New Economics 2

FOREWORD TO THE SECOND EDITION
THE first edition of the first part of The New Economics was sold out in a few weeks. The author cannot, therefore, complain of inadequate attention to his work by the reading public. Even less can he complain of silence on the part of his numerous opponents. During a period of two or three months the book was subjected to attack not less than ten times by a whole range of critics. Some very weak vessels among them will be dealt with in the appendix; the most learned of them, Comrade Bukharin, I propose to answer in this foreword.
In his articles published as feuilletons in Nos. 148,150, and 153 of Pravda and entitled 'A Contribution to the Question of Economic Regularity in the Transition Period', Comrade Bukharin attempts a systematic criticism of the basic propositions of this book and in doing so sets out here and there in positive form his own point of view on certain matters which he has clarified for himself. Generally speaking, I should have preferred a different division of labour between us, namely, that Comrade Bukharin should have first set out positively his point of view on the laws of development of the Soviet economy, leaving me merely to criticize what I regard as incorrect in his constructions. This would have been more in accord with his theoretical 'status'. But if there is no other way, if Comrade Bukharin can now expound his point of view only in polemics with other people, leaving to them the risk of setting forth and solving new problems, then there is nothing to be done about it, and one must lay hold of whatever is offered.
Comrade Bukharin's feuilletons are not finished yet. But since it is not known when they will be finished, and meanwhile the ideas expressed in them, polemical thrusts and simply false inter¬pretations of my work, have enjoyed wide circulation among the reading public, I consider that I have the right to reply to his critique even though it is not yet completed. My reply is not conclusive. It will be continued when Bukharin's critique is continued.

Comrade Bukharin begins his critique with ironical remarks about the 'professorial airs' which he has observed in my work and recalls that we were 'properly ticked off by Lenin' for this sort of 'erudition'. I must say that I, while entertaining no personal inclination to 'putting on airs', have fought and will continue to fight, like any other Marxist, in support of the Marxist champion¬ship of economic science against the conjunctural approach to our economy, regardless of whether such a struggle against vulgar economics is regarded by other people as modest or not. The charge of intellectual arrogance against Marx and Marxists is an old one. We have always been utterly indifferent to it.
As regards Lenin's dislike of 'erudition', Comrade Bukharin's quotation marks clearly show what kind of erudition is meant. Lenin did not like pseudo-erudition. To every new and serious piece of research he gave the greatest attention, regardless of the form in which it was set forth. Lenin's modesty as a theoretician, which we should all imitate, is irrelevant to our fight against vulgar economics. At the same time, being truly a great democrat in his scholarship, he did not like superfluous erudition in terminology, regarding all that as vain tinsel, which hinders the worker from understanding what we are writing about, if it is possible to say essentially the same thing in a simpler way. However, he would willingly have forgiven the author of The Economic Theory of the Leisure Class, Imperialism and World Economy, and The Economics of the Transition Period all that was displeasing in these works and even his disagreements on serious points, if he could have foreseen that his critical remarks would be understood by Comrade Bukharin as a direction to make his way from these brilliant works, through the casuistical smart-aleckries of his articles against 'Trotskyism', to the grey emptiness and dreariness of his book on Kautsky.
After these necessary remarks let us hasten to pass on to the matters under dispute.
The most characteristic feature of Comrade Bukharin's whole critique is that he has no position of his own on a number of important questions raised in my book, no position, that is, in the sense of positive views. This sterility of his critique strikes the eye very forcibly just because he has felt obliged to maintain all through the polemic an appearance of superiority to me, to convince the reader that I am simplifying very complex problems which he, Bukharin, has examined throughly in all their difficulty. As a result, after the critique of my theories, the reader avidly expects from Comrade Bukharin an exposition of his own point of view in positive form in order to find in it rest for his theoretical conscience. But, alas, he finds in Comrade Bukharin's work only a full stop where the exposition ought to begin, or else hears all sorts of commonplaces which are familiar to him in other forms in elementary textbooks of Marxism. Comrade Bukharin hides in the smoke of his polemical gunfire his complete bankruptcy when it comes to understanding the laws of development of the Soviet economy. He grievously underestimates the qualified reader of his work, who has grown up in recent years and cannot be caught with threadbare phrases about 'revision of Leninism' if the critic himself has nothing to offer.
What has just been said applies fully to the question with which Comrade Bukharin begins his attack, that of the method of investigating the regularity of the Soviet economy. As the reader may remember, in my book I state that, in order to make a scientific analysis of the Soviet economy, at a certain stage of investigation it is necessary to abstract oneself from the policy of the Soviet state and from its concrete economic policy and to concentrate on analysing in their pure form the tendencies of development of the state economy on the one hand, and of the private economy on the other. To explain the economic policy of the state by economic policy is a perfectly senseless procedure, which is called in logic idem per idem (explaining something by itself). Such 'investigation' supplies nothing but descriptions of obvious facts. But in the Soviet Union the organs of the state as a political organization are merged with the organs which guide the state economy; thus, in addition to the economic necessity resulting from the development of the state economy on the one hand and of the private economy on the other, the economic policy of the state is influenced also by factors of a purely political kind. Therefore, in order to distinguish the operation of each of these factors, it is necessary to begin with the most important, that is, with the economics of the state economy and of the private economy, seen from the angle of their fundamental tendencies of development; and then, at a later stage of investigation, to analyse the operation both of conjunctural factors (in particular the conjunctural resistance of private economy to the development of state economy) and of purely political factors.
What does Comrade Bukharin put forward in opposition to this kind of methodological approach?
In the first place he quite unjustly alleges that I propose to make an abstraction either from the economic policy of the state or from politics in general. I propose making a provisional abstraction from both of these. As regards politics, Comrade Bukharin appears to agree that this is possible, but not as regards economic policy. This only shows that he has not sufficiently thought the whole problem out and that he opposes me in an eclectic manner. Just imagine, reader, that for political reasons we conclude, say, a trade agreement which is unprofitable for our economy, an agreement which in the absence of these reasons we should not have concluded; or imagine that, for political reasons, we reduce taxation of small-scale production, although economic considerations dictate to us not a reduction but an increase in taxation. In these cases the acts of the Soviet Government, dictated by the political situation, are acts of economic policy and have long-term economic consequences. How is it possible in such cases to make an abstraction from politics without making an abstraction from that part of economic policy into which pure politics passes over? The norms of 'pure' politics are transformed into norms of economic policy. If Comrade Bukharin agrees that it is possible to make an abstraction from politics he is thereby forced to recognize that it is possible to make an abstraction also from economic policy and the constituent parts of it. But ... if a claw is caught, the whole bird is lost.
This logical inconsistency of Comrade Bukharin's appears in full clarity if we examine his first arguments against my methodological approach.
On the one hand he writes:
Let us, indeed, pose this question: in what is the growth of the rational principle at the expense of the irrational expressed? The answer will be quite unambiguous: in the growth of planning. What is the basis of this planning? The answer is also obvious: the growth of the state-socialist elements in the economy, the growth of their influence and the growth of their relative weight. In what, finally, does this process find its expression from the standpoint of the special characteristics of the regularity of the transition period? In this fact, that spontaneous
regulators are replaced by conscious ones, that is, by the economic policy of the proletarian state (which from a certain period onward loses its class character, that is, denies itself, that is, ceases to be a state).
To make an abstraction from the economic policy of the proletarian state means taking the laws of the transition period outside their historical characteristics, outside the development of the 'spontaneous' into the 'conscious', that is, doing precisely what Comrade Preobrazhensky quite properly protests against. (See Pravda, No. 148.)
