Discussion on the Issues of Political Economy

Discussion on the Issues of Political Economy, 15 February 1952

Discussion on the Issues of Political Economy

(15 February 1952, the discussion started at 22.00 and
ended at 23.10)

Question
: May the
Remarks on Economic Questions

be published in the press? Can we use your
Remarks
in scientific,
research, pedagogical and literary works?

Answer
: We should not publish the
Remarks

in the press. The discussions on the questions of political economy were held in
camera
and the people do not know about them. The speeches of the
participants of the discussions were not published. It would not be understood if I come out in the press with my
Remarks.

The publication of the
Remarks
in the press is not in your interest.
It would be interpreted as if everything in the textbook has been defined beforehand by Stalin. I care about the authority of the textbook. The textbook must have an immaculate reputation. It would be appropriate if the contents of the
Remarks
come to be known by the people from the textbook.

One should not refer to the
Remarks
in the press. How can you refer
to a document which has not been published? If you like my
Remarks
then
use it in the textbook.

You may use it in your lectures, the faculty and political circles but without any reference to the author.

If an insufficient number of copies have been printed then we can make some more, but it should not be published in the press. The textbook gets published, a year or two passes then the
Remarks
may be published. It may then be
included in one of the volumes of the works.

Question
: [K.V. Ostrovityanov] In your
Remarks
on Economic Questions
consumer commodities are mentioned, but are the means
of production also commodities in our system? If not, then how do we explain the use of cost accounting (
khozrashyot -- tr.
) in the sectors producing
means of production?

Answer
: Commodities are everything that are freely
sold and bought, for example bread and meat etc. Our means of production cannot in essence be judged to be commodities. These are not consumer items that go into the market and which are bought by anyone who wants them. The means of production we allocate ourselves. They are not a commodity in the generally accepted sense, not that commodity which exists under capitalist conditions. There the means of production are commodities. Here the means of production cannot be called commodities.

Our cost accounting is not the same cost accounting which operates in the capitalist enterprises. Cost accounting under capitalism operates in a way that unprofitable (
nerentabel'niye--tr.
) enterprises are closed down. Our
enterprises may be very unprofitable, they may be altogether unprofitable. But the latter are not closed down in our system. They receive subsidies from the State budget. Cost accounting in our system exists for the purposes of accounting, for calculation and for the balance. Cost accounting is used as a check for the enterprises' executives. The means of production only formally figure as commodities in our system. Only the items of consumption fall in the sphere of commodity circulation with us and not the means of production.

Question
: [K.V. Ostrovityanov] Would it be correct
to call the means of production as 'commodities of a special kind'?

Answer
: No. If there is a commodity, it must be
sold to everyone who wants to buy it. Expressions like 'commodities of a special kind' are no good. The law of value impinges on production of the means of production through the realisation of the consumer commodities. The law of value is needed here for calculations, for the balance and for checking the feasibility of the activities.

Question
: [K.V. Ostrovityanov] How ought one to
understand the terms -- general crisis of capitalism and crises of the world capitalist system, are they one and the same thing?

Answer
: They are one and the same thing. I
underline that one should speak about the crisis of the world capitalist system on the whole. With us often only a particular country is taken up, which is not correct. Earlier people would study the capitalist system only on the basis of the conditions in a single country -- England. Now for the evaluation of capitalism one should not take up a particular country but the capitalist system as a whole. The economy of all the capitalist countries is intricately interwoven. Certain countries are moving ahead at the cost of other countries. The limitations of the contemporary capitalist market must be taken into account. An example -- the USA find themselves in a good situation having eliminated competition from their main competitors -- Germany and Japan. The USA hoped to increase their production twofold on the strength of their monopoly. But nothing came of their plans of doubling production. The calculations fell through. One country -- the USA -- moved ahead and the others fell behind. But the situation is unstable, the situation would change in the future. A single country cannot be typical for evaluating the condition of capitalism. It is not correct to take up a single country, one should take up capitalism as a whole. I underline: one must study the world system as a whole, and with us we have got used to taking up a single country.

Question
>: [D.T. Shepilov] Can we consider the
outline of the section 'Socialist mode of production' that is given in the Proposals

on the draft of the textbook to be correct?

Answer
: I agree with the outline contained in the
Proposals
.

