The capitalist reforms in the Soviet Union and the bourgeois theories of “socialism”

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 part with the title In the commodity economy of the Soviet Union, labor power had been anew converted to commodity

At "Unity and Struggle" issue 25 (October 2012) we published the third part with the title The commodity economy of the Soviet Union in the Khrushchev-Brezhnev period: a complete and permanent capitalist economy / The capitalist economy of the Soviet Union in the Khrushchev-Brezhnev period in prolonged stagnation and deep crisis

Here is the fourth part:

The restoration of capitalism in the Soviet Union (1953-1990).

The capitalist reforms in the Soviet Union and the bourgeois theories of “socialism”

The character of capitalist economic reforms in the Soviet Union and the other Eastern countries during the Khrushchev-Brezhnev period (1953-1965) - that completely restored by mid-late 60's, capitalism in these countries - were based on the theories of "socialism" promulgated by the reactionary vulgar bourgeois economists but also on those of the internationally renowned Polish revisionist economist Oskar Lange, the successor of 'socialism' theories of bourgeois economists, as appears from the following very brief reference.

This very short and incomplete note - for such a big issue - is mostly informative in nature (for motivating younger preoccupation with the theme), and is not intended to refute the bourgeois theories of 'socialism'.

In the years immediately after the publication of the "Manifesto of the Communist Party" (1848) by Marx-Engels, the bourgeois economists, who, as we know, regarded the individual capitalist ownership as "natural" and "eternal" economic category, began to fight the dangerous, for the power of the bourgeoisie, revolutionary communist beliefs while simultaneously worked on their own theories of "socialism" according to which “socialism-communism” was essentially identical with capitalism with some of them claiming that socialism-communism could not be allegedly applied and operate "rationally" as an economic and social system. Since then, a host of bourgeois economists* worked on the question of socialism-communism worked.

In the field of various schools of vulgar bourgeois political economy – which, let it be noted, has no scientific knowledge to offer – there were developed and formed two main directions: one which identified socialism with capitalism (this only is of interest here), and another that supported the impossibility of socialism-communism with leading and best-known case the Austrian economist Ludwig von Mises (1919) that caused the subsequent discussions during the decades 1920, 1930 and 1940, to which there will be no reference because is irrelevant to the question of capitalist character reforms in the Soviet Union.

One of the first of these, as early as 1854, was German Hermann Heinrich von Gossen, founder of the subjective theory of marginal utility, who suggested in his work «Entwicklung der Gesetze des menschlichen Verkehrs und der daraus flievenden Regeln fuer menschliches Handeln» (Braunschweig 1854 and 1889, 1927: pp. 228-231) that a central planning of the economy is impossible because "the solution of this task goes far beyond the powers of individual people."

In 1874 there followed the Swiss economist Leon Walras who addressed with his book «Elemente der reinen politischen Oekonomie», among other things, the questions of prices and general economic balance admitting that the latter can be more easily achieved in a system of organized economy, thereby accepting the possibility of application and operation of socialism, a theme which was further developed by his students. In the same year, 1874, the small pamphlet: «Die Quintessenz des Sozialismus» on the subject of socialism was published by Albert Schaeffle.

Later, in 1889, the Austrian Friedrich von Wieser, in his «Der natuerliche Werth» (Wien 1889, pp. 59-66) for the first time expressed the view that the economic categories Price, Interest, rent, etc., are common to both to capitalism and socialism-communism, thus effectively equating the two diametrically opposed ways of production. It is no coincidence - and it should be particularly emphasized - that Wieser’s view was openly applauded and accepted by the Soviet revisionist economists as correct, including SR Kirillov: "Wieser rightly pointed out that such categories as Price, Interest, Rent, etc., may be present in the socialist economy" (Moscow 1974).

