Marxism, Stalinism and Political Economy, (An Open Letter to Professor Ostrovilyanov)

[p032] towards freedom and light. An Open Letter to Professor Ostrovityanov MARXISM, STALINISM AND POLITICAL ECONOMY Tom Kemp After an exceptionally long interval the textbook of political economy! which first appeared in Russian in 1954, and subsequently in a number of other languages, has now been made available in English. It is a heavy volume of some 850 pages, and its publication, well printed and bound, at the price of 21s. is no mean feat of ‘political economy’ in these times. The work has naturally evoked world-wide interest as a kind of summation of orthodox Soviet doctrine in the fields which it covers. The additions and emendations in the different editions have likewise been noted and commented upon as reflecting changes in the emphasis which leading Soviet circles have placed upon certain questions since the death of Stalin. By its nature, too, this work has been and will be accepted as authoritative by the Communist Parties of the world; in total circulation and mass influence it must rank well ahead of any similar publication. In the foreword the authors invite ‘critical contributions and suggestions’ and responding to this invitation, Tom Kemp, on behalf of Labour Review, sent the following letter: DEAR PROFESSOR OSTROVITYANOV AND COLLEAGUES, I have taken part of my vacation to read thoroughly and ponder with care the work for which you are responsible and which has only recently been made available to English readers. Your invitation to readers to forward their comments on the book is welcome. What follows is my response to this invita- tion, in which I have selected a number of issues on which it seems to me that you deserve praise and—I am afraid, more often—somewhat sharp criticism. I would ask you to bear in mind that I am writing under conditions in which it is impos- sible for me to verify quotations and statistics or to consult or quote relevant works or data, including other language editions of the same work. What strikes the reader in the first place is the unusual approach to the subject, compared with that current among most writers of what you would call ‘bourgeois’ economic text- books. It is refreshing to find a text which approaches economic phenomena in a concrete, historical way; with an approach, that is to say, which derives directly from Marx. Moreover, when you follow more or less closely Marx’s own economic 1Political Economy. A Textbook issued by the Institute of Eco- nomics of the Academy of Sciences of the USSR. (Lawrence and Wishart, 21s.) 155 writing the exposition, though sometimes oversimplified after the manner of textbooks, is clear, concise and straightforward. All students will be able to consult these sections with profit, provided that they do not take them as substitutes for reading the originals. These compliments having been paid, there remains the less pleasant problem of knowing where to begin with the host of unfavourable comments which I feel obliged to make. Be- cause they are so numerous I will try to select those which appear to me to be most fundamental. In the first part, dealing with pre-capitalist societies, there is much, I am sure, which anthropologists, prehistorians, soci- ologists and orientalists who also claim to work in the Marxist tradition will not be able fully to accept. The outline offered is schematic and dogmatic in fields where much is hypothetical and unsure. THE ANALYSIS OF MODERN CAPITALISM While many economists in this and other countries will be. prepared to accept all, or most, of Marx’s analysis of nineteenth century capitalism, they will be far from accepting your al- legedly Marxist analysis of present-day capitalism. And this not through ill-will. ‘Bourgeois economists’ by no means form a homogeneous bloc of learned apologists and hangers-on. of capitalist society. Many are sincerely worried about the in- adequacies and sterilities of much non-Marxist economic thought—which is itself in a stage of protracted crisis—and would weigh seriously honest and thorough Marxist analysis of modern capitalist development. Such an analysis might well have won many new adherents to Marxism. It is to be feared that your textbook will do nothing of the kind and will have rather the contrary effect. I would go as far as to say that in dealing with modern capitalism you display a dogmatism and an ignorance of or disrespect for essential facts which, though diametrically opposed to the method of Marx and Lenin, will be taken by many as arising directly from it. For the authors of the textbook the curve of capitalist de- velopment is always descending and the deterioration of the real wages and living conditions of the working class a con- tinuous process, uninterrupted, it would seem, by plateaux or periods of improvement. You state as a law that ‘as capitalism develops, a process of relative and absolute deterioration of the proletariat takes place’ (p. 169). This is reiterated in a num- ber of different’ forms—not merely as a tendency but as the expression of a real development. Free competition impov- erishes the workers, the growth of monopoly impoverishes them still further. If the role of the State in economic life grows, this only leads to ‘additional exploitation of the working >20-

