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Title: State Capitalism in Russia Author: Murray Bookchin Date: Autumn 1950 Language: en Source: Retrieved on 2016-10-28 from http://marxists.architexturez.net/archive/bookchin/1950/state-capitalism.htm Notes: Published: Contemporary Issues 7, Autumn 1950 (under pseudonym M. S. Shiloh) Digitalisation: Adam Buick HTML: Jonas Holmgren
The problems of the social system in Russia have often been compared
with those created by revolutionary France more than a century and a
half ago. An understanding of both, it is said, requires perspective.
Historians are reminded that the years have dissolved the acrimony
heaped on the events of the Great French Revolution — that more 'good'
than 'harm' was done. Much the same is implied for Russia. Supporters,
even mild critics, of the Stalin regime tell us that so 'new' a
phenomenon requires the test of many generations, that the judgement
nourished by immediate events, by 'passing' abuses, must be suspended
until lasting outlines appear. In place of the years and of abuses
engendered by 'expediency', a vast theoretical corpus has been brought
to the support of the Russian social system. We are invited to equate
the nationalization of industry to progress; economic planning to the
elimination of crises; mounting indices in steel, coal and petroleum
production to the well-being of the Russian people. In the meantime,
fact progressively contravenes theory. The nationalization of Russian
industry has not been marked by any sort of social progress. Russian
economic planning — such as it is — has sharpened crises known to the
capitalist world. And the mounting indices in heavy industry (little as
we are actually permitted to know about them) have been accompanied by
abject misery and worsening of conditions for the Russian people. To
anyone informed of Russian social life, the contradiction between theory
and reality has reached nightmarish proportions.
Moreover, just as theory has been used to distort the meaning of events,
so events have revenged themselves on theory. The most vulgar prattling
has been employed to override Russian reality from one aspect or
another, and with it, the means for social analysis itself. One has only
to examine the tortured ideas of Stalinism and its supporters on
economic theory, aesthetics, and, often enough, even science, to judge
the wholesale misapplication of thinking to all questions. The shoe is
invariably placed on the wrong foot and the adherent is invited to limp
through a host of broad economic, political, and cultural, as well as
specifically Russian, problems. It becomes a social responsibility in
every sense of the term to bring fact and theory into accord.
Although objective and systematic accounts have been available for some
time, there has been a marked failure to employ them adequately for the
purposes of generalization. By contrast, Stalinist theory was given the
semblance of a certain unity and comprehensiveness. The rather popular
notion that Russia is a 'managerial society' is unsatisfactory and
starts from the same premises as the Stalinist approach. Both assume
that Russia represents a historically-new social formation. The
'managerial theory', it is true, poses a significant issue: if the state
exercises full control over the economy, it is necessary to ask — 'Who
controls the state?' To this question, Stalinist apologists have no
reply; unless we are to give serious credence to the benign 'intentions'
of the Russian leaders or to the claim that Russia has the most
democratic constitution in the world. On the other hand, the 'managerial
theory' explains little of the energizing forces of the Russian economy:
of its dynamics and of Russian expansion abroad. From so purely negative
a definition, developed in reaction to the incredibility of the
Stalinist view rather than from a positive elucidation of the conditions
of Russian material life, it would be difficult to find serious points
of difference between a 'managerial society' and, for example, Ptolemaic
Egypt. The position fails to bring anything into relief — it lacks an
explanation of anything that is socially distinctive.
But if Russian society is not to be regarded as a 'new' historical
stage, what does it represent?
The contention made here is that Russia is integrally tied to capitalist
development, that its social system may be called state capitalism. Such
a judgement follows from two considerations. The first and most general
is the entire process of world capitalist development. The barbarization
of society, so graphically represented by Fascism and its Stalinist
predecessor, is anchored in the bourgeois mode of production. It
requires absolutely no departure from an analysis of capitalist
retrogression to explain all the phenomena of Stalinism. In point of
fact, Russia reflects this decline in every feature. The second and more
specific consideration is the backwardness of Russia. This
historically-retarded development, suffice to say for the present,
cannot be regarded as a bag of excuses for justifying 'contemporary
excesses' or, what amounts to the same thing, for keeping Russian
society in suspended animation — free from the compulsion of social law.
The 'intentions' or wishes of the Stalin leadership — whatever they may
be — may be disregarded. Under capitalism, backwardness has its own
laws, by which Russia, like Germany, Italy and Spain (each in a certain
sense) are relentlessly governed.
A discussion of Russia as a state capitalist system, therefore, presents
the challenge of large issues. At every point, the analysis lends itself
to homologous developments in England, America — indeed, in the entirety
of capitalist society. Concretely, there is almost no special starting
place. Developments in western Europe, among the 'democracies', suggest
the same problems that in Russia have achieved only greater poignancy.
Russia to-day has a nationalized and, allegedly, planned economy. This
has, by common consent, been regarded as the unique characteristic of
Stalinist society; at once its point of departure from capitalism and
its most 'progressive' feature. Planning is, at most, a claim and may,
for the moment, be put aside. The nationalization of industry, however,
remains indisputable. The question at issue is: why is industrial
nationalization, per se, non-capitalist or progressive?
It is true that nationalization, at least juridically, precludes the
individual ownership of industrial enterprises. And such individual
ownership has been associated with capitalism and its consequences —
more generally, with private property in the means of production. But
many civilizations have been known where state ownership of the
productive forces, for one reason or another, became the dominant
economic institution without in any conceivable sense eliminating
problems engendered by individual property. Private property remained in
the real sense that the control of the productive forces yielded the
relatively autonomous decisions that characterize individual ownership.
The point to be made is that the apparent economic relationship of men
to the productive forces must be explained by the economic relationship
between men. At all times, of course, a certain technological level is
presupposed. Hunters, for example, cannot be expected to establish
feudal social relations. But to borrow again from the fruitful analogy
of the ancient world, the feudal social relations of Egypt dominated the
transitions from the centralized, state-owned lands of the Old Kingdom,
through the somewhat atomized Middle Kingdom, into the Empire and
completely centralized economy of the Hellenistic Age. Throughout, the
relationship between the broad mass of serfs and the ruling nobility and
priesthood remained same. Although these changes met many real needs,
feudal problems and relations persisted and dominated Egyptian society.
The point behind this analogy can be verified in the history of Russian
capitalist development.