But, on the other hand, concluding his discussion of this entire question, Comrade Bukharin says:
'From our analysis it follows that it is absurd to make an ab¬straction from the economic policy of the proletarian state power, for this would mean making an abstraction from the planning principle. But it is quite admissible at a certain stage of analysis to make an abstraction from the specifically political influences of definite purely-political conjunctural fluctuations.'
It follows that it is impossible to make an abstraction from economic policy, because this would mean 'taking the laws of the transitional period ... outside the development of the spontaneous into the conscious'; but that from politics, which passes over into the norms of economic policy, it is possible to make an abstraction, although the state takes one decision or another based on political considerations quite consciously. In this case consciousness does not, in Bukharin's opinion, prevent us from making an abstraction. This miserable confusion in one and the same article, in respect of a fundamental methodological question, shows with complete clarity that either my critic himself attributes no serious signi¬ficance to his first argument or else that he has taken fright at the logical conclusions to be drawn from it, which, as we shall see below, inevitably lead to the withdrawal, after the socialist revolution, of a whole field of social phenomena from the sphere of historical-materialist investigation.
But let us examine this line of argument from a different point of view. Let us admit that the Soviet state outlines quite consciously a whole system of measures in the field of economic policy. We ask, are the decisions to carry out these measures, and their practical carrying-out, causally conditioned? My critic answers this question in the affirmative, regards the opposite view as 'cheap idealism' and does not consider it worth while to spend any length of time on this quite clear question.
But if the consciously adopted economic policy of the state is causally conditioned, the question now arises: by what is it conditioned and how is this conditionality most easily and correctly to be discovered? Is it not possible for us here, so as not to abandon the basis of Marxism, to distinguish in this economic policy the influence of purely political factors from that of economic factors, and then, among the latter, the influence on the state economy of other economic forms?
My opponent agrees that we can distinguish politics from economics at a certain stage of investigation. Here the conscious character of the economic policy adopted by the Soviet state does not prevent us from making an abstraction from the purely political influences which affect economic activity. We ask why this 'conscious' character of policy does not allow us to distinguish the influence of non-socialist forms of production on the develop¬ment of the state economy of the proletariat. Comrade Bukharin has brought forward nothing to show that it is impossible and, we say with confidence, he will never bring forward anything to this effect, because the whole of this argument of his has been made up out of nothing. He has also not adduced, and will not adduce, a single concrete example of the impossibility of making the abstraction which we are discussing. We, however, can bring forward as many concrete examples as are needed to show that the method of analysing the regularity of the Soviet economy which we recommend is both perfectly practicable and extremely fruitful. Let us analyse, for instance, the economic policy of the Soviet state on the central problem of constructing and putting into effect a general economic plan for a particular year. Let us assume that a certain level of wages, certain quantities of exchange with private economy, certain quantities of accumulation, and the need to observe certain proportions in the distribution of productive forces between branches, taken all together, make possible the development of state production by a maximum of 25 per cent. This is the optimum of expanded socialist reproduction and the normative target of the state's economic activity in the year concerned. But, owing to political considerations, the state is obliged, let us say, to reduce the taxation of small production in the country by 150 million roubles, which reduces the level of accumulation. This reduction in accumulation reduces the possibility of developing industry, let us say, by 3 per cent. Let us suppose that this is the total deduction which politics makes from the optimum of development of the state economy. But in economics too there are deductions, due to the private economy. It turns out, let us say, that, because they prefer to wait for an im¬provement in prices, the peasants put 200 million poods of grain too little on the market, grain which was counted on as a fund for exports. As a result, our exports are less than they might have been, and imports fall short of the expected level by the corresponding amount of 250 million roubles, as a result of which we have a reduction in our acquisition of machinery, cotton, wool, rubber, &c. In consequence of this opposition from the 'peasants' plan', the state economy is contracted, let us say, by another 5 per cent. As a result, instead of a development of industry by 25 per cent, compared with the previous year, a development which would have been economically quite possible under favourable conditions, we have, owing first to political causes and, secondly to the pressure of private economy upon us, an increase in production by only 17 per cent. All this can be taken into account from the start, when the plan is being worked out, or it can come to light when the maximum-development plan is being put into effect. The essence of the matter is not affected one way or the other. In practice we find both things happening: we find both preliminary allowance for the resistance of private economy and the influence of private on state economy, an allowance which expresses itself in a cut in the optimum figure in the plan of development of state economy; and we find corrections, neces¬sitated by private economy, in the practical implementation of the given plan. But whether the results of the resistance of private economy and its tendency of development have been foreseen or whether these resistances are discovered post factum, arising unexpectedly, in both cases these results act as objective forces, the influence of which we can most easily take into account if we begin our analysis with an investigation of the optimum of development of the state economy.
It is self-evident that analysis of the optimum tendency assumes fundamentally, as its very basis, all the main features of the Soviet economy. To ascribe to me such a stupidity as that I make an abstraction from the working class as the subject of the state's economic policy, from the peasant character of the country, from the economic apparatus of the state, and so on, is possible only when there is a complete bankruptcy of genuine arguments, or a bankruptcy which, as with my opponents, is further connected with the absence of any reasoned point of view of their own on the laws of development of the Soviet economy and on all those problems which I deal with positively in my book. The method of analysing the Soviet economy which I have proposed and which I have applied in concrete investigations has its own real difficulties. But none of my opponents, Comrade Bukharin in¬cluded, has any idea of these real difficulties or says a word about them, because none of my critics has apparently so much as thought about all these questions which arise when one attempts a concrete investigation of the regularity of our development. (We shall deal concretely with this matter in the second volume.)
Now I must mention a number of quite inadmissible distortions of my point of view which my critic has made. My work is devoted not to the analysis of the commodity-socialist system in general (though there are also some elements of a general theory in it), nor even to the theory of the Soviet economy in general, but to the theory of the economy of the U.S.S.R. in the period of operation of the law of primitive socialist accumulation. And this means that the investigation, however abstract it may be in its general part, cannot ever make an abstraction either from the existence of the Soviet power and its organs, or from the role of the prolet¬ariat as the subject of the economy, or from the existence of petty production and its tendency of development, or from the sub¬stitution, within certain limits, of planning policy for the spontaneous method of regulation, with all the special character¬istics which result from this fact. I speak only of the need to make abstraction, at a certain stage of investigation, from the concrete economic policy of the Soviet state, insofar as it can never be adequate to the tendencies of development of the state economy, taken in their pure form, which urge the Soviet state towards the optimum of expanded socialist production. And this abstraction from what is the resultant of various factors, made in order to explain this resultant, Comrade Bukharin misrepresents as abstraction from the structural characteristics and organizational forms of the entire system. He writes: 'The economic organs of the state machine are the essential summit of our specific basis.

To make abstraction from them means to make abstraction from the fundamental characteristic of the "new economics".' The reader will perceive what a sleight of hand my theoretically-impoverished critic attempts here. I speak of the concrete economic policy of the Soviet state, from which it is necessary to make abstraction at a certain stage of investigation, in order to explain it—and Comrade Bukharin accuses me of making abstraction from the foundations of the system itself. Everyone appreciates that the economic policy carried out by the system, and the system itself, are two quite different things. The system remains, with all its structural characteristics and all the basic lines of development of its distinctive tendencies, while policy can change, and does in fact, where arithmetical magnitudes are concerned, change every year in certain respects. Thus, Comrade Bukharin has ascribed to me an absurdity and has undertaken 'in the sweat of his brow' to refute this absurdity. It is quite obvious that when people carry out such operations in the course of polemics it is not at all because they have a surplus of new ideas in their heads.
