Date: Thu, 3 Apr 1997 11:33:47 +0200
Subject: M-G: Re: LOV and state capitalism


A few comments on Dave B's response to my posting on the character of the
Soviet Union, the law of value and state capitalist theory.

Dave writes:

>Well I dont think I neglected this question. The premise of my
>argument which is drawn, as I see it, straight from Trotsky,  is that the
>fundamental contradiction faced by the SU was that of the law of value
>operating internationally, and the planned property relations also
>reflecting the strength of the international working class. The
>concept of the SU as a transitional society means that it is caught
>between the past and the future, both present in the form of this
>contradiction.  The internal dynamics of the SU are therefore
>expressions of this contradiction mediated by the relationship between
>the planned property relations and the bureaucratic dictatorship. So
>that the future [ the forward thrust to a workers plan] is is held back
> by the past [by the bureaucracy having to resort increasingly to the
>LOV to substitute for the collapse of bureaucratic planning].
>These contradictions, rather than pardoxes, are fleshed out very well
>in Hughs next paragraphs.


First, I should obviously have put quotes round "paradoxes"! I wanted to
stress the *enormity* of the apparently irreconcilable contradictions found
in such a transitional state as the Soviet Union (and the other workers'
states of which the SU can serve as a model in this discussion).

Second, the operations of the law of value are determined by the world
market as  a whole, but one of the most important contradictions relating
to the SU was the fact that the world market was split into two
fundamentally antagonistic economic entities, in one of which (the SU) the
capitalist operation of the law of value was absent -- no production of
commodities for the market, no market for the commodity labour-power. The
situation was further complicated by the non-free-competition monopoly
capitalist imperialism dominating the other entity, so that there was a
*double indirectness* to the operations of the law of value, less under
imperialism, more under pre-socialist transition.

But the law operated nonetheless (eppur si muove!). The way it operated was
by assigning an average value in terms of socially necessary labour time
for any given commodity in the world market. Given this value, goods that
diverged from it were either

a) (lower value = good) in a privileged position in the market and could
locate their price anywhere between their actual cost of production and the
average market price and make a killing or at any rate never less than the
average rate of profit

or

b) (higher value = bad) in a threatened position in the market, because
their actual cost of production was over the average market price, and
their only choice was to sell below cost and see their capital bleed away
or to sell at cost and see themselves priced out of the market.


The way this affected the SU was partly political (I mentioned this before
-- people get angry if the same thing is available much cheaper somewhere
else) and partly economic, in that the socially *unnecessary* labour time
*wasted* (in terms of the world market) on producing these high-cost goods
naturally failed to be put to use in other sectors of the economy and thus
distorted the distribution of both labour and goods in the economy. So
imperialist monopoly prices sucked value to high-tech capital-intensive
capitals in the shape of surplus profits, distorting the distribution of
labour and goods in the imperialist economy, while Soviet political
monopoly prices (monopoly of foreign trade, prices set by plan)
haemorrhaged value mainly in terms of wasted labour that was not able to be
set to work in other needed production.

Now the important thing is that these processes are *absolutely inevitable*
given continued imperialist hegemony in the world market. The political
regimes governing imperialist or workers' states are *irrelevant* to these
economic processes. It is impossible to wish them away. Voluntarism makes
not the slightest dent in them -- neither the victory of socialism nor the
victory of imperialism can be *proclaimed* while the battle is still raging.

It should be obvious that the economic pressures created by these tensions
are huge, and that as long as imperialism has hegemony in the world market,
the spontaneous *economic* movement of the processes is towards the
extinction of the less efficient producers.

This should make it equally obvious that *only* conscious political action
to protect the *initially* less efficient collective producers until their
*potentially* greater efficiency is realized will be able to put up the
necessary resistance to these damaging spontaneous developments. The
necessary *historical* superiority of socialism as a mode of production is
an essential ingredient in this conscious political action, but it can
never be claimed that an as yet merely *potential* superiority is an
*actual* superiority without weakening the political resolve of the masses,
who will not be fooled in this respect.

So a strong proletarian state during a period of continued imperialist
hegemony is absolutely necessary if a pre-socialist transitional economy is
to develop into a socialist economy and (given further transformations of
capitalist to socialist property relations in a number of countries) itself
assume hegemony in the world market.

Preobrazhensky's book The New Economics (and the discussions in it):

>> 1 The method of theoretical analysis of Soviet economy
>>
>> 2 The Law of Primitive Socialist Accumulation
>>
>> 3 The Law of Value in Soviet economy
>>
>> Appx Once more about Socialist accumulation: reply to Comrade Bukharin

hammers home the things that need to be held in mind regarding the
necessary political-economic action to be taken by the young proletarian
state.

And even though "the political regimes governing imperialist or workers'
states are *irrelevant* to these economic processes", they are by no means
irrelevant to the issue of how *best to manage* the pressures arising from
them and guide the socialist (or pre-socialist transitional) sector of the
world market from being weak and subordinate to being the dominant factor
in world economic and political development.

And the different effects of different regimes (principally the negative
effects of various kinds of Stalinist regimes) on the development of a
pre-socialist transitional economy provide important lessons for
present-day revolutionaries working to throw out capitalism and replace it
with socialism. Anyone dismissing this kind of discussion as the irrelevant
flogging of a dead horse should reflect on where the conscious political
action needed to run a revolutionary dictatorship of the proletariat will
come from if it turns its back on the real political and economic
experience of real proletarian states.


Cheers,

Hugh






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