A student of L. Walras, the Italian economist Vilfredo Pareto, was the one who contributed significantly to the development of bourgeois theory of"socialism", based on the views of his teacher and Friedrich von Wieser. Pareto was a known and avowed enemy of socialism and in his «Cours d 'economie politique, 2. BD., Pp. 363-364, Lausanne-Paris 1897), after noting that "inequality of income distribution ... is much more dependent on the nature of people despite the economic organization of society" (p. 363), he says, referring to socialism, that "economic goods are distributed according to the rules, found when we investigated a free competition system " (p. 364) i.e. the capitalist system.

Subsequently, there came the great contribution to the development of the bourgeois theory of "socialism" from Italian Enrico Barone in his work «Il ministro della produzione nello stato collectivista» («Giornale degli economisti», September-October 1908), who adopted and developed further the views of Pareto, writing: "... it is obvious, how unreal are those teachings, creating the impression that the production in a collectivist regime could effectively be managed differently than in "anarchic production" echoing Friedrich von Wieser for the necessity of economic categories of capitalism in "socialism": "... all economic categories of the old regime must still occur, though perhaps with other names: Prices, wages, interest, Ground-Rent, profit, savings, etc. " (p. 289, English 1935, p. 297 French).

Finally, Enrico Barone, in agreement with Walras, but mainly with Wieser-Pareto and others, argued: "... that it is not impossible to solve the equations of Equilibrium on paper. It would be a huge, gigantic task (a task that should be removed from the productive agencies), but not impossible" (p. 287, English 1935).

Concerning Wieser-Pareto-Barone and for the sake of some completion of the above, it is worth noting the correct opinion of the Austrian economist Josef A. Schumpeter according to which «Wieser, Pareto and Barone, not due to any sympathy towards socialism, created what basically constitutes the pure theory of socialist economy» (Josef A. Schumpeter: «Geschichte der oekonomischen Analyse», 2. Halbband, p. 1083-1084 and p. 1190, Goettingen 1965), i.e. the bourgeois theory of "socialist economy".

In 1919, two years after the October proletarian revolution, the Austrian economist, anti-marxist and avowed enemy of socialism-communism, Ludwig von Mises wrote his famous article of «Die Wirtschaftsrechnung im sozialistischen Gemeinwesen» published in April 1920 («Archiv fuer Sozialwissenschaft und Sozialpolitik », Bd. 47, No. 1, April 1920), which supported the view that "without prices there is economic calculation" and that "socialism is tantamount to the end (the elimination) of the rational economy" (p. 104) and, thus, because there is no economic calculation, socialism is unfeasible - a view that has no scientific basis and that was refuted by the existence and construction of socialism in the Soviet Union of Lenin and Stalin (1917-1953) but which also caused the notorious long international debates during the decades of 1920-1930-1940 that still continue today and in which dozens of economists participated, including the Polish Oskar Lange**. Mises's view concludes with the preposterous claim: socialism can not exist and act rationally because it is not capitalism.

Oskar Lange answered to Mises with the famous article «On the Economic Theory of Socialism» (in: «Review of Economic Studies, Bd. IV, No 1 and 2, Ochtovris 1936 and February 1937, German: «Zur oekonomischen Theorie des Sozialismus» in: O. Lange:« Oekonomisch-theoretische Studien », Frankfurt am Main-Koeln 1977, greek: Oskar Lange-Fred Taylor:« the economic theory of socialism», Athens 1976).

The answer given by Oskar Lange to Mises is based on the bourgeois views of "socialism" of Walras-Pareto-Barone – something that himself did not hide in the above-mentioned work and also, 30 years later, in his last short article Electronic computer and market "(1965) (in: O.Lange: «Financial planning and political relations», pp. 76-77, Athens, 1974) - written from social democratic perspective i.e. that of «Konkurrenzsozialismus» and has as a starting point the bourgeois subjective theory of marginal utility. And is precisely on this basis that he points out in his work: "the definition of equilibrium prices in a socialist economy is entirely analogous to that of a competitive market" (p. 91), and elsewhere, " the Central Council for Planning has to set such a price for the capital and natural resources so that resources are directed to areas that can "pay" ... " (p. 88).

