The capitalist economy of the Soviet Union in the Khrushchev-Brezhnev period in prolonged stagnation and deep crisis

At "Unity and Struggle" issue 23 (November 2011) we published an article with the title The working class in the Khrushchev-Brezhnev period was no longer the owner of the means of production

At "Unity and Struggle" issue 24 (May 2012) we published the second  of this article with the title In the commodity economy of the Soviet Union, labor power had been anew converted to commodity

The third part published in our blog has the title The commodity economy of the Soviet Union in the Khrushchev-Brezhnev period: a complete and permanent capitalist economy

Here is the fourth part:

The capitalist economy of the Soviet Union in the Khrushchev-Brezhnev period in prolonged stagnation and deep crisis

The restoration of capitalism in the Soviet Union did not only bring about the emergence of all the characteristic features of capitalism in the country’s economy but it paved the way for a prolonged economic stagnation, especially during the Brezhnev period, and led the whole society to an unprecedented bourgeois degeneration and in a deep and all-sided crisis that included all the known scourges of the old decadent, rotten and superseded bourgeois society.

During this period, not only was there a long-term, general economic stagnation but also a decrease of the national income, a drop in the industrial production and productivity. These were facts that even the then Prime Minister Alexei Kosygin had already admitted as early as 1965. In his speech during the Plenum of CC of CPSU (September 1965), he pointed out: “it must be concluded that during the last years there has been a certain decrease in the national Income and the industrial Production…The increase rate of productivity in industry, an additional important index measuring the efficiency of the social production, has been in decline over the last years” (Α.Ν.Kossygin: Die Verbesserung der Leitung der Industrie, die Vervollkommenung der Planung und die Verstaerkung der wirtschaftlichen Stimulierung der Industrieproduktion. In: «Die Presse der Sowjetunion», 1965, Nr.113, S.6).

A note from the Tirana Radio Station, under the title “The soviet economy in the whirlpool of crisis”, mentions about this: “Over the last years, the soviet economy is going through a severe crisis. The decrease in the growth rate of the production and labor productivity in many branches of the economy, the long-term phenomenon of incomplete utilization of the productive capacities, the failures in the capital investments, the tendency of technical progress to slow down, the militarization of the economy, the inflation, etc are facts that clearly demonstrate that the economy situation is constantly deteriorating. All this shows the disastrous consequences on the country’s economy stemming from the counter-revolutionary policy implemented by the dominant revisionist clique. A general feature of the soviet economy is the irregularity in the fulfillment of plans. In many Republics the general industrial plan of the previous year and the first semester of 1975 has not been fulfilled” (“Tirana Radio Station”, 5/11/1975).

To show the catastrophic results of the capitalist restoration and the difference with the period of socialism-communism in the Soviet Union, the author of the Marxist editorial compares parts of the two periods: “to get a more clear picture of the catastrophic consequences of capitalist restoration in the soviet economy, we present a comparison with the period during which there was still socialist economy: the annual growth rate of the industrial production in the years 1966-1970 was 33% lower than in the years 1946-1955, in fact it was 58% lower in 1974” (“Tirana Radio Station”, 5/11/1975).

The international economic crisis, that started at the end of 1973, affected also the economy of the Soviet Union for which the author mentions: “the decrease in production, an important characteristic of the current economic and financial crisis, into which the whole capitalist-revisionist world has plunged, has seriously impinged on many branches of the soviet industry and especially the branch of machine-building, the chemical industry, the manufacturing industry, the light industry and the production of goods of wider consumption” (“Tirana Radio Station”, 5/11/1975).

Militarization of economy. The restoration of capitalism did not transform Soviet Union only into a capitalist country but, also, into an imperialist super-power which competed the other imperialist super-power of that period, the United States of America, for spheres of influence, having made all sorts of interventions in different countries that included the military occupation of Czechoslovakia and Afghanistan. The reactionary, anti-communist and anti-stalinist socialdemocratic leadership of Khrushchev-Brezhnev very soon oriented the development of the capitalist economy of the Soviet Union towards militarization. The militarization of the economy was, and still is, one of the main and fundamental features of economy of the all imperialist countries. A note from the Tirana Radio Station, in 1976, rightly points out: “the militarization is determined by the nature of the soviet social-imperialism which collaborates and competes with the US imperialism for global domination”. And: “in order to implement their hegemonic and expansionist policy, the soviet social-imperialists employ the most incredible methods but, mainly, rely on the power of arms. This led to a full and mass militarization of the Soviet Union. The soviet economy is oriented towards war. According to data published from scientific organizations of various countries, the military spending of the soviet social-imperialists is about 100 billion rubles that constitutes 44% of total spending in the state budget in the current year. More then 60% of all enterprises in the Soviet Union work, today, directly or indirectly for the war” (“Tirana Radio Station”, 20/10/1976).

