Ken Varbuck The invasion of Czechoslovakia in August of 1968 by Soviet (and allied) troops brought forth a spate of slogans such as ‘Russian Tinperialism', and in general brought once more into question the nature of transitional societies. However, il is not only the invasion itself that raises this question, but also the events that led up tu it. The undoubted upsurge that occurred in Czechoslovakia was to some extent or other communicated to most other East European countries. Moreover, the fact that there was undoubtedly a process of ‘liberalisation’ being unfolded, both politically and economically, indicates that simplistic and naive explanations will not suffice. Be that as it may, it certainly remains true that here in Britain there is a large body of opinion - maanly in the IS group - that holds to the theory that the Soviet Union and the other transitional societies ure a form of state capitalism. One of the best known proponents of this theory is Tony Cliff. His book, "Russia - A Marxist Analysis", has been published in three different versions, the first one as an internal bulletin of the R.C.P. in 1947, the third in a revised and enlarged edition in 1964. To this extent his theories have played some part 3 shaping the ideas and attitudes of many socialists, therefore these theories must be accorded the importance they undoubtedly have.
Given the fact that | have had to deal with a book of nearly four hundred paves, it is clear that I have net been able to deal with every point raised. In this essay T have confined mysell to dealing with only certain aspects and problems, those that TI feel are relevant to ap appreciation of Marxist political economy.
I
A great deal of one's understanding of the nature of a transitional economy depends toa Lirge extent on one's knowledge of what is new and whai remains from the previous capitalist economy. Because of this the question of the operation (or otherwise) of the Low of value becomes of key importance,
Preobrazhensky says that "the law of value is the law of spontaneous equilibrium of commodity-capitalist society” (1). However, it is necessary to emphasize - as he does - that this Jaw is not an expression of the relalionship between things, material objects, but rather a relationship between people. Whilst the law of value determines the relationship of prices for various commodities, it must never be forgotten that behind the various catagories - value, price, surplus value, etc. - are people whose social relationships are veiled and mystified by the intervention of these categories.
The law of value has as its foundation the labour theory of value. Briefly stated, this postulates that the exchange value ofa commodity is determined by the average amount of socially necessary labour required to produce it. Hach commodity has two types of value, use value which is determined by its ulilily - real or imaginary -, this being a precondition for its arrival on the market: and exchange value which expresses the average amount of socially necessary labour. Mxchange value, or value, is therefore abstract labour in the sense that all commodities have il although they have been created by differing specific kinds of labour.
Let us look at this question of socially necessary labour a little more closely. Those who assume that socially necessary labour time is merely contingent upon technoloxy and its applicaution are guilly of a vulgarisation of the Marxist hibour theory of value (2). It is certainly true that the given state of technology plays some no small part in determining the amount of labour necessary to produce a commodity. However, it is contingent on more than this. Both the state of cluss forces, and the general class characier of the society, along with the state of demand enter into the determination of what is socially necessary.
Baran and Sweezy show that in the U.S. automobile industry it has been estimated that the cost of model changes which add nothing to the auto's ulility averaged around 25 per cent of the purchase price in the period 1956-60. Furthermore, they estimated that auto model changes were costing around 2.5 per cent of the Gross National Product of the U.S.A. in the same period (3). This is very interesting when one compares the British detergent industries sales costs, these also work out at 25 per cent of the purchase price. The point here is that in both instances the extra labour o.nbodied in such sales efforts or model changes was ‘socially’ necessary from the point of view of monopoly capitalist society. © From the point of view of a rationally planned sociely much labour today is totally unproductive, e.g. Polaris submarines, but not from
the point of view of the capitalist who makes a profit out of such products. *
Similarly, the state of demand, i.e. market forces, also comes into play here. Whilst it may take X number of hours to produce an aulomobile, and with the given slate of technology etc., these X number of hours are the average socially necessary number required; if the market is unable to absorb all the auto's produced it means that the total amount of labour time invested in auto production has been too much, and there will have to be adjustments made accordingly. In the case of a competilive market the price for the auto's will have to be reduced so that they may be selling below their individual value.