It is obvious, therefore, that the mechanisms operating in capitalism and socialism are considered identical, or more precisely: the same common mechanism operating in both economic systems.

It is known that O. Lange was the principal founder of the theory of so-called «Konkurrenzsozialismus» (= «competitive socialism") or later «Marktsozialismus» (= «market socialism»), i.e. a bourgeois conception of "socialism" with the known connection "Plan- Market ", or more precisely: the replacement of the Plan from the capitalist market.

Bourgeois and revisionist economists admit that the economic reforms implemented in the Soviet Union and other Eastern countries rely on the opinions of Oskar Lange. The Soviet N.P. Fedorenko writes: "The theory and practice showed that the optimal operation mechanism of the socialist economy involves an organic combination of the central state Plan and the business financial independence of the production units in socialist society and that a planned socialist economy involves inherently the use of Value relations and Value categories" (NP Fedorenko: «Problemi obtimalnowo funkzionyirowanyija sozialistscheskoj ekonomiki», pp. 565, Moscow 1972). The Hungarian Csikos-Nagy correctly points out the connection of Fedorenko's bourgeois views with those of Enrico Barone: «…thus, the scientific facts lead back to the line, that E. Barone had already described in the early 20th century. Barone was the first who dealt with questions concerning the rational operation of the socialist economy. Barone considered this possible based on the general equilibrium theory of Walras» (Bela Csikos-Nagy: «Sozialistische Marktwirtschaft», page 45, Wien 1988). However, in this case, it is not about "scientific knowledge" but, instead, the connection of the anti-marxist views on socialism of the Khrushchevian Fedorenko with those of the bourgeois economist Enrico Barone. And elsewhere: "Mr O. Lange was one of the first who tried to link socialist planning with the market operation and stressed the importance of price equilibrium with the objective of efficient allocation of resources in socialist production. His greatest contribution consists in placing at the centre issues related to the structure of production taking into account the existence of products replacement in the sphere of production and consumption. He emphasized the role of prices ​​in creating financial solutions" (p. 47).

Regarding Fedorenko’s anti-marxist assertion that "theory and practice verified" supposedly the correctness of the Khrushchevian bourgeois views on the question of building socialism-communism, this was completely refuted by the subsequent restoration of capitalism in the Soviet Union. What actually happened was that the traitors Khrushchevian revisionists abandoned Marxist views, adopting at theoretical level, and putting into practice the views of vulgar bourgeois political economy in order to achieve the gradual restoration of capitalism in the Soviet Union, about which nobody doubts today.

Finally, Polish Adam Zwass is right to extol Oskar Lange as great reformer in the revisionist countries: "the basic ideas of the democratic reform movement were expressed most clearly by the great thinker and reformer Oskar Lange" (A.Zwass: «Planwirtschafr im Wandel der Zeit» , pp. 386, Wien 1982).

From the newer cases of bourgeois economists we mention only Joseph E. Stiglitz. Referring to the reforms in the Soviet Union and other countries writes: "Many of the reforms were based on the idea of socialist market economy, which meant to combine the advantages of market mechanisms with the ownership of the means of production by the state. Oskar Lange, who was a professor of economy at the University of Chicago before returning after the 2nd World War to Poland and becoming vice president of the communist government, was a leading figure and representative of this direction. In socialist market economy, the Prices have the same function in the distribution of resources, as in capitalism. The prices must be determined so as to match supply with demand. Firms accept the prices and compete with each other. They maximize their profits at given prices, by producing (Output) at a price that meets the marginal cost" (Joseph E. Stiglitz: «Volkswirtschaftslehre », pp. 1099, Muenchen, Wien, Oldenburg 1999).

From this very brief and incomplete reference, it becomes obvious that, in their reforms, the Khrushchevian revisionists adopted both the capitalist market-price mechanism and the capitalist economic categories, that is, the well-known theories of bourgeois economists of "socialism".