means of production, of heavy industry, as projected in Stalinist planning, would cut too heavily into the living standards of the workers. Thus, confronted with the start of Stalinist industrialisation with the first Five Year Plan, Trotsky sharply criticised this tendency noting: 'The tempos of industrialisation must be subordinated to the task of restoring the dynamic equilibrium of the economy as a whole ... Those resources which are freed by the lowering of the tempos must be immediately directed into funds for consumption and for light industry .. The conditions of the workers must be improved at any price ... During the construction of socialism people must live like human beings. What is proposed ... is a perspective of decades, and not a military campaign, or "a Saturday,' or an isolated case of extraordinary intensification of forces. Socialism is the labour of future generations, but today it must be organised so as to permit the future generations to carry it on their backs. '54
Opposition to the Stalinist model of industrialisation
From this starting point Trotsky therefore opposed the model of industrialisation
inaugurated by the first Five Year Plan and which provided the framework
of Soviet economic planning until its final breakdown in the late 1980s.
This policy did not improve the conditions of the working class to
the maximum degree possible but attacked and rode rough-shod over them.
Thus Trotsky noted in 1930, with the simultaneous launching of the
first Five Year Plan and the 'third period' in foreign policy (the
view that social democracy was 'social fascist'), that: 'in recent
months it has finally become clear that the Stalinist faction has transformed
its left zigzag into an ultraleft course both in domestic economic
problems within the USSR and in Comintern policy. This course is the
negation and adventuristic complement of the opportunistic course that
prevailed in 1923 and which was especially pronounced from 1926-28.
Today's course is in no way less dangerous, and in certain respects
is a more serious danger, than yesterday's. Ultraleftism in the economic
policy of the Soviet Union is now developing along two lines: industrialisation
and collectivisation... The opportunists have moved from a passive
possibilist position to one of unrestrained subjectivism. A reference
by an economist or a worker to actual obstacles - for example, bad
equipment, lack of raw material or its poor quality - is considered
a betrayal of the revolution. From top down comes the demand for full
speed, action, offensive. Everything else is the voice of evil.'55
The specific Stalinist course in industrialisation, dictated by the framework
of socialism in one country, was not used to strengthen the position
and conditions of the working class, as Trotsky had proposed in the 1920s,
but to worsen them: 'The Left Opposition came out with a warning: with
too swift a pace, not tested out by previous experience, disproportions
may arise between the cities and the country, and between the different
branches of industry, creating dangerous crises. Moreover - and this
was the chief argument of the Opposition - a too rapid investment of
capital in industry will cut off. excessively the share allocated to
current consumption, and fail to guarantee the necessary rise of the
living standard of the people.'56
Trotsky noted that: 'The [Left] Opposition never undertook 'in the shortest possible time to overtake and outstrip' the capitalist world... Our estimate of the possibilities of industrialisation was immeasurably broader and bolder than that of the bureaucrats up until 1928. But we never regarded the resources for industrialization as inexhaustible. We never thought that its tempo could be regulated by the administrative whip alone ... The Marxist Opposition was denounced by the bloc of the right and centre ... They have a common basis: national socialism. Together they made a curve of 180 degrees over our heads. More and more, they transform the problem of industrialisation into hazardous bureaucratic superindustrialisation.'57
Trotsky outlined with perfect clarity, totally confirmed by later events, the consequences of the Stalin model of industrialisation. Its consequences were:
* An adventurist attempt to overcome the laws of economics which would inevitably fail. The administrative violence was the expression of this. It was not that the violence and crimes of Stalin were a byproduct of a correct course - a case justified by Stalinist apologists as 'you can't make an omelette without breaking eggs'. They were the symptoms of a totally wrong course.
* An assault on the living standards of the working class that would break its support for socialism.
* A radical worsening of the position of women in Soviet society.
* A suppression of democracy in all spheres of Soviet life.
* The destruction of any rational pricing and accounting system.
* The radical deterioration of the quality of production.
* The destruction of Soviet agriculture.
We will deal with these in order.
An adventurist/administrative attempt to overcome the laws of economics
From the analysis we have given it is clear that far from being impressed
by the launching of forced collectivisation and the Stalinist model
of five year plans, considering them a 'second revolution' as Deutscher
did, Trotsky considered them a disaster. As he stated: 'Measures of
administrative violence have nothing in common with a correct course.
They are the price paid for the incorrect one.'58
Forced collectivisation is considered below. But as far as the course
embarked on by the first Five Year Plan was concerned Trotsky noted that
whatever its short term successes: 'The reactionary utopia of an enclosed
socialist economy developing harmoniously on its internal foundations
with the safeguard of the monopoly of foreign trade constituted the point
of departure of the whole plan.'59 More precisely the first Five Year
Plan attempted to extract the USSR from the measure of the world economy
and democratic control vici an administrative/bureaucratic attempt to
leap over the laws of economics. Instead of Soviet planning being aimed
at being guided and realised through the market it was an attempt to
substitute omnipotent planners for the market ultimately led by an omnipotent
Politburo. As Trotsky put it: 'Even if the Politburo consisted of seven
universal geniuses, of seven Marxes or seven Lenins, it would still be
unable, all on its own, with all its creative imagination, to assert
command over the economy of 170 million people. This is precisely the
gist of the matter.' Indeed: 'if a universal mind existed, of the kind
that projected itself into the scientific fantasy of Laplace - a mind
that could register simultaneously all the processes of nature and society,
that could measure the dynamics of their motion, that could forecast
the results of their inter-reactions - such a mind, of course, could
a priori draw up a faultless and exhaustive economic plan, beginning
with the number of acres of wheat down to the last button for a vest.