The sum total of Comrade Bukharin's objections consists of three elements: (i) Repeating certain general truths about 'the sloughing by social laws of their historical skin', and so on; that is, general truths which in the present case have nothing to do with the matter under discussion and which, by being placed near completely jejune objections, are intended, apparently, to lend an appearance of solidity to the latter. (A wild flower has found itself in the same bunch with a carnation!) (2) Statements of the kind just mentioned. The attentive reader, comparing the text of my book with Comrade Bukharin's critique, will see through all these statements for himself and thus leave me to occupy myself in this foreword with something more interesting than dreary detective work. (3) Declarations that when we analyse bourgeois economics we are dealing with a state superstructure which is not a 'component part of the production-relations, the study of which is the task of economic theory'; under capitalism economic processes develop spontaneously, whereas in the Soviet Union the basis merges with the superstructure in the state economy, and in the field of economic activity the planning principle is gradually beginning to crowd out spontaneity.
Strictly speaking this is Comrade Bukharin's only argument, which he repeats again and again in various forms and which we have partly dealt with above.
Let us put the following question to our critic: 'If the state, as a political organization, is merged with the organs of guidance of the state economy, do we apply the method of historical materialism when analysing the society that results, or do we not?' If Comrade Bukharin says no, this means that the sociological theory of Stammler is false only in relation to bourgeois society but is true when applied to the socialist state and its economy. In the event I also suggest to Comrade Bukharin that he compare his position with the viewpoint of Lukacs on the theory of historical materialism as a conception which has significance only for class society and which, consequently, begins to lose its significance in and for the transition period. If the theory of historical materialism is applicable also to socialist society and its economy, and the merging of political organization with economic organization necessitates only some variation in the way the method is applied, about which I have said something in my book, then Comrade Bukharin has no difference of opinion with me.
Incidentally, I wish to observe here again that the merging of the political organization of society with part of its economic organization in no way prevents us from separately analysing the distinct functions of the one and the other, distinguishing political factors from economic ones and taking economic activity as the basis. In our case we must not forget, moreover, that the economic organization of the proletariat does not at all coincide with the entire economic basis of Soviet society, in which more than half of the material values are created outside the circle of the state economy.
Comrade Bukharin avoids clearly facing the question I raise when I point out that my opponents belittle the importance of the method of historical materialism so far as our system is concerned. He reproaches me for not seeing 'the originality in the relation between the basis and the superstructure which exists under the regime of the proletarian dictatorship', but says not a word as to whether this originality provides sufficient reason for replacing Marx's sociological method with some other. Well, now—yes or no? And incidentally, does my critic propose to give the method of historical materialism the brush-off in all those cases where the state plays a bigger economic role than in the period of the domination of bourgeois Manchesterism—for example, in certain periods of the feudal history of society, in the state capitalism of the World War period, in the Jesuit commune in Paraguay, under Italian Fascism, and so on?
As regards the argument about the role of the social principle in our economy, we have already seen how little the conscious character of the state's economic policy hinders us from distinguishing at a certain stage of analysis what is dictated by the demands of expanded socialist reproduction from what is foisted upon the economic policy of the state by the resistance of private economy, quite independently of whether this resistance is taken into account beforehand or whether the state acknowledges it only after it has been prodded in the back by it. All this argumentation of Comrade Bukharin's is either inconsequentiality or slyness. My critic agrees that a conscious policy is a conditioned policy. But he does not say how the conditioning of this policy is actually to be sought and found. At the same time he tries to cast doubt on my method by referring to the ousting of the principle of spontaneity by the conscious principle, that is, he wants to scoop up a little argumentation from the sources of that very 'cheap idealism' a polemic with which he regards as a superfluous luxury. I now see that my polemic in that direction was not at all superfluous.
My position on the question of the two regulators in the Soviet economy is regarded by Comrade Bukharin as my 'fundamental and central mistake'. We have the right, therefore, to expect that his arguments on this point should be particularly close and convincing. Alas, disappointment awaits us here even more than in respect of what our critic had to offer us on the question of my method of study.
Comrade Bukharin begins by agreeing with my criticism of the naturalistic interpretation of Marx's law of value. This is not surprising if we remember that Comrade Bukharin has great merits in this sphere, as an economist and a commentator on Marx. It would seem that agreement between us on such an extremely important point ought to have eliminated forthwith a mass of misunderstandings and swept away all those objections which were put up to me by consistent or inconsistent supporters of the naturalistic conception of the law. To my amazement, Comrade Bukharin, while repudiating the position of the 'naturalists', has not resisted the temptation to use against me certain arguments taken from their arsenal, just as in the case of the 'cheap idealism', cited above.
Yes, indeed. My critic has devoted several columns of his feuilleton to setting forth the idea, death-dealing in its novelty, that it is necessary to distinguish between two aspects of the law of value: first, the law of proportionality of labour-expenditure, as a general sociological foundation, and, second, the historically-transient form in which this law manifests itself under commodity production, as the value, fetishistic form of regulation. My critic needs to make this statement in order to demonstrate the pro¬position that, in counterposing the law of value, as regulator of commodity production, to the law of primitive socialist accumulation, I am rejecting not only the historically-transient form of the law of value but also its sociological basis, that is, the law of proportional distribution of labour. In my work, it appears, 'the proletarian planning principle' is a principle of struggle not against the value aspect of the law of proportional labour-expenditure but against this law, so to speak, 'in its material essence'. I shall show below what a muddle is to be found in the 'material essence' of Bukharin's objection, and how he himself walks all round and about this material essence without ever putting forward anything positive of his own. Here I must categorically rebut the objection which has been made, because the text of my book leaves no doubt as to my true point of view on the nature of the conflict between the two laws. Knowing my opponents well and foreseeing precisely the objection which they have here put to me, I included a special reservation in my book to the effect that in counterposing the law of primitive socialist accumulation to the law of value I have in mind the historically-transient aspect of the latter, connected with commodity production, and not the law of labour-expenditure. Thus, in a note specially written with objections of Bukharin's sort in mind, I say:
Here, as in all the following exposition, I speak of the law of value as the spontaneous regulator under the commodity and commodity-capitalist system of production, that is, the historically-transient form assumed in exchange society by the regulation of the economy by labour-expenditure. I do not speak of this regulation in itself. This regulation will exist under planned society too, but will be effected in another way, that is, on the basis of direct calculation of labour-time. (The New Economics, 1st edition, p. 70)
Furthermore, the reader can read in the methodological chapter of my book:
The second thing to be rejected is, of course, the confusion between proportionality in the economy, which is objectively necessary for every system of social production with division of labour, and the historically-transient method of achieving this proportionality on the basis of the law of value. A correctly proportioned distribution of labour is needed both for capitalism and for socialism, and also for our present commodity-socialist system of economy . .. Are we to suppose, then, that the proportions we need are dictated by the law of value as regulator, and can only be found through it, since the law of value is historically and, if you like, materially and physically linked with and inseparable from commodity production, as production in which private property in the instruments of production is predominant?. .. Why can we not say that we find the necessary proportions in the main by our methods? . . . And if this is possible, if it is even 50 per cent, possible, then to say that we have basically only one regulator means crudely confusing the form of regulation on the basis of labour-expenditure under capitalism with the objective economic need for proportional distribution of labour which exists not only for commodity and commodity-capitalist economy and which can be established not only by capitalist methods.*
Comrade Bukharin had not noticed the first of these passages in my book. But later he himself quotes the second and is obliged to acknowledge that it constitutes 'a sort of counter-objection' (what modesty in this acknowledgement!). But instead of accepting my warning as meant for him and putting an end to his empty flow of words, he keeps on for eight columns of his feuilleton forcing an open door. I ask everyone familiar with Marxist political economy whether the two passages I have quoted are not sufficient for a literate economist to grasp my point of view and whether even one of them would be inadequate for the purposes of an honest polemic. Thus, when I speak of the conflict between the law of primitive socialist accumulation and the law of value I have in mind the conflict between two regulators, considering them from the standpoint of their historical form (the specific features, that is, which distinguish them one from the other, and the economic consequences of their operation in economic life), and not at all from the standpoint of the law of labour-expenditure, which forms the foundation of both of these regulators and lies at the basis of all economic regulation in general. The question whether it would be correct to speak in this con¬nexion about two regulators or about two different forms in which one and the same regulator manifests itself is an important question for supporters of the naturalistic conception of the law of value, but not for supporters of the view that the law of value is the regulator of commodity production and disappears along with it. After all, the law of proportionality of labour-expenditure can manifest itself under commodity production only as the law of value, that is, as a law whose historical form of manifestation is merged with its sociological basis, that is, with regulation on the basis of labour-expenditure. It is only because of this merging that the law of value reproduces precisely the relations of com¬modity economy, and it is only with the existence and development of these relations that it can function as regulator. Contrariwise, the disappearance and dissolution of the production-relations of commodity economy dissolve the very basis of the existence and manifestation of the law of value as regulator.