If European capitalism of the eighteenth and nineteenth centuries had
room for development, Russian capitalism, due to its belated appearance,
could find little sustenance in a precarious world market overcrowded by
superior rivals, and in an internal market inhibited by feudal
relations. True, Russian capitalism did not recapitulate the industrial
and political history of Europe. From the start, it was in possession of
a technically-advanced and highly concentrated plant. But from the
nature of the situation, this contained as many disadvantages as
advantages. Alongside the peasant, hungering for land of his own, was
added the ferment of the new labouring classes, to which the insecure,
restricted bourgeoisie was incapable of granting reforms. Fearing its
own masses, confined by world imperialism which clung desperately (as
the general situation worsened) to privileges acquired in an earlier
period, incapable as a result of its weakness of effectively forcing its
way into the perpetual race for markets, the Russian bourgeoisie was
compelled to cement many of its ties with the Czarist regime. More often
than not, this was a source of extreme frustration. The regime and
nobility had its own fish to fry, and the relationship often presented
the character of two dogs sharing a bone. But if the bourgeoisie
generally strives to secure itself by concentration and monopolistic
practices, the narrow margin of industrial survival imperatively
dictated the formation of great combines in Russia that increasingly
paralleled and merged with the state. The two acted upon each other: as
conditions worsened in the respective sphere of each, an
interpenetration tended to occur.[1]
These were the tendencies of pre-revolutionary capitalist development.
They must not be mistaken for a fait accompli. Quarrels, differences as
to ways and means, eternal exasperation with the inefficiency of Czarism
precipitated bitter and often violent controversies. Lurking behind
these differences lay the prospect of an internal market, free from
feudal restrictions. But lurking behind this market was the fear of a
Jacquerie and an urban uprising which variously — but, on the whole,
negatively — coloured the political activity of Russian capitalism.
The focus of all Russian political activity, of course, was the
countryside. Could the bourgeoisie 'imitate' its French brethren and
give the land to the peasants? In point of fact, the French bourgeoisie
had not liquidated the land problem. The breakdown of the feudal estates
was consummated by the Jacobins at the cost of bloody conflicts with the
capitalist class. Under the leadership of Robespierre, Danton and
Hébert, the revolution had over-extended itself, gaining an
indispensable margin for the play of radical social forces. In so doing,
it managed to override the fears, rural interests and narrow
conservatism of the bourgeoisie. But afterward the revolution
retrenched, retreating to the only forms possible at the time.
This, it might be supposed, could also provide a model for the Russian
Revolution. The parties of the Russian 'sans-culottes' would endeavour
to establish a radical democracy, largely over and against the
reactionary summits of Russian capitalism. Land would be distributed
among the peasants and improved working conditions introduced in
industry. The bourgeoisie, no doubt, would fume and storm. It might
endeavour to raise another Lyons and the nobility, certainly, another
Vendée. But the economic axis of such a revolution could only be the
full extension of capitalist relations to the countryside. Its most
obvious result: the creation of a firm peasantry at the expense of the
feudal elements.
Certain sharp differences, however, are evident. The French Revolution
occurred in 1789: the Russian Revolution, in 1917. The two were
separated by a century and a quarter of capitalist development. The
French Revolution coincided with the first upswing of the development;
the Russian Revolution with its decline and retrogression. Both aspects
of the cycle were planted in these events. In consequence, the Russian
Revolution might give an initial — perhaps not inconsiderable — impetus
to industrial activity. At worst, conditions would portend the
tug-of-war and instability following the overthrow of the Spanish
monarchy in 1931. But under bourgeois conditions, instability in Russia
was inevitable. The whole character of world economic conditions
nurtured the persistence and eventual growth of conditions that were
already clearly in focus during the last years of Czarism. In effect,
this meant increasing monopolization, state intervention to support
sagging industries and, finally, the nationalization of industry and
totalitarian policing of the standard of living.
This is essentially the gamut of Russian events after 1917. The
conditions of the war precipitated a long standing crisis, pushing the
feudal system into the abyss. They served to arouse hopes in the Lenin
group that the inevitable over-extension of the democratic revolution
would be consolidated economically by a different type of revolution in
Europe. The ebb of the European revolution, however, left the
Bolshevists with little more than what they had in any case: namely, a
capitalist economy rounded out by land seizures in the countryside. The
fact was clearly acknowledged by the New Economic Policy of 1921. An
open market was not only recognized, but there is every indication to
believe that a policy of tolerating small merchant and individual
peasant enterprises was calculated for a length of time greater than
permitted it by the Stalin regime.[2] The nationalization of industry,
while precipitately introduced on the strength of other, more radical
hopes — as well, it may be agreed, as many immediate expediencies
accelerated — an economic development which confronted Russian
capitalism in any case.
There can be no question that we are simplifying events which might have
at least retarded the depth of totalitarian development in Russia had a
different insight prevailed. In England, for example, we are witnessing
much the same line of development for industry. Left to itself, British
capitalism is apparently moving with less of an edge than did the
Stalinist reaction of 1925-7. The possibilities for intervention are
more pronounced than for Russia during those years. Further speculation
as to the course of the Russian Revolution, however, can be left to
those who are living with, rather than learning from, the past. It is
only necessary to stress, here, the full coincidence of industrial
nationalization with the entire background of Russian capitalist
development. The presence of capitalism in Russia depends not on
nationalization per se — which may reflect reaction and retrogression as
well as progress — but on other factors, which accordingly make for one
or the other.[3]
The burden of any discussion of Russia as a state capitalist society
devolves upon three issues: the existence and weight of competition, the
anarchy bred by the 'Plan', and the difficulties, disproportions and
crises in reproduction created by competition for sources of raw
material and skilled labour. The consequences of these problems, even if
considered only by themselves, are ramified through all channels of the
economy with growing intensity and reach their summit in 'factional'
struggles, disputes, liquidations and regroupings that — like the
incessant jockeying for power among capitalist groups in Europe and
America — have become characteristic of Russian life. The state,
supporting the economy as a whole, reflecting by its function the
weakness of the entire economic structure, becomes the arena in which
the maladjustments of the system take form. It is not so much a 'Plan'
that passes between the managers, supply agencies, Glavks (Glavks are
administrative boards directly below People's Commissariats). and
People's Commissariats, as antagonisms and rivalries between individual
capitalists and blocs of capitalists attempting to secure and advance
their positions.[4]
In theory, the Russian manager is supposed to have very little
independence. Dr. Marshak describes the position of the manager as
follows:
'The Soviet manager is unable to manipulate freely the size of his plant
or his inventories. Nor can he take advantage of market situations,
current or prospective, by bargaining with sources of supplies or with
customers for better prices, or by winning customers through low prices,
and sources of supplies through high ones. To be sure, with supply
chronically lagging behind demand, it would in any case be pointless for
a manager to reduce prices in order to win customers. On the other hand,
to win preference for a source of supplies by bidding up prices for raw
materials would not be pointless. — But it is forbidden.'[5]
Russian law, or the official administration of industry, suggests an
even more severe picture. Sales contracts, plant property, production
and labour efficiency norms, the number of workers to be employed,
average earnings and the annual payroll — in fact, nearly every detail
of the industrial process is supposed to require state approval. Where
this is not pure juridical fiction, it affords a restricted picture. It
would be surprising to conclude that all elements in Russian capitalism
reflect a homogeneous pattern of status and economic control. The
capitalists of Russia, like those elsewhere, maintain variegated
relationships among themselves. Many are subject to the crass authority
of higher elements. Others, probably managers of large, heavy industrial
enterprises, are relatively independent. Assuredly, the People's
Commissars, the Ministers and those who are so situated as seriously to
influence the power relationships between competing blocs, correspond to
the monopolists and commanding bourgeois elements of western capitalist
states. Different 'frames of reference', therefore, exhibit different
views. To a purely juridical mind, German and Russian economic
regulations seem to agree point by point. If we were not familiar with
the clearly capitalistic nature of the German economy under Hitler, Nazi
law would engender the belief that the German economy reflects some sort
of 'managerial society'. From the standpoint of lesser managers, or
those who have not ferreted out the possibilities inherent in any given
situation, the full burden of the totalitarian regulations descends on
their shoulders. To be sure, Stalinist society is more centralized than
elsewhere. But by the same token, influence, power, exploitation and
competition is more severe.