[p033] ple by way of a redistribution through the Budget of part of their incomes for the benefit of the bourgeoisie’ (p. 247). The impoverishment of the working class and peasantry is both a cause and a result of crises. After the second world war had carried the process a stage further ‘the bourgeoisie . . . restored the productive capacity of industry and to a considerable ex- tent renewed it at the expense of intensified exploitation of the working people and lowering of their standard of living’ (p. 360). For good measure we have Stalin’s well-known ‘basic economic law of monopoly capitalism’, namely ‘the securing of the maximum capitalist profit through the exploitation, ruin and impoverishment of the majority of the population of the given country ...’ and so on. The share of the national income received by the working class ‘is so low that, as a rule. it does not guarantee them even the minimum needed for subsistence’ (p. 244)—and, of course, is as a rule, declining. One is almost forced to believe that the working class is so hardy that over a period it has become possible for it to work harder and more intensively for less and less real income. Flimsy statistical evidence Lest it should be thought that these generalizations apply only to less fortunate capitalist countries, you are at pains to cite statistics applying to the USA, which is generally reckoned to be the richest capitalist country and the one in which the real income of the workers is highest. (I assume that you do accept this.) Thus we read on page 154 that the real wages of Ameri- can workers fell by as much as 74 per cent between 1900 and 1938, and on page 151 that in the latter year the average wage of the employed industrial worker was less than half of the subsistence minimum. Lest we should assume that after all the thirties were years of depression we are later assured that ‘real wages in the USA and Britain and especially in France and Italy have markedly declined as compared with pre-war’ (p.368). In other words we are asked to believe that American workers are worse off now than they were in the depression years. ~ Tt is noteworthy that these categorical assertions rest upon flimsy statistical evidence, taken mostly from undisclosed sources. Nothing is more difficult than to compare changes over time in living standards or real wages. There should be a place in: your textbook for a full examination of this question, complete with reference to sources, and a whole chapter, not just a page or two. on those statistical techniques which play an increasing role in the investigation of economic problems. Since it is clear that you do not exclude either the USA or Britain from your generalizations, one must believe that you are really in ignorance of economic developments in those countries over the past decade or so; or are deceiving yourself about them; or that you have deliberately painted develop- ments in those countries in the blackest colours in order that Soviet citizens would bear more easily the painfully slow im- provement in their own lot. It is no part of my intention to whitewash capitalism. I consider myself a Marxist. It would be as inaccurate to suppose that the recent history of changes in the conditions of the workers has been nothing but gain as to suggest that there has been no gain at all. Certainly this is the case as far as Britain is concerned (which has, for example, a virtually free, comprehensive medical service). British workers have experienced a decade and a half of full employment fol- lowing a prolonged period of heavy employment. Not only has it enabled the trade unions to improve wage levels and win other concessions, but it has made an immeasurable difference to many working-class families. Regular work—even when it has meant overtime, long journeys, greater labour intensity, to put the worst possible case—will have enabled the family to buy, over the years, furniture and other durable consumer goods, to put by a little money, to have holidays and enjoy various amenities which twenty years ago would not have been within their reach. The British workers who read your book are bound to reject, from their own knowledge and experience, that part of it which purports to describe what is happening in their own particular sphere. That does not mean to say. of course, that they have necessarily become reconciled to. capital- ism or blindly follow Right-wing Labour leaders. Indeed in the last year or two they have shown a remarkable capacity io fight to defend their living standards from attack and to im- prove them in some cases. Let me point