But this does not abolish the regulatory role of the law of proportionality in labour-expenditure. That law merely assumes a different form now, as people's production-relations also assume a different form. When the planning principle has fully triumphed, under communist production-relations, regulation on the basis of labour-expenditure will take the form of calculating the labour-time expended at a given level of technique on the production of goods in the different branches of the economy. The distribution of labour-power will then be carried out according to a rational plan the purpose of which will be to satisfy a certain quantity of human requirements with the least possible expenditure of power, there being a certain quantity of productive forces available for use. The position is, however, that when we counterpose to the law of value the rational, planned regulation of society, we have in mind the complete and finished antithesis of capitalism, that is, communist society.
And now the question arises: during the long transitional period from capitalism to communism, what form must be taken by the law of regulation on the basis of labour-expenditure? Will some other law prevail—a regulator based on the same general socio¬logical law of proportionality of lab our-expenditure, but now assuming a fresh form and, unlike the law of value, reproducing on an expanding scale not capitalist but socialist relations of production? Or will there be no specific law for the transitional period—will the law of value, having lost its economic basis, be replaced by a 'law of simple labour-expenditure', that is, will the removal of the specific historical features of the law of value lay bare in pure and rational form its sociological foundation?
Comrade Bukharin stands for the second point of view. In his opinion, 'it follows from Marx's analysis also, as surely as twice two is four, that the law of value cannot grow over into anything other than the law of labour-expenditure and that any other "growing-over" is glaring nonsense'.
Let us examine this problem, which is extremely important for understanding the development of the Soviet economy.
But, first of all, let us dispose of the reference to Marx, which my critic puts forward not only as testimony to his ignorance of the laws of the Soviet economy, but also in such a way as to make Marx join with him in saying ignorabimus, that is, we shall not know. In the first chapter of the second part of my book, published under the title 'Socialist and Communist Ideas about Socialism'.1 I have quoted the most important passages in writings of Marx and Engels where our teachers speak about socialist production in contrast to capitalism. It is self-evident that in making such a contrast they make one also between the law of value and regu¬lation on the basis of expenditure of labour-time, but neither were able nor wished to say anything else, for fear of becoming un¬scientific. Marx did not investigate the regularities of the transitional economy in their concrete forms; he left only a few general notes on this subject, mainly in the Critique of the Gotha Programme, and a few remarks in the drafts for the Communist Manifesto. Marx and Engels said that the law of value is super¬seded in the last analysis, but did not go into the question of the transformation of this law in the course of the transitional epoch. Their general contrasting of capitalism and communism does not directly answer this concrete question, which we raise because 1 Vestmk Kommurtisticheskoi Akademii, No. 12. we start from the experience of the actually existing Soviet transitional economy, and there is no taboo on investigating its regularities. After all, Marx and Engels nowhere spoke concretely about the struggle between the plan and the market, about the 'bond', in our sense of the word, about industrialization, or about many, many other problems which the development of the Soviet economy has thrown up. Does this mean that to raise these problems is to contradict Marxism and that it is 'glaring nonsense'?
Passing on to the essentials of the question, I must say this. The law of proportionality in labour-expenditure can prevail in its pure form only in a society where class struggle has been wholly and completely ended, where the distribution of the labour force of a non-class society is carried out as a direct task of en¬vironmental control and the struggle of man with nature is not complicated and mediated by any survivals of struggle between groups of people connected with survivals of private enterprise. It is quite obvious that in the transitional epoch the law of regu¬lation by labour-time cannot manifest itself in its classical form, because the transitional period will be full of the struggle between socialist production and commodity production or its survivals, and this means that the distribution of people and instruments of production cannot be fully rationalized and subordinated to the single task of satisfying society's requirements. Mixed up with this task is the still uncompleted task of reconstructing the social structure itself so as to put it on a non-class foundation.
What form can be assumed by the law of distribution of pro¬ductive forces on the basis of labour-expenditure in the transitional economy?
If that question envisages an economy with a mixed structure, in which the socialist sector has succeeded in developing all its inherent economic advantages over private enterprise, and is ousting the latter both automatically and steadily, as in its day the capitalist factory ousted handicraft, then I can say nothing reliable or with any scientific basis about the regularities of this period, since the object of study does not exist. We can set up only hypotheses. Perhaps the law of proportional distribution of labour will assume here the form of a law of socialist accumulation in some very much more concrete expression than can be characterized by this excessively general term.
But the situation is quite different with the Soviet system of economy at the present stage of its development.
We know the Soviet economy, it is an historical fact, and we can to some extent discern its laws of development in their specific peculiarity. This consists above all in the fact that the socialist sector of our economy has not yet developed all its advantages over capitalism but still rests upon a backward tech¬nical basis quite inadequate to the level of its social structure, which is historically more progressive than the most advanced contemporary capitalism. This sector still has to master the first steps of socialism: it has to assemble, in very difficult conditions and in a very dangerous international situation, the basic elements for production necessary to beat capitalism economically, that is, by a more rapid development of its productive forces. During this period, our state economy being as it is, the law of labour-expenditure must inevitably take the form of the law of primitive socialist accumulation, and inherent in this form is a collision and uninterrupted conflict with the law of value. From this stand¬point the law of primitive socialist accumulation is the law of overcoming our socialist backwardness, and is operative only in that period of development when our state economy has not achieved technical and economic predominance over capitalism.
That the law of primitive socialist accumulation is a regulator of economic life operating simultaneously and in conflict with the law of value (as the regulator of another system of social production) can be shown by the entire history of our industry, of the state economy in general, and of our foreign trade in particular. As I do not wish to set forth here, in this connexion, a series of con¬clusions from the second, concrete volume of my book, I will merely observe that we have every reason to regard the law of primitive socialist accumulation as the specific form in which the law of labour-expenditure manifests itself in our economy.
What underlies the distribution of productive forces under capitalism, that is to say, on the basis of the law of value?