It would be absolutely unpardonable and superficial to discount the
influence of the plant manager as a member of the Party, his connections
in the government, and, above all, the countless tricks and manoeuvres
included in such relationships. But even according to juridical
arrangements, the manager is no mere automaton of the planning bodies
and state. Bienstock, discussing the growth and recognition of
managerial independence, writes: 'Most important, the manager became the
only person responsible for the operation of the plant in all its
subdivisions. The manager's authority within the plant has increased. He
rules the whole production process, bears responsibility for the
technological process, for quantitative fulfilment of the plan, and for
the quality of the goods produced. ... '[6] Since 1938, a sinking fund
is withdrawn from plant output — estimated at about 5 per cent. of
initial capital value — 40 to 60 per cent. of which is at the manager's
disposal for capital replacement as well as repairs. The manager, even
according to economic regulations, disposes of considerable resources at
any given plant level. It is obvious that the lure of a more commanding
position, in a country where disproportions in income are matched only
by the extremities of want, creates and even necessitates bitter
competition for further access to such resources.
The position of the Russian manager gains greater reality when the
authority he possesses is dynamized by the actual relationship of plant
production to the 'Plan'.
Planning in Russia has either been grossly exaggerated or totally
misunderstood. This has, in so many words, been admitted in the day to
day reports of the Russian press itself — all theoretical
pronunciamentos and considerations aside. 'Our planning is still to a
great extent clerical and statistical work', reports Meizenberg,
'absolutely divorced from economic practice.'[7] In this connection,
Bienstock observes: 'The practice of planning has gradually brought the
leaders of Soviet economy to the conclusion that tasks set by plan must
be adjusted in accordance with practice, that planning cannot be
confined to orders but requires continual checking in every phase of
production. In theory, these rules were formulated unequivocally, long
ago. As a matter of fact, principles were not applied until the outbreak
of war in the summer of 1941.'[8] The remark gains significance because
it is now known that, if anything, planning was considerably relaxed
during the war conditions. On an earlier page, the same writer notes
that 'Many plants have been given the initiative in working out their
own production programmes in line with directives of the previous years,
without waiting for new orders from above; they transmit their
programmes to the Glavk or directly to the People's Commissariat. The
Glavk checks and, if necessary changes plans, taking into account supply
possibilities unknown to the plant, the possibility of co-operation
between plants, financial resources, regional needs, etc.'[9]
The Russian manager must operate outside the 'Plan'. 'Commodity funds
(stocks) are often apportioned only five or six days before the
beginning of a quarter: "realization" (delivery) is sometimes greatly
delayed. Ordinarily, delivery is obtained only towards the end of a
quarter, say in its last three or four weeks. The amount of goods
apportioned for a quarter is almost below a plant's real needs, because
the People's Commissariat and Glavk usually fear that the manager's
application for goods, especially scarce materials, is exaggerated.'
(Bienstock — our emphasis, M.S.)[10] Again: 'To obtain goods, he (the
manager) must often send representatives to supplying factories or to
agencies of People's Commissariats and Glavks. Many plants have
permanent representatives in Moscow or other supply centres with the
special task of securing the timely supply of goods, of "pushing" orders
for materials, of arranging shipments, etc. And, of course, the plant
management must maintain a storage organization. A plant manager who
does not get needed goods in time is often compelled to break rules and
seek new ways to supply his plant. There is thus a contradiction between
theory and practice. Theory has, recently taken a few steps toward
practice, e.g., the direct agreements.'[11] The author cites several
examples to illustrate the magnitude of these problems (and, we may add,
operations). ' "During the first eight months of 1940, the Tractor Works
spent 200,000 roubles on telegrams and 250,000 roubles on travelling
expenses." The same story was told half a year later of another giant
plant, the Rostov Works for Agricultural Engineering. ...'[12] In the
course of several articles on Russia in the Herald Tribune, Newman cites
Izvestia to the effect that one third of the ten thousand daily arrivals
in Moscow by railway and plane were on 'unnecessary' government
business. Izvestia makes the accusation that these arrivals waste
millions of rubles in sprees and excursions.
An entire body of market relations underlies the reproductive mechanism
of Russian industry. According to Bienstock, the '... turn-over of many
supply organizations, particularly local offices, is so insignificant
that they are compelled to transgress their jurisdiction to justify
their existence. They buy materials and equipment not needed in their
own branch of industry and sell to plants of other branches. They
become, in a sense, ordinary dealers.'[13] The reports that consistently
appear in the Russian Press are only a surface picture of idle plants or
factories working far under capacity, while goods and raw materials
circulate throughout the country without any apparent destination ...
other, undoubtedly, than a profitable buyer. The incidents are
notorious, frequently embracing some of the most important industrial
projects of the Stalinist regime. An example cited by Bienstock is worth
quoting in full: 'On 3rd June, 1938, the Council of People's Commissars
issued a decree concentrating sale of ferrous metals in a new Board.
Some six months later, the head of this board, S. Volikov, complained
about "individualistic methods" of procuring metals. Metals were sent
from one end of the Union to the other without reason or plan. Often
large quantities were brought from the Urals or Krivoi Rog (Ukraine) to
Moscow as a storage and supply centre, only to retrace a portion of the
original route to get to a consumer.'[14] How often? How 'large' were
the quantities? Volikov, apparently, did not say. But like the daily
'sprees' to Moscow (and only to Moscow?) there is good reason to believe
that such 'infractions' are enormous; in our opinion, decisive. Harry
Schwartz, for example, recently reported in the N.Y. Times that
complaints in the Russian Press indicate one-third (another third) of
the secretaries of collective farms in the Ukraine were transgressing
the rights of collective farm members in 'violation' of the law. Newman,
again, reports charges in Pravda that 'heaps' of vegetables and fruits
were spoiling on railway platforms of the South Western, North
Caucasian, Moscow-Kiev, Tashkent, Askhabad and Turkestan-Siberian lines
in 1947. At the same time, it is indicated, the periodical Bolshevik
claimed that 20 per cent. of railway stock was idle and an even higher
proportion was the case for motor transport!