The bureaucracy often imagines that just such a mind is at its disposal;
that is why it so easily frees itself from the control of the market
and of Soviet democracy.'60
Instead of this utopian concept the Soviet economy could not be developed on the basis of administrative and voluntarist planning but only by progressively outgrowing, not suppressing, market relations. As with the state and the family, the market, and the categories which flowed from the market, could only 'whither away' over a prolonged historical epoch. They could not be suppressed by administrative fiat. Or as Trotsky noted: 'The innumerable living participants in the economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but the direct pressure of supply and demand.
'The plan is checked and, to a considerable degree, realized through
the market. The regulation of the market must depend upon the tendencies
that are brought out through its mechanism. The blue prints produced
by the departments must dernonstrate their economic efficacy through
commercial calculation.'61
Raising the conditions of the working class
Within the framework of the purely progressive withering of market relations
the criterion of Soviet economic policy could not be a self-enclosed
socialist society but the improvement of the conditions of the working
class. The first elements of elimination of the market must aim at
improving the conditions of the working class - in health, education,
housing, the supply of basic necessities etc. Economic policy must
be approached from that angle. This meant not suppressing the market
in other sectors of the Soviet economy. As Trotsky put it: 'The draft
programme of the International Left Opposition says: 'the living standards
of the workers and their role in the state are the highest criteria
of socialist successes.' If the Stalinist bureaucracy would approach
the tasks of planning and of a living regulation of the economy from
this standpoint, it would not be compelled to conduct a policy of wasteful
zigzags, and it would not be confronted by political dangers.'62
Instead of this, as we have already noted, the standard of living of
the working class was the last criteria, the 'residual', considered by
both Stalinist and capitalist economic policy: 'No one disputes that
bricks and iron, as well as their transportation, must be paid for. The
necessity of calculating the costs of production is admitted at least
in principle. But if the expenditures necessary for the extended reproduction
of socialist labour power and the expenditures necessary to render it
more qualified are considered last in all calculations, it is at the
expense of these 'reserve funds' that all the contradictions of our economy,
which is managed in a miserable fashion, are evened up.'63
Instead of this bureaucratic approach, in the final analysis rooted in 'socialism in one country', the improvement of the conditions of the working class was the most important economic goal: 'If we speak seriously of independent socialist production, proceeding from the miserable economic base we have inherited, we must be fully and wholly imbued with the idea that of all the economic investments, the most undeniable, expedient and lucrative, is that which is put into the proletariat ... They [the Stalinists] do not even dream of understanding this. The myopic conceptions of the petty-bourgeois manager is the most important criterion. Whipped by the lash of the Opposition, the 'masters' of the centre ... have not understood to this day that unless they make timely investments aimed at developing a skilled workforce - skilled in all respects: social, political, technical, and cultural - they are surely paving the way for the collapse of the whole social system.
'The stereotyped reply 'Where will we get the means?' is only a bureaucratic subterfuge. It is enough to compare the state budget, reaching almost 8 billion in 1929; the gross production of state industry, amounting to 1 3 billion; capital investments of more than 1.5 billion; with the miserable 35 million constituting the annual fund for wage increases.'64
The result of the Stalinist policy was to reduce to the minimum the
proportion of economy devoted to sustaining and improving working class
living standards. As Trotsky noted: 'the economic turn towards industrialisation
and collectivisation took place under the whip of administrative panic.'65
'The wrong method of the plan, the incorrect adjustment in the course
of its realisation, the absence of genuine control by the masses, the
absence of the party, the struggle for artificial targets in the name
of prestige, the administrative command of the whip, boasting, bluster,
stifling of criticism - all these combined have led to a false distribution
of forces and means and have created, in view of the extremely rapid
growth of the number of wages, an intolerable contraction of the real
wage fund.'66
The downplaying of consumer goods
The consequence of the excessive contraction of the proportion of the
economy devoted to supplying consumer goods, and working class services,
was that far from initial industrialisation benefiting the working
class it took place at their expense. The pattern of the first Five
Year Plan, and forced collectivisation, led not to an expansion of
the goods available for the working class but a deterioration in the
supply. Even later, when Soviet production of consumer goods did begin
to rise, it was inadequate compared with the heavy expansion of heavy
industry. Furthermore the consumer service sector, typical of the advanced
capitalist countries, was almost totally absent. Trotsky, noted in
response to this that: 'The composers of the plan proclaimed that it
was their task to 'lift up the country to a new and hitherto unseen
high level of material and cultural development'...in actuality , the
shortage in commodities has become unbearably acute, the supply of
bread has sharply decreased, meat and dairy products have become rarities...