This distribution of labour under the operation of the law of value ensures on the one hand the satisfaction (on the basis of an economy of commodity production) of a definite level of demands by the given society, and on the other hand it reproduces production-relations of the capitalist type, the regulator of which is the law of value.
The distribution of labour in our state economy also has an objective purpose—on the one hand, the satisfaction of social demands on the basis of production-relationships of the collective type, and, on the other hand, reproduction on an expanded scale of this type of production-relations. Reproduction on an expanded scale of these relations demands above all the accumulation of the material resources for this reproduction. This is a question of self-preservation for the system. It is this second task that con¬ditions a different distribution of labour from that which is formed under the free working of the law of value. As a result, the distri¬bution of labour which we have in our system of state economy cannot in any way be compared with that which would have taken shape if the system had been constructed solely for the satisfaction of the demands of workers in collective production, that is, if the cycle of transformation of the entire economy had been completed. On the other hand, it cannot be compared with the distribution which is dictated by the law of value in world economy. It is on this distinctiveness from both, this lack of correspondence, that the very existence of the law of primitive socialist accumulation as the regulator of our system of state economy, in antagonism to the law of value, depends.
Let us take a concrete example, one of an infinite number of possible examples, and show how this regulator works. In a given year our total exports include, let us say, agricultural products to the value of 400 millions, and we import machinery and raw materials for industry to this value—which, with a few adjustments for imports, at the same time, of agricultural machinery, seed, and so on, corresponds to what actually happens. Our planned imports and the nature of our place in the world division of labour are subject to the law of primitive socialist accumulation. This will at once be clear if we imagine ourselves for a moment included in the world division of labour on the basis of law of value. In that case, out of the 400 millions raised by exports, after deducting payments and purchases inside the country, the peasantry would buy the very much cheaper foreign goods, with a very much wider variety of choice, and our industry would not have either foreign exchange to purchase materials and machinery with, or the rural market for its own products. When we import, say, for 100 millions' worth of peasant exports, 100 millions' worth of machinery, the domestic production of which would cost 200 millions, we are accumulating basic capital for the state economy, on the basis of the law of primitive socialist accumulation, partly at the expense of petty production. If we import raw material, the additional production of which at home would cost twice as much, or which is not produced at all in our country, we replace a part of our circulating capital, simply through the working of this same law. This law, to conclude, by obliging us to secure our internal market for ourselves on the basis of struggle against the law of value, enables us to depreciate old basic capital, now technically obsolete, and to replace it gradually with technically better capital; that is, we are enabled to give our economy a new technical basis, or, in other words, to advance along the road towards overcoming our economic weakness as compared with capitalism.
If we consider the distribution of labour in the state economy in all other spheres, and also to some degree the distribution of labour between state and private economy, then we see the follow¬ing all along the line: the law of proportionality of labour-expenditure operates in our country too, but the existence of collective production in the sector of state economy obliges it to reproduce collective production-relations on an expanded scale, as a result of which the form in which it appears is the law of primitive socialist accumulation. Through the operation of this law the state economy today supports and develops enterprises which under the operation of the law of value would be closed down. Through the operation of this law we have proportions in exchange with private economy which could not exist if the law of value operated (given the higher capitalist technique). All this taken together is a result of our economic backwardness as com¬pared with capitalism, and of our socialist isolation. The law which concentrates in itself all the tendencies towards overcoming this backwardness is the law of primitive socialist accumulation. Under its regulation we distribute our productive forces otherwise than would be the case under capitalism—Comrade Bukharin cannot but recognize the correctness of this statement. But he does not agree that this difference results from the law which I have formulated.
From what other law, then? Comrade Bukharin has an answer to this. There is no such thing as your law of primitive socialist accumulation, there is only a regeneration, a replacement of the law of value by the planning principle. In other words, whereas I answered a quite concrete question, arising from facts which call out to be generalized, by formulating a quite concrete law which explains the basic facts of our economy, Comrade Bukharin talks his way out of the problem with a general phrase about the growing-over of the law of value into the law of labour-expenditure. But this process of growing-over will go on, after all, for decades and in every country which makes the transition to the socialist organization of production, from the agrarian ones to the most highly industrialized ones. And, O my most respected critic, your audience expects you to answer this question otherwise than with a general phrase, for it knew that answer already before reading your feuilletons. It wants a concrete answer to a concrete question: are the basic tendencies of development of the state economy in our Soviet economy, in the first decade of its existence, concentrated in a specific law, or are they not? If they are not, what other conception do you propose?
Comrade Bukharin senses the pressure of this silent question from the more qualified section of his audience, and he cannot dodge it without jeopardising his reputation as a theoretician. But his attempts to squeeze out a concrete answer bring him to utter bankruptcy. While the first part of his second feuilleton was devoted to setting forth long-known truths about the law of value, the second is given over to this process of squeezing and twisting around the answer to the question.
My opponent cannot avoid the question why one and the same regulator, that is, the law of proportional distribution of labour, should give such very different results under different socioeconomic formations. He writes in No. 153 of Pravda:
We ask ourselves, however: how is it possible that a regulator which is identical in its material essence should produce very varying phenomena in the field of economic relations? Do we in fact have, in different social structures, identical proportions between the different branches of production? Is the dynamic of these proportions and relations the same? Finally, what is the meaning of the enormous difference in the rate of development? Take the development of feudal society and the frenzied race run by capitalism. Or compare the rate of development of the primitive commune with the tempo of development under socialism. How is all this related to the essentially identical regulator, the law of labour-expenditure?
It appears that such questions as these vaguely hover before Comrade Preobrazhensky, too. He wants our development to be faster than under capitalism. This is a perfectly legitimate 'desire'. And since we need, it seems to Comrade Preobrazhensky, a more rapid rate of industrialization than before, a more rapid rate of accumulation, so obviously we need another law.
These questions 'vaguely hover before Comrade Preobrazhensky', engendering a 'legitimate desire' for 'more rapid industrialization'.
As to which questions hover vaguely and before whom, while others do not even hover, we shall see from our analysis of Comrade Bukharin's critique. And as regards his patronizing pat on the back about the legitimacy of our desire for more rapid industrialization, my critic's polemical method is useless, because it does not follow in any way from the material content of the fact that both of us have been brought before the court of public opinion to answer the question about the laws of development of the Soviet economy.
To the question raised above Comrade Bukharin answers: the mechanism of regulation decides the problem. And for proof he puts forward, amongst other things, the idea that the law of value itself, while remaining the form of expression of one and the same regulator, that is, the law of labour-expenditure, undergoes changes with the transition from simple commodity production to capitalist production. And that is why 'it is absurd to say that under capitalism there are two laws: the law of value and the law of prices of production; it is absurd to say that the one law contradicts the other: for the law of prices of production is the mechanism through which the law of value operates.' (Pravda, No. 148.)
In the first place, as a general rule, an analogy is not a proof. And here we have not even a real analogy, because it is impossible from the comparison of two different mechanisms regulating one and the same economic system to draw conclusions about the regulators of two different systems (or the mechanisms of regulation of two different systems, if Comrade Bukharin prefers that terminology). For both simple commodity production and com¬modity-capitalist production, while they have differences of form, belong to one and the same family in economic structure, that is, to   commodity   production,   whereas   the   commodity-socialist
 system and pure commodity production belong to two different types of economic structure.