In relation to the arms trade: “The soviet social-imperialists expanded the arms trade outside their borders. Along with the US imperialists, they have become the greatest arms dealers. Since 1955, when the Soviet Union emerged in the arms market, it has sold to other countries arms worth of some dozens of billion dollars. Only in 1974, it sold arms worth of 5,5 billion dollars and surpassed even USA in selling war aircrafts securing huge profits from trading with such lethal tools. This is because such a plane can bring as much profit as the retail of 1000 private cars. According to some data from various news agencies, until the middle of the previous year, the Soviet Union sold more than 14,500 tanks, more than 8,000 surface-to-air missiles and more than 1,900 Ming-21 aircrafts. All these arms were sold to satellite countries and to some developing countries bringing extremely large profits. In this way, the Soviet Union tries to transfer part of the load of the militarization and the arms race to the back of less powerful countries and other peoples. At the same time, the Soviet Union is supplying arms to many reactionary governments…Moreover, it must be mentioned that the soviet social-imperialists have become the main suppliers of the most important strategic raw materials such as oil, natural gas, enriched uranium, titanium and various others of the imperialist and militarist circles of West Germany, USA, Japan etc (“Tirana Radio Station”, 20/10/1976).

Wages – degree of exploitation of the proletariat – class differentiation. After the overthrow of the Dictatorship of the Proletariat, the victory of the Khrushchevian revisionist counter-revolution, the loss of the political power and the control of the means of production, transformed the working class of the Soviet Union to proletariat, which is forced to sell its labor power in order to survive.

The exploitation of the proletariat through the extraction of surplus value, primarily, in the sphere of production and, secondarily, in the sphere of distribution and through the income redistribution at the level taxes and inflation, is secured, besides the capitalist production relations, by the bourgeois “all people’s” state: “the exploitation and the oppression of workers in the Soviet Union is organized and managed by the state. This is expressed, most and foremost, in the rights of enterprise and kolkhoz directors, in the management and selling of means of production as well as in the corresponding jobs. According to soviet revisionist press acknowledgments, in 5 large cities of the Soviet Union and in two industrial centers of the Republic of Lithuania, there are agencies that sell and buy job vacancies. The revisionist directors decide themselves about the amount of salaries and premiums, the hirings and firings or measures against the workers etc. In Kharkov, an enterprise manager launched 233 discipline measures against 125 workers and imposed money sentences to 350 workers. In 292 soviet enterprises, 70,000 workers were fired because they could not withstand the oppression” (“Tirana Radio Station”, 13/1/1976).

In the Soviet Union, “the degree of exploitation of workers in material production increased by 23% during the 1960-1971 period” (“Tirana Radio Station”, 18/8/1976).

During the Khrushchev-Brezhnev period, the differences between the workers-farmers salaries and those of the new bourgeoisie members were huge: “the capitalist exploitation and oppression of the working class and the wider masses by the new soviet bourgeoisie that is in power is expressed in the income distribution that shows a sharp contrast between working people and the capitalist enterprise directors. While the average wage for a worker reaches 70 rubles and for a farmer reaches 35 rubles, the wage of an enterprise director is about 15 times larges without taking into account other kinds of income they receive in the form of bonuses, privileges and other extras. The director of an enterprise that makes electric lamps in Moscow receives 1,000 rubles as a month salary whereas the wage of a worker is between 60 and 80 rubles… The enterprise directors have the right to determine, according to their wishes, the workers’ wages. Using various pretexts, they push wages downwards or they do not give workers any bonus at all. According to statistics, the 82% of the money sums given to the first 704 enterprises that adopted the new “Schtekino system” of labor rate increase, that is, they introduced the cruel oppression of workers, was shared by the directors, engineers and the technicians and only 12% of these sums was utilized as a “material motive” for the workers. It is, thus, self-evident that the high salaries and the large bonuses of the directors of the soviet capitalist enterprises come from the surplus value created by the workers” (“Tirana Radio Station”, 13/1/1976). “Depending on the position they occupy in the bureaucratic soviet revisionist state and party system, the party cadres, the higher clerks, the technocrats, the enterprise directors and others are getting 10-fold to 25-fold of the average worker’s wage. This is also true for the kolkhozes where the wage differences are about 1:30” (“Tirana Radio Station”, 4/2/1976).