'In reply to this, the theory has been created that socialism is not
a consumers' organisation of society. The consolation bears too close
a resemblance to mockery! In the midst of newly constructed factories,
plants, mines, electric stations, collective and Soviet farms, the workers
and peasants begin to feel more and more as if they are in the midst
of gigantic phantoms indifferent to the fate of humans. An acute feeling
of disillusionment has possessed the masses. The populace, as consumers,
can no longer understand to what end they strain their energies as producers.'67
Imbalances in the economy
The result of the failure of industrialisation to improve the conditions
of the working class was a distortion of the entire balance of the
Soviet economy. Light industry and consumer services, production of
means of consumption, which serviced working class living standards,
were constricted, or even non-existent, while heavy industry, the production
of the means of production, grew rapidly. The resulting imbalance was
wrong economically and deeply discrediting for socialism - which above
all seeks to meet the needs of the working class.'68
Trotsky noted: 'Is it not monstrous? The country cannot overcome its
scarcity of goods, food shortages occur daily, children lack milk - and
the official philistines declare: 'The country has entered into the period
of socialism.' Could socialism be more fraudulently discredited.'69 Against
this Trotsky called for priority for light industry, for production of
consumer goods, for raising the living standards of the working class
as rapidly as possible and at all costs: 'The 'gaps' in the plan cannot
be filled at the expense of light industry, as was generally done during
the first two years, since the greatest lag in the plan is to be observed
precisely in the production of finished goods ... the scarcity of goods
demands extraordinary efforts in the sphere of light industry.'70
As Trotsky wrote prophetically: 'Socialist construction is a task for
decades. One cannot guarantee the solution of this task except by a systematic
advance in the material and cultural living standards of the masses.
This is the principal condition, more important than the gain in time
in the construction of a Dnieprostroy, a Turksib or Kuzbas [large scale
Soviet industrial projects] because with the fall in the physical and
moral energy of the proletariat, all the gigantic enterprises may lack
a tomorrow.'71
The political consequences
Trotsky outlined the political consequences of these choices in economic
policy clearly. The Stalin course - which instead of seeking to raise
the living standards of the working class sought economic development
at the expense of the working class smashed the support of the proletariat
for socialism. Thus even before the phase of superindustrialisation
began Trotsky warned bluntly in 1926: 'During the last year the entire
economy took a step forward. There was an upturn in industry. The overall
standard of living in the country improved. At the same time, real
wages, by comparison with the autumn of last year, declined. How and
why did this happen? Isn't there a danger that the overall standard
of living [of other sections of the populcition] will continue to rise
faster than wages? That would mean that the influence of the working
class in society at large would decline. Is it necessary to discuss
this question or isn't it?'72
Trotsky wrote five years later of the inevitable political consequences
of such a course: 'The platform of the Russian Opposition warned five
years ago: 'The Mensheviks, agents of the bourgeoisie among the workers,
point triumphantly to the material wretchedness of our workers. They
are trying to rouse the proletariat against the Soviet state, to induce
our workers to accept the bourgeois-Menshevik slogan 'Back to capitalism'.
The complacent official who sees 'Menshevisrn' in the Oppositions's insistence
upon improving the material conditions of the workers is performing the
best possible service to Menshevism. He is pushing the workers under
its yellow banner'.73
Stakhanovism
Given the distortion of the entire Soviet economy by the priorities of
socialism in one country the various administrative measures, and campaigns,
embarked upon by the Soviet bureaucracy made the situation not better
but worse, as they could not substitute for the material base of improving
the living standards of the working class. Stalin's economic policy
was thus both reactionary and voluntarist. Or as Trotsky noted: 'Heroic
enthusiasm can lift the masses for relatively short historical periods.
A small minority is capable of manifesting enthusiasm for a whole historical
epoch: upon this is based the idea of a revolutionary party as the
selection of the best elements from the class. But socialist construction
is a task for decades.'74
Thus Trotsky criticised the glorification of the Stakhanovist movement,
for example, presented by Stalin as a model for raising economic growth
because: 'The administrative method of "emulation' shows that the
tempos are being attained largely at the expense of human muscle and
nerve.'75 Naturally 'exemplary' work could be used in the construction
of a socialist society but it could not be its basis. Instead of voluntarism
the plan must be drawn up to improve the living standards of the working
class - not simply extort greater and greater effort. As Trotsky noted:
'Collective verification of the plan must be made in the process of work.
The elements of this verification do not lie only in the figures of socialist
bookkeeping but also in the muscles and nerves of the workers and in
the political moods of the peasants.'76
Wages policy
These correct criteria of economic advance directly dictated the policy
towards wages. The measurements used to decide on economic performance
by both procapitalist right and the Stalinists refused to take as the
most important criteria how rapidly and sustainably the living standards
of the workers were being raised. As Trotsky noted prior to the launching
of-the first Five Year Plan: 'The articles and resolutions against
the right clamour a good deal...about capital investments in industry,
but they do not contain a single word on wages. This question, however,
must become the main criterion for measuring the success of socialist
development; and consequently, also the criterion to apply to differences.