But the attempt to compare the mechanism of two different economic systems in order to explain different results in the sphere of the distribution of labour reveals, first, that it is im¬possible to divorce the mechanism of regulation from the economic structure in which it appears. We need only try to imagine the law of value as regulator of socialist production, or the planning principle as regulator of commodity production, to see that we cannot separate the regulatory mechanism from the whole structure of the given economy. At the same time it becomes clear that differences in the distribution of labour are determined by the fact that the satisfaction of social demands is subordinated to the conditions of existence of the given system, so that a distri¬bution of productive forces is required which, in addition to the task, common to all economic structures, of satisfying these demands, will reproduce the given system in all its historical dis¬tinctiveness. A capitalist enterprise cannot exist, as a rule, however socially necessary it may be, without making profit. And this is quite regular from the standpoint of capitalist reproduction, because in the absence of average profit the possibility of pro¬ducing for the sake of surplus value is not renewed, and as a result private property in the instruments of production becomes pointless. The capitalists do not introduce a machine which, though it economizes the labour of the workers, yet does not increase profit, even though from the standpoint of production for demand this situation is quite irrational. In our state economy we have a distribution of labour which could not be maintained if the law of value were operating, nor if the law of labour-expenditure were operating in its pure form, that is, if production for demand prevailed. This is because the existing distribution of labour has also to meet the task of reproducing the given system (that of collective state economy) on an expanded scale, in spite of the fact that, technically and economically, the state economy is as yet weaker than capitalism, and expanded reproduction of relations of a certain type, which are linked with a backward level of technique is quite irrational from the standpoint of the world law of value and can take place only on the basis of struggle against this law.
In the second place, to reduce the entire problem of the conflict of two different regulators, linked with different systems of social reproduction, and the entire difference in the material consequences of regulation, to the difference between mechanisms of regulation in the narrow sense, that is, in particular, to counter-pose to the law of value an increase in the role of planning calculation as a method of accomplishing the tasks which face the state economy, is to substitute one aspect of the problem for the problem in its entirety. We carry out non-equivalent exchanges with the countryside, we hold to a strict import plan, with the purpose of reproducing the given system, and we do much else, because of the relations which exist between our system and the world market and the whole of private economy in general, but not because of the growth of the planning principle. Without all these measures we should be shipwrecked as a system, quite regardless of whether we carried out in a planned or an unplanned way the policy bringing us to shipwreck, that is, a policy con¬trary to that dictated to us by the law of primitive socialist accumulation.
Comrade Bukharin's attempt to answer the concrete question about the laws of development of the state economy with a general phrase about 'the law of value growing over into the law of labour-expenditure' shows quite plainly that he is absolutely unable to answer. He himself admits that he has restricted himself to 'very general notions' and promises to speak more concretely on some future occasion. We are waiting for that day. After all that we have heard from my critic, however, I remain very much a sceptic as regards the theoretical value of these 'blessings yet to come' which Bukharin promises us.
Comrade Bukharin's idea that even socialist accumulation cannot be counterposed to the law of value (to say nothing, he implies, of a law of primitive socialist accumulation), because our economy is growing 'on the basis of market relations', constitutes a glaring theoretical error on which a real programme of theoretical and practical opportunism could be erected. After all, if our state economy is growing in conditions of the existence of market relations and is not being dissolved in commodity economy, this is only due to a desperate struggle for its survival. We are able to 'accumulate', selling our products twice as dear as abroad, only because we have set up a barrier between our territory and the world market which we defend by force, relying on the defensive capacity of our system as a whole. We fight for survival within the framework of market relations, but we change their content on the basis of the struggle. Not to see the absolutely except¬ional conditions of our existence, to represent the struggle which is being waged in different forms against private economy, including the form of forced collaboration with capitalism, as being a peaceful way of life1, means gossiping on the surface of phenomena and substituting philistinism for revolutionary Marxism in the field of scientific investigation.
In order to finish with this subject, I quote from Comrade Bukharin's second feuilleton a passage which shows the careless¬ness with which he has written his whole refutation of my book and that he has not managed to read to the end of what was written at the beginning of it. Here is the passage: 'The process of growing-over of the law of value into the law of labour-expenditure is expressed in the fact that, in the procedure of the plan, "prices" in their semi-fictitious function (that is, no longer determined from the standpoint of the "barometric fluctuations of the market") are formed quite differently from how they would be formed spontaneously.'2
One asks, what spontaneous regulation is meant here? If he means spontaneous regulation on the basis of the law of value and in conditions of restored capitalist relations, Comrade Bukharin has already recognized, earlier on, that in such a case the proportions of the distribution of labour would be different from what they are in our present state economy. If he only means that one can theoretically imagine spontaneous regulation under conditions of the existence of state economy, then the conclusion to be drawn from that proposition unravels everything that Comrade Bukharin has managed to weave around the fundamental question. If the distribution of labour would be the same under spontaneous regulation as under conscious regulation, this only shows that the nature of the regulatory mechanism in itself is irrelevant and that no growing-over of the law of value into the law of labour-expenditure can by itself explain the specific features of the distribution of productive forces in our country as compared with capitalism.
The reader will observe that this is not the first contradiction in Bukharin's critique. And this contradiction has one and the same origin as the contradiction we have already pointed out. This is the lot of all those who, not having a well-thought-out conception of their own, hope nevertheless to cook one up in the course of their polemical expedition. Driven, however, by the requirements of the polemic, my opponent's critical bark has been obliged to take on board all sorts of arguments of a con-junctural type, including some which contradict each other, as a result of which the boatman doesn't know himself at the start of the expedition with what cargo and at what shore he will arrive in the end.
Comrade Bukharin, following closely the current fashion, has given his third feuilleton, devoted to a more detailed criticism of the law of primitive socialist accumulation, the title: 'The law of primitive socialist accumulation, or why ought we not to replace Lenin by Preobrazhensky?'
I myself earnestly recommend the reader not to replace Lenin by Preobrazhensky; but I should not advise him, either, to replace Lenin by the Bukharin of today, or by any of those who cover their mistakes with Lenin's great name. As a very graphic example of how Comrade Bukharin utilizes the heritage of Lenin in his own interest, we can quote his publication of one of the many notes made by Lenin in the margins of Comrade Bukharin's book The Economics of the Transition Period. Lenin did not like the term 'primitive socialist accumulation', which he called 'extremely unfortunate', 'a child's bauble', 'copying terms used by the grown-ups'. In Comrade Bukharin's opinion, 'this stern judgement by the leader of the proletariat and great theoretician annihilates Comrade Preobrazhensky*.
May the 'annihilated' Preobrazhensky be permitted to observe the following? The expression under debate was used in Bukharin's book which was written in the period of War Communism and attempted a theoretical interpretation of the economics of that particular period.
The economics of War Communism were those of a state economy of the war-consumption type, when we were not ac¬cumulating but were forced to spend our resources, as economically as possible, when production was not reproduction but a means of transforming raw material and basic capital into objects of consumption and means of defence. In relation to economics of this kind Comrade Lenin considered the expression quite mis¬placed, and he was right. But I use this expression—or a parallel expression, 'preliminary socialist accumulation'—in relation to our economics of another period and a different nature, when accumulation is taking place and constitutes the central problem of our economic policy. Consequently, Lenin's note applies not to me but to Bukharin, who used this expression of Comrade Smirnov's, in Lenin's view, 'unfortunately', childishly. How has Comrade Bukharin's mistake been suddenly transformed into a mistake by Preobrazhensky, and how comes it that Lenin's note annihilates not the 'cause of rejoicing' but the author of a book which Lenin could not read and notes on which he did not make?