out that I do not deny that there exists a tendency in capitalist society for workers’ living standards to deteriorate. Even many revisionists, like John Strachey, do not deny the existence of such a tendency. Nor do I want to deny that the balance of gains and losses is difficult to strike and for 156 some categories may result in a negative quantity. For many workers conditions of work and housing are very low. The argument for deterioration is not clinched by pointing this out. Thus, I have before me an article by Maurice Thorez in which he takes issue with an Italian communist who had criticized the attitude of the French Communist Party on this question.! His refutation rests on extracts from an Italian Parliamentary report of an inquiry into poverty. But the whole crux of the argument depends on comparisons over time; in this case, was there more or less poverty under Mussolini? In order to estab- lish a deterioration it does not suffice to show that conditions are bad but that they have become worse. This vital proof is lacking both in your textbook and in the writings of disciples such as Thorez. It is not possible to accept your chapter on ‘Crises’ as any- thing but a superficial, confused and eclectic piece of writing, passages of which would do credit to a Keynesian. This chapter stands on the same theoretical level as_the sections on capital- ism since the second world war, which show little real under- standing of the forces and factors at work in this period. ‘War economy’ has been a major factor, but what has been striking is that other sectors of the economy (motor cars, for instance) have also been running at a high level and that not worsening material conditions but rather the reverse has characterized the situation for the working class. Ready-made formulas, windy propaganda phrases, questionable statistics and wish- fulfilment are no substitute for the ample documentation and detailed analysis which distinguishes the work of Marx and Lenin. Let us suppose, however, that your diagnosis of present- day capitalism is correct, i.e., that there has been a more or less unchecked deterioration of working-class living standards. You then state that this leads to discontent and the ‘sharpening of the class struggle between proletariat and bourgeoisie’ (p. 323). In reality it is hard to believe, however much one would like to. that as a result of ‘the aggravation of the general crisis’ the working class has been brought ‘in real earnest to the socialist revolution’ (same page) under the leadership of the Communist Parties. Either your diagnosis must be rejected or something has gone seriously wrong with the policy, tactics and leadership of these parties. No one can doubt that in most capitalist countries, including France and Italy, the Communist Parties are much weaker than they were ten years ago, and that their effectiveness in rousing and leading the people has considerably declined. How do you explain this fact? Even the Soviet reader who is not in close touch with conditions in those countries must be uneasily aware that the textbook does not conform to reality in these matters. Why not face facts and make a real, truthful explanation even though it may not prove a very comforting one? THE ANALYSIS OF RUSSIAN ECONOMY The second half of your book is given over to a detailed discussion of the economy of the USSR. I do not intend to raise every point on which it seems to me that you have twisted facts or substituted evasions or special pleadings for a full and frank analysis of things as they are—or were. There are, how- ever, a number of questions which I should like to take up. First of all, some events from the past. Is it still impos- sible in the Soviet Union to give an objective record of the past? Your account of collectivization is a highly idealized one which it is quite impossible to accept—like an account of the French Revolution that does not mention the guillotine. The treatment of the “Trotskyists’ is a masterpiece of hypocrisy and cynicism. Why not give the Left Opposition the credit they deserve for the far-sightedness of their platform and add some criticism of the wrong trails, followed by forced marches, un- necessary sacrifice of human life (including the wiping out of the Bolshevik Old Guard) and the intensification of police re- pression which was the price which Stalin exacted from the Russian people? How can we believe what you write about this period when in one sentence you tell us that the Trotskyists and Bukharinists ‘defended the kulaks in every possible way, combated the creation of collective and State farms’, and in the very next state blandly that ‘the Communist Party routed the Trotskyist line of the exploitation and forcible expropria- tion of the peasantry by means of high prices for industrial goods and excessive taxes” (p. 470)? Could self-contradiction 1Encore une fois la Pauperisation (reprint of article in Cahiers du Communisme, May 1957).