A socialist advance ceases to be such if it does not uninterruptedly,
openly, and tangibly improve the material position of the working class
in its daily life.'77
Trotsky noted that the approach of the Stalinists fell behind even the
advanced capitalist sectors in the West: 'Even the progressive capitalists
in the epoch of capitalist prosperity and their theoreticians (the Brentano
school, for example) put forward the amelioration of the material situation
of the workers as a premise for the increase of labour productivity.
The workers' state must generalise and socialise at least this viewpoint
of progressive capitalism, insofar as the poverty of the country and
the national limitation of our revolution does not permit us and will
not permit us for a long time to be guided by a real socialist criterion.
'That is to say, the purpose of production is to meet human needs. We will not come to such really socialist relations between production and consumption for a number of years yet, under conditions of victorious revolution in the advanced capitalist countries, when our country is included in a common economic system. But since we have socialised the capitalist means of production, we must at least socialise also, so for as wages are concerned, the tendencies of progressive capitalism and not those of primitive or declining capitalism.'78
This framework directly dictated Trotsky's opposition to Stalin's attempt to lower wages and compress the consumption fund. He noted: 'we must crush and throw to the winds the tendencies that imbue the last joint resolution of the Russian trade unions and the Supreme Council of the National Economy relating to wages projected for 1929. It is a decree of the Stalinist Political Bureau. It announces that with a few exceptions ... there must be no mechanical (remarkable word!) increase in wages. Innumerable newspaper articles explain that the task for 1929 is to fight for the rnaintenance of the present scale of real wages. And at the same time all the noisemakers are cluttering away to announce the mighty rise of socialist construction...
'Budget appropriations for the protection of labour are insignificant. Alcoholism is on the increase. And as a perspective we have for the coming year the struggle to maintain the present wages of the workers. This means that the economic rise of the country is being accomplished at the price of decreasing the proletariat's share in the national income ... No statistics can dispute this fact, which is in equal parts the result of the policy of the right and the centre.'79
Even in the most difficult economic circumstances Trotsky noted that the most important task was to attempt to sustainably raise the living standards of the workers. Thus for example writing in 1926 he noted: 'Economic difficulties do not allow us at present to chart a course towards a substantial rise in wages. The party should recognise, however, that the present wage level is inadequate and should set itself the following tasks in this area:
a. not to allow a decrease in real wages in the near future;
b. to create the material conditions for a future increase in wages,
i.e., a sufficient increase in the volume of industrial production
in 1926-27 for money wages to be appropriately supplemented in kind
(40 to 45 per cent of the worker's budget is now paid for in industrial
products); a stubborn and systematic technical reequipment of industry,
the only thing that can ensure a systematic and uninterrupted rise
in the workers' standard of living.'80
Consumer goods and the productivity of labour
Trotsky pointed out that rises in real wages, above all increasing the
supply of consumer goods, would increase, not decrease, the productivity
of labour: 'There have been differences of opinion on the question
of wages. In substance, these differences consist of our being of the
opinion that at the present stage of development of our industry and
economy, and at our present economic level, the wage question must
not be settled on the assumption that the workers must first increase
the productivity of labour, which will then raise the wages, but that
the contrary must be the rule, that is, a rise in wages, however modest,
must be the prerequisite for an increased productivity of labour.'81
Indeed the appalling economic conditions directly hit against the productivity
of labour: 'In the category of reasons for the extremely low production
of the Red Ural combine [in the Soviet press] alongside of 'the shocking
disproportions between the different parts of the combine,' lists the
following: (1) 'the enormous migration of the labour force'; (2) 'the
muddle-headed policy of the workers' wage'; (3) 'failure to provide [the
millworkers] with some manner of livable quarters'; (5) 'the catastrophic
falling-off of labour discipline.' We have quoted word for word.
'As regards the migration, which 'has grown beyond all bounds,' this paper writes, 'the living conditions [of the workers] are ghastly in all the enterprises of nonferrous metallurgy without exception."
'In the locomotive factories, which failed to provide the country with about 250 locomotives for the first three-quarters of the year, 'there is to be observed an acute shortage of qualified workers. More than two thousand workers in the course of the summer left from the single Kolomensk factory.' The reasons? 'Bad living conditions.' In the Sormovsk factory, 'the factory kitchen is a dive of the worst sort.' In the privileged tractor factory in Stalingrad, "the factory kitchen has fallen sharply in its work'...To what pitch the dissatisfaction of the workers must have risen in order to force these facts into the columns of the Stalinist press!...