Throughout, profit reigns supreme. 'The government ...' writes Yugow,
'fixes the factory price for some item at 20 roubles, viz., 14 roubles
production costs, 2 roubles planned profit, and 4 roubles (20 per cent.)
turnover tax. If plant management reduces the cost from 14 to, say, 10
roubles, the profit becomes 6 roubles, of which 2 are planned profit and
4 "above the Plan".'[15] From this it follows: 'The desire to increase
profits has become a real incentive to more responsible, active, and
careful management.'[16] Yugow provides us with examples from heavy
industry: 'In coal mining, for each per cent. of reduction of real cost
of production below planned cost, the manager, assistant manager, chief
and assistant engineers get a bonus of 15 per cent. of monthly salary.
In iron and steel industry, the figure is 10 per cent. Furthermore, for
each per cent. of overfulfilment of planned output, the bonus for a
coal-mine manager and his immediate assistants is 4 per cent. of salary.
In iron and steel, bonuses for extra output are calculated
progressively. If pig-iron production exceeds Plan by 5 per cent., the
monthly salaries of a section head, assistant section head, engineer and
electrical engineer are raised 10 per cent., for each per cent. of
excess output. If the production excess is 10 per cent., the bonus for
each per cent. of excess output is 15 per cent. of monthly salary, etc.
... No less important is the effect of plant profits on managerial
influence, prestige and power.'[17]
The distinction between managers and capitalists or between bonuses and
profits seems to be blurred by the information at our disposal. Does it
mean, as the 'managerial theory' implies, that all capitalists become
managers; that profits, in the socially-significant sense of the term,
become mere bonuses?
Actually, this is only a pseudo-problem. Between the extremes of an
industrial manager in a small, circumscribed shoe-factory and a People's
Commissar, the distinction is quite clear. It is necessary that the
'spectrum' of Russian industrial authority be viewed under the aspect of
qualitative differences rather than similarities that blend one shade of
control into another. If the premises of competition, disproportions,
direct agreements, etc., are granted, we need only compare the
historical effect of Stalinist society with those produced in known
capitalist sectors of the world. Should they coincide, the ostensible
'chain' of authority that juridical fiction reduces to the common
denominator of 'manager' requires the assumption of differentiation
between managers and capitalists. The presence of specific social forces
and their effects summons, as it were, the ruling class and its
capitalistic character — concealed (at most only to economic
theoreticians) by the impersonality of the system and the anonymity of
the regime — into real life. Neither the propaganda of the apologists
nor the 'intentions' of their leaders can alter such indispensable
distinctions.
At first glance, a comparison between Russia and trends in world
capitalism presents many divergencies. Among these, the most conspicuous
are:
First, the decline in the standard of living ,on an international scale.
Stalinist propaganda, on the other hand, celebrates a steady rise in the
well-being of the Russian masses. The comparison, we are reminded, must
be made between pre-revolutionary and contemporary Russia rather than
between Russia and advanced capitalist states. Once this criterion is
adopted, we are assured, there can be 'no doubt' that the material
conditions of the people have improved steadily.
Second, since imperialism is characterized by the export of capital,
Russia cannot be viewed as an imperialist state. This, once stated,
often seems to suffice. Russian expansion is ascribed to military
exigencies, the fear of war, the desire to spread 'communism', etc. —
but not to imperialism in the scientific sense of the term.
Finally, all accounts of Russia never cease to point to the continual,
'unprecedented' growth of industry at a time when the tendency elsewhere
has long been toward industrial contraction. The endless panegyrics, at
least, indicate mounting, swollen statistics in every field of
production. Each five year plan is completed in four years, and every
plan is made to mark a milestone over earlier conditions. This has even
impressed opponents of the regime — so we are told by friends of the
regime.
By separating crass fact from pure fiction and qualitative analysis from
the blinding storm of meaningless statistics, a second glance discloses
basic similarities between Russia and world capitalism.
1. The standard of living in Russia. Now on this question, there are
sound reasons for believing that if the material conditions of the
masses have shown a steady improvement, Russia is a striking exception
to the trends in world capitalism. In an economy based on competition,
only a cold-blooded selection by destruction operates. To exist, in
effect, means to survive; and to survive means to absorb rival capitals.
The 'ideal' of bourgeois 'enterprise' is full control over the
productive process and market. This alone, the system dictates, can
assure survival, and provide the security and stability which all
elements of the system continually endeavour to achieve. In time, the
elements of the system change their character. Numerous capitalists are
transformed into a handful of large capitalists, commanding whole
branches of industry, national monopolies and international cartels. The
growth of monopolies and cartels only serves to intensify the degree of
rivalry and instability. Huge masses of capital, formerly controlled by
many individuals, are now pitted against each other by a few
monopolists. The system must increase its demands upon all the means at
its disposal; demands, in turn, which are always insufficient to meet
the growing dimensions of the struggle. Reforms, permissible in an
earlier context, are withdrawn; exploitation is intensified; living
standards are depressed.
Oddly enough, the Stalinist regime has maintained a statistical
conspiracy against the apprehension of facts concerning the standard of
living in Russia. Despite much official propaganda, photography and
guided tours of pre-war vintage, we are aware of no official indices
tracing the material conditions of the people in any way comparable to
the information provided by most, if not all, capitalist countries. So
far as direct analysis admits, the economic position of the masses is
shrouded in mystery; cast in vague proportionate accounts and classified
into statistically-useless categories. The indirect analysis of Russian
data, however, is of remarkable interest. On the basis of Hubbard's data
comparing the average food consumption of Petrograd textile families
during Czarist days with later periods, Peter Meyer has demonstrated
that between 1929 and 1937 the average standard of living declined to 34
per cent. below pre-revolutionary days. The same analysis shows an
increase of 54 per cent. from the Revolution to 1929.[18]
Material in Colin Clark's studies of Russian statistics show a decrease
of around 20 per cent. in food consumption per head between 1913 and
1934.[19] Whatever the differences between both analyses, the depth of
the downward trend is unmistakable. To bring matters as much up to date
as is possible, Vera Micheles Dean observes — again, on the basis of an
indirect analysis of Russian nominal wages (!) — that 'if 1938 is taken
as a 100, the index of increase in nominal wages is 165 and 175,
depending on the categories of work. Owing to the continuance of high
prices, however, and to various curbs recently [1947 — M.S.] placed on
individual purchases real wages have actually undergone a sharp
decline.'[20]
Recent Press reports from Russia indicate that the regime has placed the
monetary policy on the Gold Standard, accompanied by 'drastic' price
reductions. We must confess that on the basis of previous 'price
reduction' policies, we view this latest 'achievement' with considerable
scepticism. On 16th September, 1945, for example, the price structure
was also overhauled. Miss Dean observes: 'The price of certain essential
rationed goods were sharply raised on an average of 180 per cent. over
previous prices — with the effect of further draining off money in
circulation. By contrast, prices of unrationed goods in commercial
government stores were reduced by 30 to 55 per cent. While the upward
revision of prices of rationed goods and the downward revision of
unrationed goods were intended to close the gap between the two sets of
prices [an incredible explanation by the regime! - M.S.] the gap remains
substantial."[21] It is reasonable to question if the gap is being
closed by lowering or raising the price of commodities within the
purchasing range of the masses. Thus, on 17th July, 1948, the Stalinist
government announced a 10 to 20 per cent. reduction of prices in state
stores. The reduction was confined to such items as bicycles,
phonographs, watches, caviar, Moskvich automobiles, hunting guns,
cameras, perfumes, cosmetics, stoves and ... beer and vodka.[22]
In the infamous currency 'reform' of December, 1947, prices remained
essentially the same as before except for bread and a few staple items.