[p034] have been carried to further limits than this? Can we believe that the rapid collectivization of agriculture in 1929 was volun- tary and that there was no exploitation of the peasantry? (Cf. chapter xxv passim.) The central part of this section is the chapters on ‘The Basic Economic Law of Socialism’ and ‘The Law of Planned Proportional Development’. It is here that the consequences of the assumption that the USSR represents fully achieved social- ism are the most violent contradictions, despite your desperate attempts to prove otherwise. Because of your claim, any shortcomings in the USSR (and you do admit some) have to be attributed primarily not to objective factors but to ‘sur- vivals of capitalism in the consciousness of man [which] have not yet been fully overcome’ (p.541)—forty years after the October Revolution. And although ‘contradictions’ remain, you do not investigate them in detail, and they are of the kind which Mao Tse-tung prefers, i.e., they are of the ‘non-antagon- istic’ variety. Can this claim be taken seriously? Why this benign formula? Let me question it from one aspect. You lay down as a general law of socialism ‘the priority development of industries producing means of production’. Inevitably in the special con- ditions of the USSR—its backwardness and isolation—such priority had to find expression; but it is curious to make it part of a general law which would presumably apply also to ad- vanced countries. The emphasis which you lay on this point can only be attributed to controversies arising inside the USSR —of which Stalin’s Economic Problems gave some indications and which represented strains and tensions inside Soviet society. Their nature stands revealed in your own words. While on page 549 you state: ‘Socialism [you mean the USSR—T.K.] has abolished the antagonistic contradiction between accumulation and consumption’ which is inherent in capitalism’—this does not at all square with statements on neighbouring pages. Those of us who have been following Soviet affairs with interest over the past years would say that such a contradiction has been basic to the changes in policy and top personnel which have been going on. The growth in the size and cultural and educa- tional level of the Soviet people has made them clamour ‘for more consumption goods (this is quite natural and nothing to do with capitalist mentality), while heavy emphasis has con- tinued to be laid on the building up of means of production. You say yourselves: ‘The level reached in the production of consumer goods and the rate of its growth are still not in accord with the increased needs of the population for these goods.’ The reason is that the demands of consumption are in contradiction with those of accumulation. Why try to deny such an obvious economic reality with a benign formula? Take another of your statements. Perhaps the translator has not been kind to you here, but I must make use of the English version: ‘As a result of the considerable increase in recent years of the real wages of workers and other employees and also of the incomes of collective farmers, the demand of the working people for various commodities is developing much more rapidly than the increase in the output of mass consumer goods and food products’ (p. 548). Perhaps you will be able to explain how real wages can increase considerably if the supply Three Speeches I WOULD LIKE to express my disagreement with Michael Banda’s analysis of three speeches made by three leading mem- bers of the Chinese Communist Party and the political con- clusions he draws. Unfortunately many leading political com- mentators who do not readily take at their face value the utterances of Soviet leaders, particularly after the Twentieth Congress revelations, today fall easy prey to the statements and speeches of the present leaders of the New China. This is understandable in a way, as China has undergone a mighty Communications 157 of goods is increasing less rapidly than demand (do you meaa monetary demand?) and how this can be squared with the alleged harmony of accumulation and consumption at that time. Or take the statement on the previous page that ‘frorn 1940 to 1952...the gross output of agriculture in comparabiec prices increased overall by only 10 per cent—which clearly set sharp limits to the rate of increase in real income as far as food consumption is concerned. Allowing that the war had a good deal to do with this, does it not perhaps suggest that the method of agricultural collectivization was somewhat less suc- cessful than you claim and that the ‘antithesis between town and country’ was still an active force? Or perhaps agrarian policy was wrong; it has recently been admitted that Stalin was not a genius in this sphere. Perhaps later editions of your book will have to down-grade him in other connexions, too. I would like to raise one final point. You find it necessary to defend at length, as good socialist practice, the payment of labour according to quantity and quality supplied, the need to appeal to the ‘material interest’ of the worker through differen- tials. Iam not a defender of full income equality, but I should like a frank statement of just how far inequality has been car- ried under ‘socialism’ as practised in the USSR. Let us have in the chapter on national income a real break-down of the income by income groups so that we can see what share goes to, say, the 15 per cent of highest-paid officials, managers, technicians, ‘working intelligentsia’ and so on through the various ‘income brackets’. Unless there is something to hide there seems no reason why this should not be done. And while you admit that there is still some way to go before the USSR catches up with and surpasses the level of productivity in the advanced indus- trial countries, why not admit too that absolute levels of income on a comparative basis are not yet on the side of the USSR, even as far as the working people are concerned? I am ready to admit that the basic achievements of the October Revolution in certain spheres have proved themselves over the years. The nationalized property relations and planned economy which the Revolution made possible have proved themselves capable of exceptionally high rates of economic growth, establishing the USSR as the world’s second industrial power. But the conquests of the revolution have been uneven and incomplete. The retention, under new names, of bourgeois norms of distribution, the existence of legalized and surrepti- tious forms of privilege (and thus of considerable inequalities of material conditions), the substitution of compulsion for persuasion (for example in the Labour Code), the absence of democracy in the factory and the trade union (except on paper), the scarcity of certain consumer goods and exceptionally low standards for many in such spheres as housing (side by side with luxury standards for a minority): all these show that a long road has to be travelled before the social structure in your country can claim the proud title of ‘socialist’. Your text- book has not convinced me to the contrary, though such was the purpose of its pseudo-Marxist apologetics. I hope that the sharpness of many of my criticisms wili not prevent you from sending me a reply. Yours in anticipation. TOM KEMP and progressive revolution which has shaken the old imperialist world to its foundations, while the Soviet Union has, at least on the political plane, departed farther and farther from the principles of the great October Revolution. And this is vividly in the memory of the present generation. It is not surprising therefore that the Chinese leadership has escaped the same penetrating and searching critique that the Soviet leadership has been subjected to by socialists. Material on China, and the revolution in particular, is scanty. But this should not prevent a correct general appraisal of the present state of affairs in China.