“The new bourgeoisie members have secured high salaries, which are 10-fold to 15-fold larger than the wages of workers and farmers. Hence, the salary of an enterprise director is 1,000 rubles, the salaries of professors, doctors of science and others are as high as 2,000 to 3,000 rubles; all of them lead a luxurious life with cars, villas etc” (“Tirana Radio Station”, 13/2/1976).

While, the living standards of the proletariat and the wider masses were constantly deteriorating not only due to the increased degree of exploitation and the raising prices and taxes, but also due to the under-fulfillment of the plans, the decline in production and the continuous, of unprecedented scale, shortages wide consumption goods (meat, butter, pasta, vegetables, potatoes etc), the new bourgeoisie lived in provoking luxury: “although the necessary commodities for the people are in want, the new bourgeoisie invests large sums for the construction of super deluxe hotels in the Black Sea coast for the rich coming from inside and outside of the country, for the construction of factories that produce Pepsi-Cola and luxury items, super luxury limos and yachts. The production plans for these goods and for the contruction of similar works are always fulfilled on time” (“Tirana Radio Station”, 13/2/1976).

During the Khrushchev-Brezhnev, there was an evident a quick class differentiation in the bourgeois society of the Soviet Union: “the soviet capitalist economy that has been established on the basis of capitalist economic laws and operates according to them, serves as the ground of a continuous class differentiation. The course of class differentiation in the Soviet Union proceeds quickly. On one side, there are all the elements that constitute the new soviet bourgeoisie like the higher cadres of the revisionist party and state, the bureaucratic-military caste, the technocrats and others who receive high salaries and large premiums, and lead a degenerate and luxurious life and on the other side there are the working masses of the town and the countryside. Millions of soviet people, mainly in the countryside, live under the poverty line. In the Soviet Union there are 25,000,000 people that enjoy high living standards, 68,000,000 who live under the poverty line determined by the soviet revisionists themselves. A whole system of taxes introduced by the new soviet bourgeoisie in power, burdens the soviet working people from whom it extracts 11% of their income” (“Tirana Radio Station”, 13/1/1976).

In the 1980’s, the prolonged stagnation of the economy, the obsolete equipment of the capitalist enterprises, the large growth of the black market, the false “fulfillment” of the production plans in industry and agriculture, the systematic legal and illegal appropriation, theft, of the state property, the severe financial bleeding caused by the imperialist war in Afghanistan, etc deepened the all-sided crisis that the capitalist-imperialist Soviet Union was going through and led its capitalist economy to total collapse and bankruptcy.

This catastrophic, dead-end made the new anti-communist group of the bourgeois CPSU headed by the traitor Gorbachev, the “favorite child” of the anti-stalinst, social-democatic Brezhnevite clique, to embark on new capitalist reforms collectively known as “Perestroika” which was not “revolution within the revolution” as claimed by the Krushchevian social-democrats but counter-revolution within the revisionist counter-revolution. The implementation of these new reforms ushered, at the economic level, the transition from the state-monopoly capitalism to the classic capitalism of individual property of the Western capitalist countries and, at the political level, the transition from the bourgeois one-party to the bourgeois many-party system of the Western capitalist countries.

Thus, the Soviet Union, instead of entering “communism” in the 1980’s as promised by the consciously lying anti-communist clique of Khrushchev-Brezhnev – that was demolishing at the same time socialism – experienced, as expected by the revolutionary Marxists, i.e. the Leninists-Stalinists, the total collapse of the restored capitalism, that the same social-democatic leading group had established and demagogically presented, in order to mislead the working class and the peoples, as “real socialism” and reached, its demise as a state at the end of the same decade.