New Economics

FOREWORD TO THE FIRST EDITION

THE theoretical study of the Soviet system of economy undertaken by the author, the beginning of which is here offered to the reader, will be completed in two volumes. The present work is the first, theoretical part of Volume One. The second, historical part of this volume will be devoted to a brief survey of socialist and communist conceptions of socialism. Two chapters of the book, the second and third, as well as my reply to Comrade Bukharin, printed as an appendix at the end of this book, have already appeared in the Vestnik Kommunisticheskoi Akademii. The first, methodological chapter and the reply to opponents of mine other than Comrade Bukharin are published here for the first time.
The first chapter and half of the second chapter of the second, historical part of the first volume have already appeared in print. The whole of the second part, circumstances permitting, will be sent to the printer in the autumn of this year, 1926.
The second volume will be devoted to a concrete analysis of the Soviet economy, that is, of Soviet industry, Soviet agriculture, the system of exchange and credit, and the economic policy of the Soviet state, together with an examination of the first rudiments of socialist culture. In the near future the very important first chapter of the second volume will be published; this chapter will examine the problem of economic equilibrium under concretely existing capitalism and in the economy of the U.S.S.R.
The chapter on socialist accumulation is reproduced here with a few changes in which I have taken into account those objections, of secondary significance, which I regard as justified. In addition, I have eliminated from the exposition the term 'exploitation', used in relation to the process of alienating part of the surplus product of private economy for the benefit of the socialist accumulation fund. Further, I have made a slight transference of material from the second chapter to the third in the interests of greater coherence of exposition.
As regards objections of substance, which I consider unjustified, and also the bitter political attacks to which the second chapter of the book has been subjected—the chapter devoted to the law of primitive socialist accumulation—I must say this, summing up certain lessons of the polemic which has taken place.
The objections of a methodological nature amounted, in the first place, to the claim that it is impossible to examine the Soviet economy in abstraction from the economic policy of the Soviet state, even if it be only a question of abstraction at a certain stage of examination. This first objection, if it be maintained, threatens with inexorable logical inevitability to thrust my opponents into the position of Stammler and his school and of the subjective sociology of Mikhailovsky, Kareyev, and others—a position that does not permit one to escape, in economic theory, from the bog of vulgar political economy, even though this should appear in a 'Soviet' edition, and thereby does not permit a single genuine step forward to be made in the scientific study of the Soviet economy.
The second methodological objection has been directed against the proposition developed in this book that economic equilibrium in the Soviet economy is established on the basis of conflict between two antagonistic laws, the law of value and the law of primitive socialist accumulation, which means denial that there is a single regulator of the whole system.1 (See for this the report of the debates at the three sessions of the Communist Academy devoted to discussion of my address on 'The Law of Value in The Soviet Economy'.)
Those objecting to this presentation of the problem have been obliged, in the first place, to reveal their own naturalistic, non-historical conception of the law of value, in which the way in which economic processes are regulated under commodity production is confused with the regulatory role of labour-expenditure in social economy in general, the role, that is, which this expenditure has played and will play in any system of social production. In the second place, my opponents have been obliged, through acknowledging the law of value as the unique regulator of the economic system of the U.S.S.R., to deny utterly both that our state economy is socialist in type (however primitive this type may be) and that there is a struggle in our economy between the principle of commodity economy and the socialist tendencies of development, a struggle which is obvious to everybody. Thus my opponents have been forced to come close to the Menshevik conception of our economy as an historically belated shoot of capitalist economy.
The fundamental objection to the law of primitive socialist accumulation which I have formulated, and which is now more fully substantiated in this book, amounts to the following argument: 'Yes', say my opponents, 'we have socialist accumulation, but there is no law of primitive socialist accumulation, nor has its existence been demonstrated even to the slightest extent.' In short, the struggle between the principle of socialist planning and the market exists, but there is no struggle between the law of value and the law of primitive socialist accumulation. The whole profundity and unanswerableness of this objection is most easily grasped, without superfluous words, if it be put as it was put to me by one of my readers, in a private conversation. He said: 'What's the point of talking about a law of socialist accumulation? The Soviet Government will accumulate all it can, within the bounds of possibility.' In such an interpretation the law of socialist accumulation is reduced to a decree of the Council of People's Commissars on socialist accumulation. I am convinced that there is no difference of principle between the first argument and the second. To admit the existence of objective regularity in all the processes and tendencies of commodity economy, an objective regularity concentrated in the law of value, while denying objective regularity in the process of expanded socialist reproduction, as it develops in spite of and in conflict with the law of value, and with definite proportions (dictated from without, with compelling power) of accumulation by the Soviet State in each particular economic year, is to exclude the latter process from the field of operation of the law of causality, to undermine the basis of determinism—that