[p035] The article ‘Three Speeches’ by Michael Banda [Labour Review, vol. 2, no.4, pp. 103-6, July-August 1957] shows a marked and defined tendency to accept at face value the three speeches by Mao Tse-tung, Liu Shao-chi, and Chou En-lai. The distinct impression is left, for instance in his treatment of China’s industrialization policy, that the Chinese communist leadership in its own empirical and blundering way has dis- covered that the Stalinist method of breakneck industrializa- tion—itself derived from the Stalinist theory of socialism in one country—just does not work. It is therefore forced willy- nilly, despite statements and pronouncements to the contrary by Mao and Chou, to ‘depart from Soviet methods’, that is, Stalinist methods. An illustration of this method of analysis is given in Michael Banda’s treatment of the ‘scissors crisis’ (i.e the growing discrepancy between agricultural and industrial prices leading to a rupture between the working class and the peasantry) as seen by Liu. He writes: “The second blow to the utopian “theory” of Stalinism came when the régime modified its policy in relation to light industry. The point is made in Mao’s speech, but is more fully elaborated in Liu’s speech where he warns the party of what Trotsky once figuratively termed the “scissors crisis”. (p. 104) * * * He then quotes an extract from Liu’s speech proving the point that Liu does, in fact, recognize the existence of the Scissors crisis—but then he adds the following comment to it: ‘This departure from Soviet methods will undoubtedly have repercussions in the Stalinist world—the assertions of Mao and Co. to the contrary notwithstanding,’ The mere fact that Liu recognizes the ‘scissors crisis’ does not automatically or necessarily imply that Liu and the Chinese Five Year Plan will now depart from ‘Soviet’ methods. Surely this is very impressionistic. However this is by no means the central weakness of the analysis. The principal weakness is to be found in the author’s comments on the Chinese bureaucracy. He makes the surprising comment that ‘potentially the most sinister and evil pheno- menon in China today is the prolific growth of bureaucracy in the State and party apparatus’. (My emphasis—E.S.H.) If ‘the most sinister and evil phenomenon in China today’, ‘the pro- lific growth of bureaucracy’ is as yet only potential, then I find it difficult to explain why Mao Tse-tung is so alarmed about Hungary. Hungary was the extreme expression, not of a poten- tial prolific growth of bureaucracy, but of the realization of this growth. If, as Michael Banda suggests, the growth of bureaucracy is still potential, then he is in fact comparing Mao’s China with Lenin’s Russia in the early heroic phase (1917-23). That this is the author’s view is lent support by the sentences which follow. He writes: ‘The further growth of this cancerous formation threat- ens [!] to separate the party and the State from the people. Such a state of affairs would inevitably lead to a new Hungary on a much vaster scale.’ * * The gist of the author’s views on the ‘new’ course of the Chinese Communist Party is to be found here. At the present time the party and State are not separate from the people. His conclusion follows logically: Mao is not concerned about 2 Hungarian experience or repeat performance at this particular point in time, but as a future possibility. I submit that these views do not at all correspond with the real situation in China today. Mao and his Stalinist leadership fear that the very real bureaucracy that grips the industrial de velopment of China will precipitate a new Hungary on Chinese soil. Mao’s speech is designed, not to adjust the leadership and bureaucracy to ‘non-Soviet’ methods (i.e., empirically ad- just itself to the real needs of the Chinese revolution) but to protect this same bureaucracy from the fate that its Hungarian counterpart underwent last year. Surely this is the real point of these speeches. London, S.W.