Question
: [A. Arakelyan] How do we call those parts
of the National Income of the USSR which were given the name: 'the necessary product' and 'the surplus product'?

Answer
: The concepts of 'necessary and surplus
labour' and 'necessary and surplus product' are not suited for our economy. Does all that which goes towards welfare and defence not constitute necessary labour? Is the worker not interested in it? In a socialist economy we should be making the distinctions in approximately the following manner: Labour for ones own self and labour for society. That which in relation to a socialist economy was earlier termed as necessary labour coincides with labour for oneself, and that which earlier was called surplus labour is labour for society.

Question
: [A. Arakelyan] Is it correct in place of
the concept of the 'transformation' of the law of value in the USSR to apply the concept 'limiting the operation' of the law of value?

Answer
: The laws of science cannot be created,
destroyed, abrogated, changed or transformed. The laws must be taken into consideration. If we violate them, we suffer. An opinion is widespread with us that the time of the (operation of the --
tr
.) laws is past. This point
of view is frequently found not only among economists but also those engaged in practical work and politicians. This does not correspond with the concept of law. The proposition about the transformation of laws is a digression from science, this comes from philistinism. It is not possible to transform the laws of nature and society. If it is possible to transform a law then it is also possible to abolish it. If it is possible to transform and abolish laws then it means that 'everything is possible for us'. Laws must be taken into consideration, grasped and utilised. It is possible to limit their sphere of impact. This is so in physics and chemistry. This is so for all science. One should speak not of transforming the laws but of limiting their sphere of operation. This would be more precise and scientific. No imprecision must be allowed in the textbook. We are coming out with a textbook on political economy before the whole world. It would be used at home and abroad.

We do not limit the laws, but the material objective conditions. When the sphere of operation of the law is limited the law looks different. The sphere of operation of the law of value with us is limited. The law of value is not exactly what it was under capitalism. It is not transformed with us, but limited by the force of objective conditions. The main thing is that here private property has been eliminated and labour power is not a commodity. These are the objective conditions that determine the limiting of the sphere of operation of the law of value. This limiting of the law of value occurs not because we wanted it but because such is the necessity, such are the favourable conditions for such a limitation. These objective conditions impel us to limit the sphere of the operation of the law of value.

Law is a reflection of the objective process. The law reflects the correlation between objective forces. The law shows the correlation between the causes and the result. If a certain balance of forces and certain objective conditions are given then inevitably certain results follow. One has to take account of these objective conditions. If some of the objective conditions are missing then the corresponding results will be different. With us the objective conditions have changed as compared to capitalism ( there is no private property and labour power is not a commodity), therefore, the results are also different. The law of value has not been transformed with us, but the sphere of operation is limited by virtue of the objective conditions.

Question
: How should one understand the category of
profit in the USSR?

ANSWER
: A certain amount of profit is needed by us.
Without profit we cannot create reserves, have accumulation, support fulfillment of defence tasks and satisfy social needs. Here we can see that there is labour for one self and labour for society. The word profit itself has become very dirty. It would be good to have some other concept? But what? Perhaps net income? Under the category profit we have hidden an altogether different content. We do not have a spontaneous capital flow and no law of competition. We do not have the capitalist law of maximum profit nor the law of average profit. But without profit it is not possible to develop our economy. For our enterprises even minimal profits are adequate and, sometimes, they can work without profits on account of profits of other enterprises. We ourselves distribute our resources. Under capitalism only profitable enterprises can exist. In our system we have very profitable (
rentabel'niye
--
tr.
),
somewhat profitable and totally unprofitable enterprises. During the first years our heavy industry did not produce any profit but started to do so later on. In general the enterprises of the heavy industry during the initial period are themselves in need of means.

Question
: [A.I. Pashkov] Is the position of the
majority of the participants in the economic discussions on the issue of the linkage of the Soviet money and gold correct? Some of the followers of the minority, which rejects this linkage, state that in the
Remarks on Economic
Questions Connected with the November 1951 Discussion
there is no answer to
this question.

Answer
: Have you read the
Proposals
? In my
observations it is mentioned that on other issues I do not have any remarks regarding the
Proposals.
That means that I agree with the
Proposals

on the issue of the linkage of our money with gold.