W. Bedell Smith notes that the tremendous hardships imposed by the
production norms established for 1950 led to such demoralization that
the Government had to change 'its production plans to increase the
amount of consumer goods available for purchases. ... These measures
gradually improved the production situation to the point where the
Government finally felt able to act drastically to lower the purchasing
power of the Soviet people in order to reduce the general demand for
consumers' goods and relieve the pressure on light industry. The
currency reform undertaken in December, 1947, accomplished this. The
existing ruble currency was declared obsolete without warning and new
currency was issued that was exchanged at the rate of one new ruble for
ten old rubles. State bonds were devaluated by two thirds. Bank
deposits, however, were exchangeable at equal value, but only up to
3,000 rubles with a smaller return on larger amounts. Food rationing was
removed at the same time.
'The farmers were wiped out, as their money was not in banks but in
state bonds and currency. To pay taxes and meet current expenses, they
sold food, so that for a brief period immediately after the monetary
change there was a flood of food in city markets for the first time in
years. This lasted only a short time, and thereafter the industrial
workers found that an even more drastic form of rationing actually
existed, as only a limited quantity of each kind of food was sold to one
person.'[23] The same 'rationing' apparently did not apply, so far as we
know, in the commercial government stores catering to the Stalinist
millionaires, where white bread was easily obtainable at 7.5 times the
value of the same type of bread 'for sale' in regular stores. But is it
necessary to enter into the income differentials of an economy which
bountifully provides for the few who are privileged with truly
astronomical incomes?
2. Imperialism and the export of capital. In this connection, there has
been so much misunderstanding, that a number of general remarks are in
order.
The course of capitalist development evokes many contradictions that
shape and give it form. Since competition requires the steady
replacement of labour by machinery, at least two simultaneous effects
are evident. The rate of profit declines and millions are deprived of
employment. As the internal market contracts, the entire productive
process tends to follow in its wake.
Attempts to compensate for this contraction turn the bourgeoisie to the
international market particularly the super-profits of colonial trade
and industry. It is apparent, of course, that capitalism always
endeavoured to reap these imperial profits. The wealth derived from
colonial exploitation was a prerequisite for the primitive accumulation
that launched capitalist development in the modern era. The point to be
made, however, is that when the internal market contracts, imperialism
comes into its own as an imperative force, an absolute precondition for
the very life of the system. For a while, imperialism yields a spurt to
the economy, extending the limits of the internal market and providing
new bases for industrial expansion. But in time this engenders further
contradictions: the obstacle of new, rival imperialisms and of
entrenched predecessors; increasing exhaustion due to frequent
conflicts, etc.
In its 'classic' period, imperialism was characterized by the export of
capital.[24] This, perhaps, more than the paeans of Kipling, encouraged
many liberal economists to believe that the 'white man's burden' could
only mean the full industrial development of the colonial world.
Actually, capital export was invariably one-sided, calculated not to
develop a competitor but so to upset aboriginal social relations that
dependence, rather than independence, was emphasized. The effect of
imperialism, therefore, has always been to create so much misery and
discontent, that national uprisings (of one degree or another)
continually follow in its wake. As the contradictions of capitalist
imperialism converge into a general crisis, the export of capital is
subordinated entirely to the needs of colonial regimentation, policing
and control. A sort of Roman parasitism prevails. All the material and
spiritual sources of resistance are numbed by planned starvation and
terror. Masses of population created by the capitalist mode of
production are reduced, enslaved or exterminated. Industrial activity is
rendered more and more one-sided and dependent, or — in many cases —
comes to a virtual standstill.
Many colonies have long since travelled part of the road to this new
barbarism. Indeed, the prototype of contemporary enslavement and
exploitation was nurtured for generations on the continents of Asia,
Africa, South America and in the archipelagoes of the Orient. But the
colonial countries do not stand alone. Under the heightened conditions
of present-day rivalry and instability, even the industrially-advanced
nations of Europe face oppression and reduction to a colonial status.
Europe enjoys the 'special status' wherein her stabilization involves no
less than the physical destruction of much of her industry. Thus, the
'Iron Heel' German capitalism prepared for Europe now descends upon
Germany. Industries are destroyed, millions bombed out and permanently
uprooted. The country is dismembered and occupied by foreign imperialist
armies. The 'loser' of the last war, however, is only the harbinger of
conditions that await nearly all the 'victors' of to-day. Eastern Europe
already shares the fate of Germany; England, France, Belgium — all
progressively become the economic and political instruments of American
policy. The economic one-sidedness and dependency that are imposed on
the colonial world eventually face the earlier colonial oppressors
themselves. The international market, like the internal market,
contracts; all social existence threatens to shrivel and decline.[25]
It is in this milieu — that is, under the conditions and possibilities
created by the second World War — that Russia definitely embarked upon
an imperialist course. Initially, this took form in collaboration with
fascist Germany, If the seizure of territory from Finland, Poland and
Rumania is often excused by military 'expediency', further negotiations
with the Nazis concerning the hinterlands of Asia leave absolutely no
doubt as to the imperialist character of Russian expansion. Ribbentrop's
appreciation of Russian 'natural spheres of influence' is very concise:
'The focal points in the territorial aspiration of the Soviet Union
would presumably be centred south of the territory of the Soviet Union
in the direction of the Indian Ocean.'[26]
To-day, the imperialist activities of the Stalinist regime occur, as is
the case with the rest of Europe, under the shadow cast by the
polarized, concentrated power of the United States. Beside this
'American colossus', rivalry must generally find circuitous routes:
infiltrate into weak positions; operate in the crevices and around the
fringes of American control. The phenomenal privileges allocated to
Russia, however, are explicable only in terms of the political
limitations of the United States. The Stalinist regime largely holds
those positions where the need for the naked application of force places
the bourgeois-democracy of the United States at a current disadvantage.