A second question. Why did Comrade Bukharin keep Lenin's note hidden for six years and bring it to light only for the purposes of polemic, and then so clumsily that Vladimir Ilyich's birch-twig is obviously applicable to Bukharin's back and not to mine? And further, why does Comrade Bukharin not publish all the notes made by Lenin on Economics of the Transition Period} I have read them and found them to be of great interest to the public at large. Why, finally, does he not tell the public what Lenin thought of Bukharin's book on historical materialism? To know Lenin's opinion of books which have been given the status of textbooks would be very useful both for teachers and for pupils.
Let us pass now to Bukharin's criticism of the law of primitive socialist accumulation. As usual, he begins with familiar quotations from Marx, in part quoted by me too, but does not say clearly just what they are supposed to show. It is characteristic, however, that, in setting forth Marx's conception of the law of primitive capitalist accumulation, Comrade Bukharin has omitted a quotation which is of very great importance in clarifying the question under review. In this passage the author of Capital speaks of the fact that primitive capitalist accumulation means, not only the separation of the producers from the means of production (that is, the formation of a class of wage-labourers), but also the accumulation in the hands of particular capitalists of sufficient means to set going larger enterprises than those of the handicraft  type. (Capital, Vol. I, part I, p. 640, Stepanov's translation. [English translation, Allen and Unwin, p. 638.])  Comrade  Bukharin  omitted  this  important passage not accidentally but because it very strongly underlines the appropriateness of my analogy.
Comrade Bukharin has twice asked me to what period I apply the law of primitive socialist accumulation: in his opinion, from the way I define the law one could conclude that it must operate under fully-achieved socialism. It is quite clear from the text of my book that the law relates to the period when the socialist sector has not yet won technical and economic superiority over capitalism, and by no means right up to the moment when the last handicraftsman or the last small rural producer has disappeared. Bukharin finds that, even so, 'the process is drawn out over a very long period*. On this I will observe that the period of operation of the law, that is, the period in which our state economy is still at the stage of fighting for a fresh technical basis and the possibility of developing its advantages over capitalism, depends, first, on the international situation, since a socialist revolution in the West could reduce this period to the minimum (just as an onslaught by world capitalism would break off this process, liquidating our entire system); secondly, it depends to a certain extent also on the character of our own economic policy, that is, on our greater or less consistency in the matter of carrying out the industrialization of the country.
Comrade Bukharin evidently regards as his weightiest argument against me his statement about the methodological impossibility of determining the optimum for the development of state economy. He keeps coming back to this point and he exercises his wit most frequently in relation to this. All Comrade Bukharin's objections on this point, as we shall now see, are wholly and completely based on unwillingness to understand my point of view.
Here is the essence of these objections:
It is impossible to determine the optimum for the development of state economy without analysing private economy. This law [i.e. the law of primitive socialist accumulation, E.P.], even if it existed and were correctly formulated, is a law of the interrelation between state economy and private economy. . . . But a law of interrelationship presumes both sides of this interrelationship. ... If we undertake the task of investigating the transitional economy in its historical distinctiveness, then we must necessarily take as our maximum abstraction, two-class society, that is, the combination of proletarian state industry and peasant economy. From foreign trade (however important it may be empirically) we can and in the first stages of analysis even must abstract ourselves, but to abstract ourselves from 'third parties' in analysing the transitional period is inadmissible; it means throwing out all specific theoretical problems. . . . Comrade Preobrazhensky sees the contradictions but does not see the unity of the national economy, he sees the struggle but he does not see the collaboration. (Pravda, No. 153.)
First, the law of primitive socialist accumulation as I formulate it is indeed the law of the relation of state economy to private economy (including world economy) in the given period of the development of this economy, and thereby also the law of the specific distribution of the productive forces within the state economy. It is quite absurd to reproach my idea with ignoring the second member of the interrelationship, because without this member the law itself could not exist. Comrade Bukharin falls into a wretched contradiction with himself when, on the one hand, he finds that I talk too much about alienation of surplus product from private economy and, on the other hand, that I have forgotten the second member. The second law of our economy, the law of value, about which not less is said than about the law of socialist primary accumulation, is a law based on the second member of the interrelationship, that is, on private economy within and without the U.S.S.R. After all, I do talk about the analysis of tendencies in their pure form not only in state economy but also in private economy.
Of course, definition of the optimum tendencies of state and private economy cannot be accomplished completely without concrete analysis of both, but concrete investigation is a task for a further exposition. In the first part of my work I could lay down only the general methodological lines of an approach to this analysis. Such a general approach very greatly facilitates concrete analysis. In particular, it is only thanks to this approach that I have given an explanation of the goods famine, as the result of a change in the structure of the post-revolutionary peasant budget (See my article 'Economic Notes', in Pravda, 15 December 1925.)—an explanation which is now generally accepted. Yet this is only a small excerpt from the part of my work which is to be published as Volume II of The New Economics. If Comrade Bukharin finds that I have too little to say about private economy, this is an objection to the arrangement of the material in my book, not an objection of principle to my method of investigation.
I have already said above that it is not only possible but also necessary to make abstraction from the conjunctural hindrances which arise from private economy and obstruct the optimum development of state economy, just as when analysing the ten¬dencies of development of private economy it is necessary at a certain stage of investigation to make abstraction from those concrete and conjunctural hindrances which obstruct the develop¬ment of private economy in its striving to overturn the whole Soviet system. Only after this can one understand the resultant economic policy of the state. It is ridiculous to think, or to attribute the thought to me, that I recommend making abstraction in the first case from the fact that private economy exists (and not only internally), or in the second case from the fact that state economy exists. When Marx, at a certain stage of his exposition of the law of value, makes abstraction from the influence of supply and demand on prices, assuming equilibrium between them, or when in the first volume of Capital he does not begin to examine the law of prices of production, only vulgar econo¬mists could reproach him with making abstraction from the existence of separate private producers, from the market, and from the foundations of commodity-capitalist production generally.
Comrade Bukharin says that, if my method be followed, no industrial plan could ever be drawn up, because it would mean leaving out of account the size of the peasant market, the harvest, and many other things. This argument of Comrade Bukharin's shows clearly that he does not wish to understand what he is criticising. Every specific industrial plan is a programme of economic activity in which the resistance of private economy has already been taken into account, within the limits of the foreseeable. But in order to take this resistance into account one has first of all to know what is the optimum of industrial development. Before retreating one must know from what position one is retreating. In general, to analyse the economy, its trends of development and its regularities, and to explain the phenomena of economic life over a definite period of time does not suffice as a recipe for compiling, let us say, an economic plan for a particular year. But it can be of great assistance in fulfilling this practical task. If we compile, for example, the economic plan for the ensuing year at mid-year, that is, when we do not yet know the size of the pros¬pective harvest and many other necessary figures, we rely on average figures and prepare two variants, based one on an average harvest and the other on a bad one. There are a number of other variable magnitudes, too, which cannot be calculated in advance. But, against that, knowing the trends of development of the state economy, one can calculate what its production would be under conditions of the most favourable inter-relations between state economy and private. Similarly, knowledge of the direction which private economy would take spontaneously on the basis of its inner tendencies enables us to foresee the important points of resistance on the part of private economy. In the last analysis it is not possible to counterpose in principle the algebra of the economic analysis of the basic trends of the two sectors of our economy to the arithmetic of the concrete figures of a particular plan or the figures of a particular economic year after it has been completed. But Comrade Bukharin's argument, even if we clear away from it the elements of misunderstanding or wilful refusal to understand, still essentially wavers to and fro within this contraposition.