'In explanation of the cruel flop of 'the six conditions' [a campaign of Stalin] there was a tendency for a long time to confine the observations to bold accusations against the management and the workers themselves: 'incapacity,' 'lack of willingness", 'resting on their laurels", etc. However, for the last few months the papers more and more often point out, mostly on the sly, the actual core of the evil, the unbearable living conditions of the workers...'This risky explanation was made necessary, no doubt, in order to hide the basic fact: the lack of material goods to supply the workers. The national income is incorrectly distributed. Economic tasks ore being set without any account being taken of the actual means. An increasingly inhuman load is being dumped on the shoulders of the workers.'82
This position of Trotsky's was particularly prophetic. In the 1970s
and 1980s systematic increases in wages did occur in the USSR. But there
was still a tremendous shortage of consumer goods for these wages to
buy. The result was, first, the 'monetary overhang' which threatened
the Soviet economy and, second, the fact that the increase in wages did
not produce an increase in productivity - because even when workers received
higher wages there were no consumer goods to purchase with them and the
incentive effect was therefore minimal. Only a radical redistribution
of resources within the Soviet economy could solve the problem.
Piecework
For such reasons Trotsky attacked the almost universal use of piecework
under the Stalinist system - a method of payments which has increasingly
been dropped even by advanced capitalist production. Piecework was
an attempt by the Stalinists to compensate for the lack of incentive
given to the working class due to the shortage of consumer goods and
services. Trotsky noted, for example, of Stalin's complaint of the
excessive mobility of labour, which the latter described as workers
wandering from factory to factory to 'try their luck', that: 'Nine
tenths of the new programme of Stalin amounts to the re-establishment
of piecework ... We are told that in the third year of the five year
plan the Soviet Union has entered into socialism...'Do not forget'
he [Stalin] says, 'that the vast majority of the workers have accepted
these demands of the Soviet government (discipline, overexertion of
effort, emulation, shock brigades) with great enthusiasm, and they
are fulfilling them heroically.'
'Now if that is true, if we have entered into socialism, if the 'vast
majority"... of the workers fulfil their tasks 'with great enthusiasm'
and even 'heroically', one must ask why this some 'vast majority' wander
from one factory to another to try their luck? And why are they obliged,
precisely now, after all the successes have been achieved, to pass over
to the system of piecework which is, after all, the most refined method
of exploitation of working class.'83
Excessive reliance on piecework was an attempt to substitute for the
involvement of the masses in economic life. As Trotsky noted: 'Piecework
wages are not in principled contradiction with the conditions of the
transitional Soviet economy ... But the abrupt turn towards piecework
and the extreme accentuation of the capitalist feature of this system
present today, in the summer of 1931, at the end of the third year of
the five year plan, after the 'uninterrupted successes", after we
have 'entered into socialism', is one of the harshest blows against the
workers, from the material as well as from the moral point of view.'84
The overall conditions of the working class
The situation of wages and piece work was, however, simply a symptom
of the entire situation under the Stalin course - the latter's attempt
to pursue industrialisation at the proletariat's expense: 'The housing
conditions of the workers in many places continue to deteriorate in
terms of overcrowding and the restriction of tenants rights. The reduction
in the number of adolescents hired ... and the introduction of unpaid
apprenticeships means an abrupt worsening of conditions for working
class youth ... The strengthening of the USSR internationally requires
the strengthening of the revolutionary proletarian line within the
USSR. We are weakened by the delay in raising wages, the deterioration
of the workers' housing conditions.'85
In short, the real development and defence of the Soviet state could
not take place at the expense of the working class but only on the basis
of strengthening the position of the working class. As Trotsky noted:
'bettering the conditions of the workers; that's
where the beginning must be made, for herein is to be found the key to
everything else. Workers and their families must be assured of food,
shelter and clothing. No matter at what cost!...All questions relating
to supplying factories with necessities must be regulated as independent
and not supplementary tasks. Order must be brought into the production
of consumer goods. Commodities must be adapted to hurnan needs and to
the raw by-products of heavy industry.'86
Without this the entire socialist project faced catastrophe. Trotsky
warned prophetically of the Stalin course: 'Unbearable working conditions
cause a turnover of labour within the factories, malingering, careless
work, breakdown of machines, damaged products, and general low quality
in the grade of production. The entire planned economy fails under the
blow.'87
The consequences for women
Finally the deterioration of light industry, the lack of consumer goods,
and almost complete absence of consumer services struck most severely
at women - because a large part of the sector was what made possible
any beginning of the socialisation of domestic labour.88 The reactionary
policies of Stalin on women, 'motherhood' etc - the 'Thermidor in the
family' which Trotsky wrote of in the Revolution Betrayed - had their
root in the wrong economic course established by socialism in one country.
The position of women was improved by Stalin only insofar as it allowed
them to function as an expanded supply of labour - to function as cogs
in the emphasis given, in particular, to heavy industry - and not from
the point of view of meeting the needs of women themselves. The development
of the economic sectors that were necessary for women's needs were
disrupted by the entire economic course. For only on a material basis
could the real liberation of women take place.
As Trotsky noted: 'To institute the political equality of men and women
in the Soviet state was one problem and the simplest. A much more difficult
one was the next - that of instituting the industrial equality of women
and men in the factories, the mills, and the trade unions and doing it
in such a way that the men should not put the women to disadvantage.