To employ the more precise formulation of Ernst Zander: 'The secret of
the situation, as of America's weakness, consists in Russia having
become her most reliable and indispensable policeman in Europe and Asia.
It is predominantly from this that Russia derives her 'astounding'
strength in the haggling with other Powers — no other country can be
entrusted with the ruthless police function once the Stalin regime
collapses.'[27] In effect, the Stalinist regime complements and is, for
the present, indispensable to American imperialism. As in 1939,
Stalinism remains a precondition for world reaction and retrogression;
in the first case, precipitating World War II, and to-day, assuming the
functions of Hitler during the thirties.
In this context, where expansion goes hand-in-hand with total parasitism
dictated by rivalry and survival, where the dismemberment and
exploitation of advanced capitalist countries makes its appearance, the
export of excess capital resources becomes an ancillary feature of
imperialism.
3. The growth of Russian industry. If Russian industrial development
means anything, it refers first and foremost to armaments industries.
Much the same can be said for the entire capitalist world. The armament
industry is, to-day, the lubricant of the entire system and growingly
extends over consumer goods production precisely because it, alone, can
co-exist with a falling standard of living. Guns, tanks, aircraft —
weapons of all kind — explode in waste. They require only the
intervention of the state as a purchaser. The state, on the other hand,
becomes a buyer by virtue of the revenue it exacts from the system as a
whole; principally, by milking the masses dry in true publican fashion.
In the United States, this essentially takes the form of taxation; in
England, rationing and wage fixing; finally, in Russia and Germany,
naked police supervision over the living standards of the people. The
poverty of the masses is 'planned' — and this, by far, is the major
function of planning.
As greater recourse is had to direct measures, the more armaments are
required to keep the masses in subjugation. These operations occur on a
world scale: occupation armies, arms for docile elements abroad, etc. To
be sure, profits too require distribution (again: 'planning') to sustain
the state as the essential agent for, and market of, the system. In this
rule, the state frequently appears as the disciplinarian of contending
bourgeois blocs. Although by no means the most desirable situation for
elements accustomed to a laissez-faire economy, choices cease to exist.
The system must be sustained as a whole.
Despite the fact that the Stalinist regime came very close to defeat in
1941-42, it compared only with Germany as a producer of armaments during
pre-war years. Between 1934-39, Russian armament expenditure was twice
that of England. 'It seems likely,' writes Prof. A. J. Brown, '... that
the Soviet Union spent at least as much on military purposes in the five
years or so before she was attacked as Germany had spent in the
corresponding period leading up to her aggression against Poland.
Germany's two-year lead in this race, however, gave her a formidable
advantage; at the time of her attack on the USSR her military
expenditure was probably still at least twice that of Russia though not
all of it — perhaps little more than two thirds, could be applied on the
eastern front. ... Whatever the margin of error in the calculation, it
is clear that the real cost of military preparation to the Soviet Union
was, like the subsequent burden which it bore in battle casualties, the
heaviest carried by any nation.'[28]
By examination of mere surface facts, economists judge that expenditures
on armaments comprised 6 per cent. of Russian national income in 1934;
12 per cent. in 1937; 25 per cent. shortly before the German invasion;
and — according to recent estimates in Life magazine — 25 per cent.
to-day.[29] These assumptions are much too cordial. We submit that the
Russian economy, from the very logic of the system, is oriented as a
whole toward armament production; that proportions, estimates and
statistical juggling are entirely meaningless. This situation gestates
in capitalist development itself — even in such bastions of industry as
the United States. Armament production is the life fluid of the
bourgeois mode of production, the co-efficient of all industrial output,
the one dollar that keeps the other three, four, five or ten in motion.
In Russia, however, such determinations are already fruitless. Armaments
are the absolute foundation of the economy itself; the Moloch to which
all resources are delivered — the sacrificial altar of all industrial
development.
It becomes absurd, from this standpoint, to regard the index of Russian
production as any hopeful sign of progressive possibilities. Steel, in
Russia, means guns or the means for making guns. If supporters of the
Stalin regime hope that perhaps (and not without a revolution against
the regime) the Russian people can be induced to use bayonets for
buttering bread, then it may be supposed that they will dwell in cities
of tanks, wear the drab grey of the army uniform and use helmets for
toilet bowls. ...
During the depths of the economic crisis, almost two decades ago,
letters to the American Press opined that the unemployed should be
placed on unseaworthy rafts and set adrift. In principle, the suggestion
was not original. Although required by German fascism ten years later
(efficiency often dictating crematoria), it was long anticipated in the
slave labour camps of Stalinist Russia.[30] For more than a quarter
century, Russian capitalism has followed the relentless logic inherent
in contemporary world development. Through countless purges,
'liquidations' and 'collectivization' drives, it has literally
appropriated the bodies of millions of men, women and children whom the
contracting system can no longer support on the basis of anything
remotely resembling a free labour market. Like chained gangs on ancient
latifundia, they are placed to work in the bleak hells of Siberia, in
mines and on wastes where life is scarcely maintainable and quickly
passes out of existence. From the Caspian Sea to the Solovietsky Islands
on the White Sea, hopeless masses of human beings, living and dying
under unbearable conditions, are devoured by the camp system. Whole
areas like the gold-mining region of Kolyma, are entirely 'populated' by
chattel slaves, comprising every profession and vocation, occupying
camps on the dimensions of cities (Magadan, for example), serviced,
maintained and renewed by the system. The law of population under
moribund capitalism dictates that millions, pushed outside society by
the general contraction, must be worked to death.
But the individual merely perpetuates the species which, locust-like,
slowly consumes all before it. For each who perishes, two appear. Slave
workers recruit slave technicians; the technicians recruit slave
engineers; these, in turn, are followed by guards, factories and more
camps. The new mode of labour reproduces itself not only from the inner
crisis of capitalism, but from the division of labour in modern
industry. It recreates the entire juridical, political and economic
fabric — adapting all institutions to its needs and, by giving rise to
its own qualitative forms, threatens to negate the capitalist mode of
production itself.
Slave labour already germinates in every phase of the Russian economy.