Thus, Bukharin's statement that I propose to make abstraction from private economy, including peasant economy in general, is absolutely untrue. All that is involved is abstraction at a certain stage of the investigation from the conjunctural resistance of private economy; in other words it is a matter of analysing the basic tendencies and not of working on the concrete economic situation, not of studying any particular economic year. Nor can I accept Bukharin's proposal for making abstraction from foreign trade. This is not just because making abstraction from it in a specific investigation means making abstraction from the textile, rubber, woollen, and leather industries, which to a considerable extent work on foreign raw material, and from the problem of replacing the basic capital of industry through the importing of equipment. (I must mention to my critic that, if he reminds me about the role of the harvest in the compiling of the industrial plan, then from his own standpoint to make this abstraction is impossible, because without an export and import plan it is also not possible to draw up an industrial plan. However, I do not wish to become involved in his confusion, (The confusion consists in Comrade Bukharin's mixing up the method of compiling a specific economic plan with the method of studying the bases of a particular economic system. This leads to confusing structural contradictions and their dynamic with clashes of the conjunctural type) and I reject his proposal on other grounds.) Making abstraction from the external market means making abstraction from our reciprocal relations with world economy, it means making abstraction from our quite exceptional value-relations with it, from non-equivalent exchange, from the monopoly of foreign trade, from our almost prohibitive customs duties, the constraints on which all our industrial development literally depends in the period of prelimin¬ary socialist accumulation. This would also mean making abstraction from the basic conditions of our existence, which I myself do not do, in spite of the accusations made against me, and which I do not recommend other researchers to do.
My critic further reproaches me with talking only about the struggle between the two sectors of the economy and ignoring their collaboration and the unity of our entire economic system. This is a very important point in my disagreement with Comrade Bukharin and his rather numerous co-thinkers. I relate to this Comrade Bukharin's statement, already partly examined, that it is wrong to counterpose socialist accumulation to the law of value.
Let us begin with this last point. Underlying Bukharin's state¬ment is the elementary fact that our industry, realizing its products under the conditions of market exchange and receiving the bulk of its raw material also from the market, is in a position, with the given level of prices, to accumulate. That is fine. But underlying this elementary fact is another one, also elementary, and much more alarming for us, namely that the current prices of our products are on the average twice as high as the prices of the same goods abroad. We accumulate with these prices only because we struggle against the world law of value, by forcibly tying our internal market to our technically backward industry while selling the exported products of peasant economy at the prices prevailing on the world market, and by subordinating our import programme to the task of accumulating basic capital and replenishing stocks of circulating capital. It follows that we accumulate not on the basis of or parallel with the operation of the law of value, but on the basis of a desperate struggle against it, which in the social field means a growth in class contradictions with the exporting groups in the countryside, that is, mainly with its well-to-do strata. This contradiction will increase as industry lags behind agriculture, and will be smoothed out only to the extent that we successfully carry out the technical re-equipment of our industry and transport. Not to see behind our miserable domestic commodity-exchange the huge and threatening shadow of the world market; not to see the thinness of the wall which separates this from the hundred-million-headed mass of our peasant population; not to see the tenseness of the whole situation and the ceaseless struggle of one system against another, is in practice to lull the vigilance of one of the contending sides, that is, the working class, to keep it in the dark about the dangers which threaten it, and to weaken its will with Potemkin villages of childish optimism in this period when it needs to continue to wage the heroic struggle of October—only now against the whole of world economy, on the economic front, under the slogan of industrial¬izing the country. But all this also indicates—may I be forgiven the bitter truth of my words—such philistine thinking, such theoretical stupidity that, when I read the lines in Bukharin's feuilleton about the harmony between the law of value and socialist accumulation I involuntarily thought: 'Doesn't Comrade Bukharin keep, alongside his current official writings, a special diary for posterity, and in particular, hasn't he written in it about this "idea" he has just put forward: "All this is, of course, rubbish, but it was required for conjunctural reasons"?'
In our economy there is, of course, a certain unity, a certain co-operation between the two sectors. But neither this unity nor this co-operation can be understood correctly if one does not take as the axis of one's study the struggle of the socialist sector against private economy, especially on the world scale, especially with the capitalist and kulak cadres of this economy inside the country, and- with the cadres which are developing into kulaks. If we take only our internal relations with private economy then, naturally, we have here both struggle and collaboration, especially if we draw a distinction between private capital and kulak economy on the one hand and the poor and middle peasants on the other. But, first, even our collaboration with the poor and middle peasantry is only a special form of struggle for the socialization of agriculture. On this there is a sufficiently clear formulation in the agrarian part of our programme. And, secondly, we must not forget the forced character of our co-operation with private economy. There is co-operation in prison, too. Are we not in a sort of concen¬tration camp along with the capitalist elements of our economy? We are at one and the same time warders and prisoners. We are prisoners because we are separated by the prison-wall of time from the world socialist revolution, towards which the socialist sector of our economy yearns with every fibre of its being. We are warders because by the wall of our monopoly of foreign trade, our tariff system, our planned imports and the resulting forced internal price-level we have separated our private economy from world private economy, towards which it strains, especially the capitalist forms of it. True, the middle peasantry is neutral in this struggle, with certain exceptions, but that means that it is not so much an active participant in the struggle as the arena of the struggle between the two hostile systems. We do not even speak of the fact that the orientation of part of the middle peasantry towards the side of the kulak type of economy means its struggle against socialism, while middle-peasant co-operation is only one of the forms of the struggle of socialism against private economy in general.
Just a couple of words more on my frightful felony, about which Comrade Bukharin has screamed so loudly that I was frightened myself until I realized what the fuss was all about. It turns out that my offence consists in my not warning the public that I had changed three lines in the second chapter of my work when I prepared it for publication as a complete book. Generally speaking, an author can improve his work whenever possible and is not obliged to inform his readers of every change he makes. It would be wrong if, in replying to a polemic based on the original text of his work, the author were to refer without warning to a corrected text. But in the present instance nothing of that kind has occurred. In the passage of my work which has been mentioned I did the following. For the small size of the peasant market as an example of an obstacle to accumulation I substituted the need to reduce prices as a task on our programme, because putting it this way underlines our link with world economy. The gap between our prices and world prices is so great that a whole period of primitive socialist accumulation will be devoted to bringing them into line by way of the technical re-equipment of our industry;
to this bringing into line we shall be forced, in some years mainly by the insufficient size of the peasant market, and during the whole period by the general relationship of our prices with world prices. If Comrade Bukharin likes comparing my texts and thinks this a very useful activity, I recommend him to compare the text of the second edition with the first. There are changes here too, but I regard it as superfluous to list them.
Practice is the highest court of appeal for deciding the truth or falsity of a particular theory or a particular theoretical argument. The central practical theme of the present book is the problem of accumulation in state economy. The farsightedness of my opponents is best expressed in the fact that they regard the mere posing of this problem as an attempt upon the worker-peasant bloc. Yet the State Planning Commission, drawing up its economic programmes independently of our disputes, on the basis of objective facts (which, by the way, were influenced also by our concrete economic policy during the last few years), has proposed an increase in industrial production during 1926-7 by 13 per cent, and during 1927-8 by a considerably smaller amount. And this in a situation of increasing agrarian over-population and increasing goods famine, which in 1925-6 amounted to a 380-millions deficit in goods and in 1926-7 is expected to amount to 500 millions. The obstacle to a more rapid growth of industry is not lack of labour power, not lack of effective demand, but above all insufficient basic and circulating capital, including insufficient import potential.
These figures of industrial under-production, established by the State Planning Commission, have a certain relation to the results of our dispute—as a monstrous bad mark which history has awarded to the theoretical sagacity of my opponents.

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