But to achieve the actual equality of man and woman within the family
is an infinitely more arduous problem. All our domestic habits must be
revolutionised before that can happen. And yet it is quite obvious that
unless there is actual equality of husband and wife in the family, in
a normal sense as well as in the conditions of life, we cannot speak
seriously of their equality in social work or even in politics. As long
as woman is chained to her housework, the care of the family, the cooking
and sewing, all her chances of participation in social and political
life are cut down in the extreme.'89
Therefore: 'To alter the position of women at the root is possible only
if all the conditions of social, family, and domestic existence are altered
... The question of motherhood is above all a question of an apartment,
running water, a kitchen, a laundry room ... Running water and electricity
in the apartment lighten the woman's burden above all.'90 The running
down of consumer goods and services which was the byproduct of the policy
of socialism in one country directly struck women.
Equally severe in its effects on women was the question of quality of
production - something considered in detail below: 'Housing construction,
the construction of child care facilities, kindergartens, communal dining
rooms and laundries must be in the centre of attention, and that attention
must be vigilant and well organised. Here questions of quality decide
all. Child-care, eating and laundry facilities must be set up so that
by the advantages they provide they can deal a death blow to the old
closed-in, isolated family unit, completely supported on the bent shoulders
of the housewife and mother...But the transfer of material means from
the family .. will only take place if the social organisation learns
to satisfy the most primary demands better than the family.'91
Stalin, by destroying the economic basis of consumer goods and services,
and the quality of production, threw back women. Trotsky noted: 'The
October Revolution honestly fulfilled its obligations in relation to
woman. The young government not only gave her all political and legal
rights in equality with man, but, what is more important, did all that
it could, and in any case incomparably more than any other government
ever did, actually to secure her access to all forms of economic and
cultural work...
'The revolution mode a heroic effort to destroy the so-called family
hearth - that archaic, stuffy and stagnant institution in which the woman
of the toiling classes performs galley work from childhood to death.
The place of the family as a shut in enterprise was to be occupied, according
to the plans, by a finished system of social care and accommodation:
maternity houses, child care centres, kindergartens, schools, social
laundries, first aid stations, hospitals, sanatoria, athletic organisations,
moving picture theatres etc. The complete absorption of the housekeeping
functions of the family by institutions of the socialist society...was
to bring to woman ... a real liberation from thousand year old fetters...
'It proved impossible to take the old family by storm - not because the will was lacking, and not because the family was so firmly rooted in rnen's hearts. On the contrary, after a short period of distrust of the government and its child care facilities, kindergartens, and like institutions, the working women, and after them the more advanced peasants, appreciated the immeasurable advantages of the collective care of children as well as the socialisation of the whole family economy. Unfortunately society proved too poor and little cultured. The real resources of the state did not correspond to the plans and intentions of the Communist Party. You cannot 'abolish' the family; you have to replace it. The actual liberation of women is unrealisable on the basis of 'generalised want'. Experience soon proved this austere truth which Marx had formulated eighty years before.
'The truth is during the lean years the workers, wherever possible, and in part their families, ate in the factory and other social dining rooms, and this fact was officially regarded as a transition to a social form of life ... The fact is that from the moment of the abolition of the food-card system in 1 935, all the better placed workers began to return to the home dining table. It would be incorrect to regard this retreat as a condemnation of the socialist system, which in general was never tried out. But so much the more withering was the judgement of the workers and their wives upon the 'social feeding' organised by the bureaucracy. The same conclusion must be extended to the social laundries, where they tear and steal linen more than they wash it. Back to the family hearth!
'But home cooking, and the home washtub, which are now shamefacedly celebrated by orators and journalists, mean the return of the workers wives to their pots and pans - that is, to the old slavery. It is doubtful if the resolution of the Communist International on the 'complete and irrevocable triumph of socialism in the Soviet Union' sounds very convincing to the women of the factory districts.'92
The distortion of the Soviet economy, the destruction of light industry,
welfare and consumer services, struck its heaviest blow against women.
3. Democracy and the categories of commodity economy
It was from the angle of proportions in the economy, not micro decision
making, self management, that the issues of the relation of democracy
and economics were most fundamentally posed. Democratic resolution of
the plan, to decide the allocation of resources, was the decisive issue.
As Trotsky noted: 'The problem of the elements of production and the
branches of the economy constitutes the very heart of socialist economy.'93
Only by democratic decision making could the essential allocation of
proportions in the economy take place. Trotsky noted on this: 'The processes
of economic construction are not yet taking place within a classless
society. The questions relating to the allotment of the national income
compose the central focus of the direct development of the class struggle
and that of social groups, and among them, the various strata of the
proletariat itself. These are the most important social and economic
questions: the link between the city and the village, that is, the balance
between that which industry obtains from agriculture and that which it
supplies to it; the interrelation between accumulation and consumption,
between the fund for capital construction and the fund for wages; the
regulation of wages for various categories of labour (skilled and unskilled
workers, government employees, specialists, the managing bureaucracy);
and finally the allotment of that share of the national income which
falls to the village, between the various strata of the peasantry. All
these questions by their very nature do not allow for a priori decisions
by the bureaucracy, which has fenced itself off from intervention by
concerned millions.