The internal passport, the work-book, countless labour regulations
ranging from 'job lateness' to 'sabotage', compulsory vocational
training, etc., etc. — all reduce the industrial worker to a captive of
his specific job.[31] On the 'collective' farms, practically every
pretence is cast to the winds. Yugow makes the following significant
observation of the Russian kolkhoz system:
'Productive machinery, with the exception of small tools, belongs as
already mentioned to the government, which, by agreement, works the land
and harvests for the kolkhozes. Labour is furnished by the kolkhoz,
which, in addition, is obliged to assign a specified percentage of its
manpower to certain compulsory tasks (road work, transportation, felling
timber, etc.) and to work in urban factories.'[32]
Centuries ago, capitalism took form in mediaeval Europe. By developing
the instruments of production, the possibility was poised for a historic
solution to want and exploitation. With the first World War, the curve
of capitalist development took a downward turn; and here, history has
reached the heights of irony. Alongside the most remarkable
technological achievements, undreamed of advances in electronics,
servo-mechanisms, turbo-engines and nuclear physics (in a word, all the
means of lightening human labour) reappear the institutions, want, and
exploitation of the past, infinitely intensified. Literally: moribund
capitalism generates its own negation in the forms of a dark, barbaric
past, when the material bases of mankind lay at the threshold of
pre-history. The system converges toward stability on the shambles of
whole cultures. Industry, as it were, 'thrives' in laboratories
surrounded by a desert of human agony and hunger, only to achieve
florescence in ... armaments. All the ingenuity of mankind — from
science, communications and technology to the products of the printing
press and the paint-brush — conspire to suck every isolated or remote
community into the rising slave state. Indeed, as compared with the
Stalinist regime, which can be considered no more than a mirror of
relentless developments in Europe and America (if authentic democratic
forces fail to intervene), the particularness of past mediaevalism will
appear as a veritable haven for the human spirit.
23rd June, 1950.
[1] Although Czarist Russia ranked far behind the West industrially, the
concentration of Russian industry exceeded the United States' during
corresponding periods. In 1910 for example, enterprises employing 500
workers or more comprised 53 per cent. of the number of workers in
industry, as compared with 33 per cent. in the United States. During the
first decade of the century, such concerns increased from 46.7 per cent.
to 53.5 per cent., while factories employing up to 50 workers, and
others from 50 to 500, declined from 14.3 percent. to 11.6 per cent.,
and from 39 per cent. to 34 per cent. respectively. The specific weight
of larger enterprises showed greater gains between 1901 and 1910.
Enterprises employing over 500 workers jumped from 3.5 per cent. to 5
per cent. of Russian industry. Those ranging up to 50 workers dropped
from 70.5 per cent. to 65.7 per cent.
Monopolies definitely appeared in the career of Russian industry as
early as the 'eighties (the sugar industry), although precedents had
been established by life insurance companies about a decade earlier.
After the turn of the century, 70 to 75 per cent. of all sheet metal
works were in the hands of a metallurgical monopoly: 'Prodamet'. By 1908
'Prodamet' held a dozen of the major metallurgical plants in its grasp,
having expanded in the meantime into many metal products. Along with the
'Trubopradazha' syndicate (pipes) and the 'Prodarud' syndicate (ores),
nearly all of south Russian metallurgy was monopolized in less than ten
years.
Monopolies spread all over the country and to all branches of industry
and transport. The 'Committee of Ural Ore and Metal Plants' syndicated
80 per cent. of roofing iron. Farm machinery concerns combined in 1907
to regulate at least 72 per cent. of many agricultural implements.
Ninety-five per cent. of railway cars were produced by the 'Prodvagon'
syndicate in 1907, to be matched by 90 per cent. of locomotive
production from another syndicate. The 'Med' syndicate controlled 97
percent. of copper production (1913); 'Produgul' (1906) accounted for 75
per cent. of southern coal output; a petroleum syndicate encompassed 65
per cent oil production, etc. Monopolies appeared in light industry as
well as heavy industry; in commerce as well as transport.
Although many Russian syndicates were interlocked with, and often
controlled by, foreign capital, there can be no question that the
Czarist regime was the major support of industrial monopoly. Russian
petroleum combines leaned on, and were aided enormously by, the state in
competitive struggles with Standard Oil. In the person of Bunge,
Vyshnegradsky and Witte, the government consciously abetted the
development and concentration of industry. Heavy orders, for all
practical purposes, formed so many subsidies to every branch of
metallurgy. Correspondingly, direct intervention by the state formed a
conspicuous part of Russian economic operations. Alcoholic beverages
were a near-monopoly of the regime. The government owned and processed
the output of many mines in Siberia, the Altai and the Urals. State
activity was felt in communications (railway and telegraph), credit (the
major banking concerns were owned by the state), forestry, large-scale
agriculture, etc. By the time of the Revolution, the state and the
bourgeoisie were interlinked in every phase of industry.
[2] The remarks of Lenin, in this connection, are of interest: 'We are
no longer attempting to break up the old social economic order, with its
trade, its small scale economy and private initiative, its capitalism,
but we are now trying to revive trade, private enterprise and
capitalism, at the same time gradually and cautiously subjecting them to
state regulation just as far as they revive.' (Lenin, Pravda, 7th
November, 1921.)
[3] Naturally, this also applies to Britain, where the Labour Party
presents its nationalization programme as a step toward social progress.
This programme, there can be no question, abets the introduction of many
totalitarian features, first adopted in Russia.
[4] No less a figure than Stalin gives us a picture — rather on the
microscopic level — of the cliques and blocs formed by Russian
officials. Thus:
'Most frequently workers are selected not according to objective
criteria, but according to accidental, subjective, narrow and provincial
criteria. Most frequently so-called acquaintances are chosen, personal
friends, fellow townsmen, people who have personal devotion, masters of
eulogies to their patrons, irrespective of whether they are suitable
from a political and business-like standpoint. ... Take, for example,
Comrades Mirzoyan and Vainov. The former is secretary of the regional
Party organization in Kazakstan; the latter is secretary of the Yaroslav
regional Party organization. These people are not the most backward
workers in our midst. And how do they select workers?
'The former dragged along with him from Azerbaijan and the Urals, where
he formerly worked, in Kazakstan thirty or forty of his "own" people,
and placed them in responsible positions in Kazakstan.
'The latter dragged along with him from the Donbas, where he formerly
worked, to Yaroslav a dozen or so of his "own" people also, and also
placed them in responsible positions. Consequently, Comrade Mirozoyan
has his own crew. Comrade Vainov also has his.' (J. Stalin, Mastering
Bolshevism, 1946 edition, p. 38).
[5] Bienstock, Schwarz and Yugow, Management in Russian Industry and
Agriculture, ed. by Feiler and Marshak, Oxford University Press, N.Y.,
1944, p. XIX.
This work is one of the most complete, and certainly one of the most
objective, accounts of economic relations in Russia. The authors, at
least Mr. Schwarz, seem to tend toward a managerial theory of Russian
society. The material cited here, we believe, demonstrates that such a
theory is untenable. The difficulties that appear to present themselves
in the minds of the authors are a traditional laissez-faire conception
of capitalism and a disposition, particularly noticeable in Marshak's
introduction, to take Russian law at face value; viz., '... it is
forbidden'.
[6] Ibid., p. 15.
[7]
L. Meizenberg, On the Economic Plan, in Planned Economy, 1939, No.
10, p. 12. (Quoted from B., S., & Y., p. 56.)
[8] B., S., & Y., etc., p. 57.
[9] Ibid., p. 50.