Question
: [A.I. Pashkov] Is it correct that
differential rent in the USSR must be fully extricated by the state, as it was asserted by certain participants of the discussions?

Answer
: On the question of the differential rent I
am in agreement with the opinion of the majority.

Question
: [A.D. Gusakov] Does the linkage between
Soviet money and gold means that gold is a monetary commodity in the USSR?

Answer
: Gold is a monetary commodity. Earlier with
us the shape of things with the cost of production of extraction of gold was not good. Later we took steps to bring down the cost of production and things got better. We made a transition to the gold standard. We take the position that gold becomes a commodity and we will achieve it. There is, obviously, no necessity to exchange money for gold. It is not prevalent even in the capitalist countries.

Question
: [I.D. Laptev] Do the Soviet state
finances belong to the sphere of the basis or to the state-political superstructure?

Answer
: Whether it is the superstructure or the
base? (laughs). In general lot has been said on the issue of the base and the superstructure. There are people who even relegate Soviet power to the basis.

If you leave aside generalisations about basis and superstructure on this issue, then we have to proceed from socialist property. Our budget is fundamentally different from a capitalist one. Under capitalism every enterprise has its own budget, and the state budget encompasses a more narrow sphere than our state budget. Our budget covers all the income and expenditure of the peoples' economy. It reflects the status of the whole of the peoples' economy and not simply expenditure on management. It is a budget of the whole of the peoples' economy. Therefore, in our finances the elements of the basis predominate. But there are also elements of the superstructure present in it, for example, the expenditures on management belongs to the superstructure. Our state oversees the people's economy, our budget includes not only expenditure on the managing apparatus but on the whole of the people's economy. The budget has elements of the superstructure, but the elements of the economy predominate.

Question
: [A.V. Bolgov] Is it correct that the
agricultural
artel
would exist during the whole period of uninterrupted
transition from socialism to communism whereas the agricultural commune is related only to the second phase of communism?

Answer
: The question is meaningless. The

artel
is moving towards the commune, it is evident. The commune will be created when the functions of the peasant household of servicing their personal requirements will vanish. There is no need to hurry with the agricultural commune. The transition to the commune requires the solution of a mass of questions, construction of good canteens, laundries, etc. The agricultural communes will be created when peasants will be convinced of the feasibility of a transition to the communes. The
artel
does not correspond to the second
phase of communism, more likely the commune corresponds to communism. The artel

requires commodity circulation and, at least, for the time being does not allow for products-exchange, and more so does not allow for direct distribution. Products-exchange is after all still exchange, and direct distribution is distribution according to needs. As long as commodity production, sale and purchase exist, we must take these into account. The
artel
is linked
with sale and purchase while direct distribution will develop only in the second phase of communism. When the agricultural
artel
will grow into a
commune is difficult to say. It is not possible to say that the second phase of communism would already be in existence when the commune would be created. But to say that without the commune it is not possible to make the transition to the second phase of communism is also risky.

One should not imagine the transition to the second phase of communism in a layman's terms. There would be no particular 'admittance' into communism. Steadily, without knowing ourselves we will enter communism. Its not like an 'entry into the city', the 'gates are open -- enter'. In many of the collective farms the women members (
kolkhoznitsi -- tr.)
still do not want to be
released from the bondage of household work, or hand over the cattle to the kolkhoz
,
so as to receive meat and milk products from it. But as for now they do not refuse to do so in the case of fowl. These are only the first green shoots of the future. At present the agricultural
artel
is not an impediment to
the development of the economy. During the first phase of communism the artel

will gradually grow into a commune. One cannot draw a sharp line here.

It is necessary to bring the production in the
kolkhoz
to the level
of whole of the society. There are a mass of complex questions here. The kolkhozniki

need to be taught to have more consideration for the affairs of the society. At present the
kolkhozes
do not want to know about anything
except their own economy. At present there is no integration of the kolkhozes

at the district and provincial level. Should we not make a move from above in this case for creating an All-Union economic organ consisting of representatives of industry and the collective farms that would account for the produce of both the industry and the collective farms. One needs to begin with the accounting of the produce of the state enterprises as also of the
kolkhozes
and then
turn to the distribution first only of the surplus produce. We must set up funds which are not to be distributed, and funds that are earmarked for distribution. It is necessary to steadfastly teach the
kolkhozniki
to have
consideration for the interests of the whole of the people. But it is a long course and one need not to hurry. There is nowhere to hurry to. Things are moving fine with us. The aim is right. The path is clear, and all the orientations are set up.