'The struggle between living interests, as the fundamental factor of planning, leads us into the domain of politics, which is concentrated economics ... Only through the interaction of these three elements, state planning, the market, and Soviet democracy, can the correct direction of the economy of the transitional epoch be attained. Only thus can be assured, not the complete surmounting of contradictions and disproportions within a few years (this is utopian!), but their mitigation, and through that the strengthening of the material bases of the dictatorship of the proletariat until the moment when a new and victorious revolution will widen the arena of socialist planning and will reconstruct the system.'94
The distortion of the proportions in the Soviet economy, the disappearance of the light industry and services and the unbalanced expansion of heavy industry, were the expression of the fact that working class democracy had ceased to function - no democratic decision by the working class would ever have arrived at such an allocation of resources. As Trotsky noted: 'the bureaucracy more and more resolutely ruled out any demands, protests, and criticism ... The only prerogative which it ultimately left to the workers was the right to exceed production limits. Any attempt to influence economic management from below is immediately described as a right or a left deviation, that is, practically made a capital offence. The bureaucratic upper crust, in the last analysis, has pronounced itself infallible in the sphere of socialist planning.'95
This issue was particularly decisive when it came to determining the key question of the rate of accumulation. As Trotsky noted: 'A five year plan can be projected with the necessary proportions and guarantees only on condition of a free discussion of its rates and terms; only with the participation in these discussions by all related industries and by the working class, drawing in all its organisations ... only with an evaluation of the whole experience of the Soviet economy in the last period, including the monstrous faults of the leadership.
'The most important element of the plan is not a question of what the
workers and peasants want and are able to consume immediately, but what
they can save and accumulate. The question of the tempo of industrialization
is not a matter of bureaucratic fancy, but of the life and culture of
the masses. Therefore the plan for building socialism cannot be issued
as an a priori bureaucratic command. It must be worked out and corrected
in the same way that the construction of socialism itself can only be
realised, ie, through broad soviet democracy.. Soviet democracy is not
an abstract political demand and still less a moral one. It has become
an economic necessity.'96
The defence of the working class
Democracy, not just political but in the unions and workers control,
was indispensable for controlling costs of production and preventing
industrialisation striking at the interests of the workers. Without
this both would inevitably deteriorate: 'in a socialist economy under
construction a basic condition for the economical expenditure of national
resources is vigilant control by the masses, above all the workers
in the factories and shops. As long as they cannot openly criticise
and expose irregularities and abuses, exposing those responsible by
name ... the struggle for a 'regime of economy' or for higher productivity
will inevitably travel down the bureaucratic path, ie more often than
not will strike at the vital interests of the workers.'97
It was only the introduction of democracy which would ensure economic
planning that created a systematic improvement in the position of the
working class. Thus even on the direct question of wages for example:
'Without the rebirth of workers democracy, a correct policy of wages
is absolutely unattainable. 'Collective contracts', says the platform
of the Russian Opposition, 'should be made after real and not fictitious
discussion at workers meetings. The work of the trade unions should be
judged primarily by the degree to which they defend the economic and
the cultural interests of the workers under the existing industrial limitations.
The trade unions must fulfil their functions on the basis of genuine
elections, publicity, accountability to the membership, bearing the responsibility
at every degree of the hierarchical scale. An article should be introduced
into the Criminal Code punishing as a serious crime against the state
every direct or indirect overt or concealed persecution of a worker for
criticizing, for making independent proposals, and for voting'98 .
Or as Trotsky noted: 'That the old method of wages was bad from every
point of view has been obvious to us for a long time. One cannot work
out a rational, viable, and progressive system of wages without the collaboration
of the masses themselves ... Collective contracts and wage scales are
elaborated in the offices and imposed upon the workers, like all other
decisions in the infallible centre. Without the rebirth of workers democracy,
a correct policy of wages is absolutely unattainable.'99
Democratisation of the unions and proportions in the economy
For correct economic functioning, above all correct proportions in the
economy, democratisation had to be extended not only to the Soviets
and political parties but to the trade unions: 'The trade unions have
finally been degraded to auxiliary organs of the ruling bureaucracy.
A system of administrative pressure has been built up, under the name
of shock troops, as if it were a question of a short mountain pass
and not a great historical epoch. The economic plan must be checked
on from the point of view the actual systematic improvement of the
material and cultural conditions of the working class in town and country.
The trade unions must be brought back to their basic task: the collective
educator, not the knout ... The problem of raising the political independence
of the proletariat and its initiative in all fields must be put in
the foreground of the whole policy.'100
Only such methods could ensure the fundamental goal - the improvement
at the most rapid pace possible of the conditions of the working class.