is, the basis of all science in general. If things are not to get so tragic as that, my opponents must say frankly and honestly: 'There is a law here, but what it is we don't know'. Such an answer, it is true, would not be much of a recommendation for my critics' understanding of the laws of development of the Soviet economy, but at any rate they would not be hindering other people from working at theoretical examination of these laws. One has to possess a certain body of knowledge before it can be raised to the level of theory; it is impossible to create a theory out of ignorance. It is not possible with limited or, if you prefer, unlimited complacency to elevate general phrases about the New Economic Policy, about the struggle between two principles, and so on, beyond the limits of the analysis of our economy which has been achieved in practice; it is impossible that the type of vulgar Soviet economist who is at present, with a few exceptions, the hero of the day in our economic press, both periodical and non-periodical, should be considered the normal type of Soviet, Marxist, Bolshevik economist in general.
The next objection relates to non-equivalent exchange with private economy. I must frankly admit to the reader that to this day I do not precisely know where, in this objection, ideas of a political order, propagandist ideas, and simple misunderstandings end, and where quite ordinary theoretical ignorance begins. Under capitalism non-equivalent exchange between large-scale and small-scale production, in particular between capitalist industry and peasant agriculture, though forced to a certain extent to adjust itself in the price field to the value-relations of large-scale capitalist agriculture, is, in the sphere of purely economic relations and causes, a simple expression of the higher productivity of labour in large-scale production as compared with small. In the Soviet Union non-equivalent exchange is at present connected above all with the technical backwardness of our industry, the lower level of productivity which prevails in it as compared with the advanced capitalist countries, the higher cost of production of articles, and, finally, the historically and economically inevitable alienation, by means of price policy, of part of the surplus product of private economy for the benefit of the socialist accumulation fund. This means that as long as we have not caught up with capitalism nor completed the period of primitive socialist accumulation we shall inevitably have non-equivalent exchange with the countryside, owing both to the causes which condition non-equivalent exchange in world economy and therefore under normal conditions determine the maximum prices of our agricultural products, and to causes specifically connected with the conditions of existence of the Soviet system of economy. When the latter causes have disappeared the former will remain. This in the first place; but, in the second place, in so far as the development of large-scale and medium co-operative and socialist agriculture, and of the proportion of exchange of products between it and state industry, will dictate to non-co-operative agriculture (that is, for a long time, to the greater part of the countryside), non-equivalent exchange will to that extent not result from the undeveloped and backward state of socialist industry but, on the contrary, from the development of the co-operative-socialist sector of agriculture and the growth of the productivity of labour in that sector. In this situation non-equivalent exchange will be merely the expression of the unprovability of small-scale production compared with large. And, contrariwise, equivalent exchange, in these conditions, would only mean a tax on socialism for the benefit of small-scale production, a tax on machinery in favour of the three-field system, the wooden plough, and economic Asiaticism, Is this what my opponents advocate? And what in general do they advocate, beyond impotent phrases in the spirit of a new Narodism?
In conclusion, I should like to say a few words on the practical significance of serious theoretical study of the Soviet economy. The heads of capitalist enterprises, and also capitalist governments, can permit themselves the luxury of ignorance in the field of economic theory. The law of value fulfils, more surely than they or their managers, professors, and parliamentarians, the function of regulator of their economy and corrector of all their calculations. In the Soviet Union, where there is a centralized state economy of the proletariat and the law of value is restricted or partly replaced by the planning principle, forecasting plays a quite exceptional role in comparison with its role in capitalist economy, and mistakes in forecasting, owing to the centralized conduct of the economy, can have graver consequences than mistakes made by the heads of a private economy, where tendencies in one direction are counter-balanced, often through the law of large numbers, by contrary influences. But if you are to direct and guide correctly, that means forecasting, and forecasting means illuminating with the searchlights of theoretical analysis that field of phenomena where those very causes are engendered of which we want to know the consequences beforehand. There, where the intuition of such a genius and such an economist of genius as Lenin was cannot now help us by way of personal influence, theory is the only true and most democratic means of furnishing all concerned with scientific foresight in the leadership of planning. This explains the genuinely productive role of a correct scientific theory of the Soviet economy; this also entails the fact, still insufficiently recognized among us, that the socialization of industry means by its very essence a transference of responsibility in economic leadership to science, to an extent quite unknown in capitalist economics. The growing role of the State Planning Commission is a direct index of this process.
But the theory of Soviet economy can be created only as a result of collective work. And therefore the task of this book will to a considerable extent be achieved if this attempt stimulates other economists to concern themselves with the same subject and if by our joint efforts we advance the work whose fulfilment is insistently demanded of us by the developing socialist economy of our country.



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