QUESTION
: [Z.V. Atlas] Why is it that in the
Remarks
on Economic Questions Connected with the November 1951 Discussion the term
'monetary economy' is placed in quotations marks?

Answer
: Once there is commodity circulation, there
must be money. In the capitalist countries the monetary economy, including the banks, leads to the ruination of the workers, the impoverishment of the population and increase in the wealth of the exploiters. Money and the banks serve as means of exploitation under capitalism. Our monetary economy is not the usual one and is distinct from the capitalist monetary economy. With us money and the money economy serve to strengthen the socialist economy. With us the monetary economy is an instrument that we are using in the interests of socialism. The quotation marks are there so as not to confuse our money economy with the money economy under capitalism. The words 'value' and 'forms of value' are used by me without quotation marks. Money is also included here. A lot of factors determine the law of value with us, it indirectly affects the production and directly affects circulation. But the sphere of its operation with us is limited. The law of value does not lead to ruination. The biggest difficulty for the capitalists is the realisation of the social product, the transformation of commodity to money. With us realisation takes place easily, it moves smoothly.

Question
: [G.A. Kozlov] What is the content of the
law of planned and proportional development of the national economy?

Answer
: There is a difference between the law of
planned development of the national economy and planning. The plans may not take into account all that, which would be necessary to have been taken account of according to this law, according to its requirements. If, for example, a certain number of automobiles are being planned, but if along with this the corresponding amount of thin metal sheet is not planned, then in the middle of the year the automobile plants would come to a standstill. If a certain number of automobiles is planned, and a corresponding amount of petrol is not planned for then it would also mean a breach of linkages between the given branches. In these cases the law of planned and proportional development of the national economy makes itself felt in a serious manner. When it is not transgressed it sits calmly and its address remains unknown -- it is everywhere and it is nowhere. In general all laws are felt when they are transgressed, and this does not go unpunished. The law of planned development of the national economy shows the lack of correspondence between the branches. It requires that all the elements of the national economy correspond mutually and develop in correspondence with each other, proportionally. The mistakes of planning are corrected by the law of planned development of the national economy.

Question
: [M.I. Rubinshtein] How is the basic task
of the USSR to be understood in the current period. In determining this task do we need to take as the starting point the figures per head of capitalist production according to the population of 1929 or do we need to take for comparative purposes the updated level of capitalist production which, for example, in the case of the USA due to the militarisation of the economy is higher than that of 1929? Is it correct to consider, as is frequently done in publications and lectures, that the achievement of the quantity of production, indicated in your speech of 9th February, 1946, signifies the decisive economic task of the USSR for the entry into the second phase of communism.

Answer
: The method of calculation which proceeds
from production per capita retains its force. Production per capita is the basic yardstick of the strength of countries. There is no other measurement which replaces this. It is necessary, to proceed not from the level of 1929 but from contemporary production. We require new calculations. It is necessary to compare our per capita production in terms of the current figures of the capitalist countries.

The figures I put forward in 1946 did not signify the decisive economic task for the transition towards the second phase. By achieving these figures we become more strong. This safeguards us from the peril of the enemy assault, from the attack of capitalism. But the decisive task which is indicated in the speech of 1946 does not as yet signify the second phase of communism. Some comrades are too much of a hurry to effect the transition to the second phase of communism. One should not be in excessive haste in this transition as one cannot create the laws. Yet others are thinking of a third phase of communism. The yardstick is old. For the purposes of comparison with those countries which are richer we need to use up to date facts. This means advancing forward.

Drafted according to the notes of Com[rades]

[L.M.] Gatovsky, [I.I.] Kuzminov, [I.D.] Laptyev, [L.A.] Leontyev, [K.V.] Ostrovityanov, [V.I.] Pereslegin, [A.I.] Pashkov, [D.T.] Shepilov and [P.F.] Yudin.

Taken into account are the notes of Com[rades]

Atlas, Arakelyan, Bolgov, Vasilieva, Gusakov, Kozlov, Lyubimov, Rubinstein.

Translated from the Russian by Tahir Asghar.

*