As Trotsky wrote in 1926: 'It is necessary to reverse all decisions of
the last two years that have worsened the situation for the workers,
and to emphasise forcefully that without a planned and systematic improvement
- even if at first it is only a slow improvement - in the conditions
of the working class, this 'main productive force' (Marx), it is impossible,
in the present situation, to salvage either the economy or the construction
of socialism.'101
Furthermore, democracy would become still more decisive as the economy developed for: 'Behind the question of quality stands a more complicated and grandiose problem which may be comprised in the concept of independent, technical, and cultural creation. The ancient philosopher said that strife is the father of all things. No new values can be created where a free conflict of ideas is impossible ... epochs of revolution have never been directly favourable to cultural creation: they have only cleared the arena for it. The dictatorship of the proletariat opens a wider scope to human genius the more it ceases to be a dictatorship. The socialist culture will flourish only in proportion to the dying away of the state. In that simple and unshakeable historic law is contained the death sentence of the present political regime in the Soviet Union. Soviet democracy is not the demand of an abstract policy, still less an abstract moral. It has become a life and death need of the country.' 102
In short: 'A true left course would require an economic plan extending
over a period of years ... All that can be accomplished by the issuing
of circulars from on high is a zigzag to the left. But it is impossible
to carry out a true left course by issuing circulars. To carry out a
left, proletarian course, a Leninist course, our party must have a new
orientation, from top to bottom, and a realignment of forces. Those are
processes that would have to develop in a serious way over a long period.'103
Democracy and the law of value
Nevertheless if democracy set the framework of economic organisation
- as Marx put it 'democracy is content and form' of the future organisation
of society - democracy was subject to the constraint of the relations
of commodity economy over an entire historical epoch.104 In this contradiction
lay the fundamental tension of socialist construction. As long as scarcity
existed, that is as long as a superior development of the productive
forces to capitalism had not been achieved, allocation of resources
according to the democratic will of society collided with the continuation
of allocation on the basis of the laws of commodity production - the
law of value. Commodity production could only progressively be replaced
by democratic, that is planned, allocation of resources. The feature
of this prolonged transition period in the economic field, as Trotsky
put it, was that for many years: 'The plan is checked and, to a considerable
degree, realised, through the market.'105 This reality, which would
last even in the most advanced country for many decades and on a world
scale for centuries, in turn dictated Trotsky's attitude to supply
and demand and the other features of commodity economy. In particular
it meant rejection of the administrative pricing policy of Stalin.
Prices
The idea of a command economy rapidly overriding commodity calculation,
introduced by Stalin, was an absurdity from the Marxist point of view.
While the political transition from a bourgeois to a working class power
was necessarily accomplished in a single transition, a revolution, the
economic transition was spread out over an entire epoch of development.
As Marx wrote in the Communist Manifesto: 'The proletariat will use its
political supremacy to wrest, by degrees, all capital from the bourgeoisie.'106
What was involved in the Soviet Union was a society, as Marx had foreseen,
where: 'What we are dealing with ... is a communist society, not as it
has developed on its own foundations but on the contrary, just as it
emerges from a 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.' In such a society the most important
commodity relation, labour power, would remain a commodity over a prolonged
period: 'Accordingly, the individual producer receives back from society
... exactly what he gives to it.' Only over an entire epoch would payment
of labour achieve: 'From each according to his abilities to each according
his needs.'107
What applied to one commodity, labour power, necessarily applied to others. The Stalinist attempt to abolish the commodity character of production by administrative means, rather than society outgrowing it progressively over an entire historical epoch, was an adventure, an administrative attempt to suppress the labour determination of value, which inevitably end in economic disaster.
The civil war had imposed on the Bolsheviks the command economy of 'war communism' which administratively overrode commodity relations in the economy - involving rampant inflation, ignoring the pricing mechanism, administrative allocation of resources, seizure of products etc. A command economy is typical even of bourgeois states in times of war - capitalists do not attempt to fight wars on the basis of the market - and was politically justified by such circumstances (as indeed such a mechanism would have been justified during World War II or other times of extreme crisis). But these were exceptional regimes.
For long term efficient economic functioning it was necessary to move towards reintroduction of the realisation of economic planning through supply and demand and the market - the plan set the framework within which the market functioned, and the plan only progressively made inroads into the market.
Furthermore, as the fundamental economic reality confronted was the world economy, pricing would have to fundamentally reflect world prices - for prices are the reflection of commodity relations. Other mechanisms for redistributing resources - social spending, subsidies, direction of resources - must be developed with the minimum disruption possible of the pricing mechanism - and least of all by hidden distortion of prices. As Trotsky noted: 'A brief experiment showed ... that industry itself, in spite of its socialised character, had need of the method of money payment worked out by capitalism. A planned economy cannot rest merely on intellectual data. The play of supply and demand remains for a long period a necessary material basis and indispensable corrective.' 108
Pricing was necessarily crucial as supply and demand cannot operate without accurate prices. As Trotsky wrote in The Revolution Betrayed criticising the theory of administrative pricing developed by Stalin: 'The owl of wisdom flies, as is well known, after sunset. Thus the theory of a 'socialist" system of money and prices was developed only after the twilight of inflationist illusions, In developing the ... enigmatical