[10] Ibid., p. 63-4.
[11] Ibid., p. 62.
[12] Ibid., p. 64. Under the headline, 'Supply Woes Cut Soviet
Production', Mr. Harry Schwartz (not to be confused with Solomon Schwarz
of the work cited in the foregoing) gives the following report:
'Leningradskaya Pravda recently printed an article by a factory director
in Leningrad complaining of the harm done to production by supply
difficulties. Needed materials often arrive late, forcing factories to
cease or partly curtail output. ... In Leningrad alone, the article
reports, hundreds of government officials employ thousands of persons
who are supposed to facilitate necessary transactions between different
enterprises. But these work so poorly and are of so little help that
many factories have to spend large sums foraging for themselves so that
their work can continue.
'The situation is so bad, the director writes, that to meet its needs
for electric lamps, motors, transformers, optical equipment and
forgings, his factory has had to institute production of these items
itself. At the same time, he says, Leningrad has large factories
producing all these items, factories that are by no means always working
at capacity.
'At the root of the situation, he declares, is the overly bureaucratic
organization of the Soviet industrial supply system. Factories adjacent
to each other are not allowed to make arrangements directly to supply
each other's needs if they belong to different ministries. These and
other restrictions on enterprise managers' initiative tie them hand and
foot, he complains, and must be removed if matters are to be improved.
'A similar situation exists in the local consumer goods industry in
Moscow, the newspaper Moscovskaya Pravda reports.
'The supply system for these enterprises is working so badly that it is
estimated that they will fail to receive about 600,000,000 rubles worth
of raw materials that they require, about one-third their total needs.
Because of the lack of materials, these enterprises will not be able to
achieve this year's output plans for such goods as furniture,
phonographs, children's bicycles, aluminium utensils and knitted goods.
'To get around supply difficulties, some factories in Moscow do not
produce articles for which they are best fitted, but only such goods for
which they are able to obtain materials.
'Another consequence of the materials shortage, Moskovskaya Pravda
reveals, has been the development of large scale illegal barter trade
between enterprises. Hundreds of middlemen — known colloquially as
"clever lads" or "tipsters" — swarm around enterprises and ministries to
find out what surpluses and deficits each has. They arrange trades
between factories so desperate for needed goods that they are willing to
pay any price.' (N.Y. Times, 11th June, 1950.)
[13] Ibid., p. 63. In 1940, Russian supply organizations numbered some
5,000 agencies, employing 126,000 workers and involving costs of service
equal to 11 per cent. of turnover.
[14] Ibid., p. 63.
[15] Ibid., p. 79.
[16] Ibid., p. 82.
[17] Ibid., pp. 94-5.
[18] Peter Meyer, 'USSR: A New Class Society', Politics, March, 1944.
Meyer establishes a table on the basis of Hubbard's data showing that if
the cost of one week's food for 1913, 1929 and 1937 is taken at 3.40,
5.90 and 49.60 rubles respectively (Hubbard's data is 3.42, 5.89 and
49.56 rubles); and if industrial wages are taken at R25, R66 and R245
(Hubbard's data for the same period are R25, R77 and R245 — Meyer claims
that Hubbard 'gives the monthly wages for 1929 as 77 rubles, but he has
made an error, having taken the figure for 1930.'), the conclusions are
quite obvious. The index of food prices will be 172 and 1,449 for 1929
and 1937, respectively (with 1913 taken as 100); and the index of real
wages will be 154 and 68 for 1929 and 1937, respectively (with 1913
taken as 100). Mr. Hubbard's conclusions, however, are not too clear. He
writes:
'On an average, the 1937 prices of essential clothing and foodstuffs
were at least five times the 1929 prices, while the average wage was
only slightly more than three times the 1929 level. In other words, the
purchasing power of the worker's income in 1937 was about 65 per cent.
of 1929. The retail price index for all consumers' goods in 1929 was
about 200 (1913, 100) and the wage index about 308. This would seem to
indicate that the 1929 wage purchased about half as much again as in
1913; but as the 1937 wage had only about two-thirds of the purchasing
power in 1929, it looks as though real wages in 1913 and 1937 were
pretty well at the same level.' L. E. Hubbard, Soviet Labour and
Industry, MacMillan, London, p. 165, 1942.)
[19] Colin Clark, Critique of Russian Statistics. MacMillan, London, pp.
25-6, 1939.
[20] Vera Micheles Dean, 'Russia's Internal Economic Problems', from
Foreign Policy Reports, 1st July, 1947.
[21] Ibid., p. 108. For a truly curious excuse: unemployment insurance
in Russia was abolished (1930) 'in view of the disappearance of mass
unemployment in the U.S.S.R.'. Decree of People's Commissariat of
Labour, 11th October, 1930. See our section on slave labour.
[22] According to the N.Y. Times, 18th July, 1948, a Russian worker must
work two and one-third hours to purchase a bottle of beer.
[23] N.Y. Times, 14th November, 1949.
[24] The emphasis placed on the export of capital, in discussions around
imperialism, has often been at the expense of other features of equal —
and, under present circumstances, greater — importance; viz., industrial
concentration, monopoly, the re-division of the world, etc.
[25] The process, to be sure, is uneven and combined. Repressions begun
in the colonies are taken up in Europe, only to extend from Russia and
the Balkans back to China, Indonesia and Africa,
[26] Memorandum of the Final Conversations Between Reich Foreign
Minister von Ribbentrop and Chairman of the Council of People's
Commissars of the U.S.S.R. and People’s Commissar for Foreign Affairs,
Herr Molotov, on 13th November, 1940, from Nazi-Soviet Relations,
1939-41 (German Archives) p. 25, U.S. Department of State.
[27] Contemporary Issues, Vol. 1, No. 1, 'Concerning Germany and World
Development', by Ernst Zander.
[28] A.J. Brown, Applied Economics, Rinehart and Co., 1948, pp. 31 and
36.
[29] Life, 27th February, 1950.
[30] Slave labour was undoubtedly intended as a permanent feature of
German fascism. It is not through regard for, but in disregard of, the
interests of German capitalism that the 'surplus' population of East
Germany is permitted to exist (at Allied sufferance) 'only' as ... a
starving mass of refugees. The destruction of 4,000,000 Jews comprises
no more than the form of selecting 4,000,000 human beings who had to
perish under capitalism. The list was later to include: Gypsies, Poles,
Russians, Ukrainians, etc.
[31] These features, of course, extend to areas under Russian
occupation. Mr. MacCormac of the N.Y. Times (19th June, 1950), for
example, reports offhandedly:
'Like Russia the satellites now are experimenting with prison labour as
a solution to their difficulties. New legal codes are being adopted
after the Soviet model to provide for the "reform" of certain classes of
prisoners by sentencing them to labour for one month to two years at
"reduced wages".'
[32] B., S., and Y., etc., p. 136.