Theretore, it is necessary to take into account more than technological factors in the labour theory of value. What is socially necessary is itself socially determined, and to forget ihis is to fall into cn economic determinist vulgarisation.
li
Well, how does the matter stand with Cliff? His introduction to this question is unexceptionable, if rather timid, since he uses his favourite method of doling oul large quotalions from the originator of the theory. However, as soon as he comes to apply the method he begins to demonstrate his unsureness, Cliff introduces the subject in his chapter on "The Economy of a Workers' State" with these words -
"Now, the law of value holds absolute sway only under
conditions of free competition, i.e. when there is free
movement of capital, commodities and labour power.
Therclfore, even the most elementary forms of monopo-
listic organisation already negate the law of value loa
certain extent. Thus when the state regulates the
allocation of capital and Libour power, the price of com-
modilies elc., it is inost certainly a partial negation of
caupitalism...." (4). ~
* One of the problems associated with Baran and Sweezy's use of the concept of surplus is that it blurs the distinction between productive and unproductive labour in the sense thal Mars used it. Murx used the term productive labour to denote thal which produced surplus value: unproductive labour may be necessary, e.g. doctors, but does not produce surplus value. Unpreductive labour, therefore, is paid out of surplus value. However, much unproductive labour under capitalism is not necessary from the point ol view of a rational society,
10
To chlnuech the point Cliff brings in a quotation from Lenin -
“When capitalists work for defence, i.e. for the
government treasury, it is obviously no more ‘'pure'
capitalism, but a special form of national economy.
Pure capitalism means commodity production. Com-
modity production means work for an unknown market
2 (5),
The first point that has to be made here is on Cliff's use of the term free competition, one can only assume that he means perfecl competition, i.e, a Static equilibrium medel. In this he betrays his faulty understanding, for the law of value operates without these conditions obtaining. Cliff, here is making the mistake of confusing prices and values, and the fact that under certain condilions prices deviate from values (in fact it is more normal for them todo so). But this is not to say that the law of value is nol operating. Price is a measure of value, not its determinant. Marx explains this in numerous passages in his own works, but one example will suffice -
"If demand and supply balance one another, they cease
to explain anything, they do not affect market-values, and
therefore leave us even more in the dark than before
concerning the reasons for the expression of market-
values in just a certain sum of money and no other. ''(6) Marx was pointing oul that one must look further than the equilibrium of supply and demand to explain value, and that the operation of the law of value was not dependent upon perfect competition holding sway.
Clift commits another error, an apparently semantic one but nevertheless important in constructing his case, when he talks about the "partial negation" of the law of value. How can ihere be a partial negation’? Nevation of something means its toial opposite is achieved. The reason for this slip is evident when he goes on to talk about the “partial negation" of the law of value being a “partial negation of capitalism. The conditions which Cliff describes are modifications of capitalism, but the totality remains capitalist. — > what are the parts that have been “partially negated"? = Are they some sort of indeterminate sucial order as yet unknown tous? The introduction of monopoly certainly modifies capitalism, but it remains capitalist. Cliff was also unfortunate in his quotation from Lenin, LU one reads it with a modicum of care one can see that Lenin did not speak about capitalism being negated, partially or otherwise, nor does he speak about the law of value being ‘negated’, he only speaks about capitalism being “no more pure’, i.e. it is adulterated or modified, His reference toa form of national economy must be read in this light.
Now, the point I wish to establish bere is that apparently harmless semantic foibles can become the basis of quite erroneous conclusions, becuuse they lead to vague and contused thinking, as T shall try to establish fate: on in relation 5 the operation of the law of value in the Soviet cconemy. More. over, one Should also be very careful when on quotes Shei any source that such quotations doin fact bear out (We arsunent, also the quotation from Lenin only asserts the proposition, + does not establish it. Phis is not prool, ior Clift eis merets hiding behind authority,
Hi
However, let us return to the question uf monopoly, since an understanding of it will assist in coming to grips with the main question, Now 1i is quite true that insofar as the monopolist has control of lis market, the price charged for fis ,oods can be determined subjectively to a considerable extent. but, there is a strict limil as to how lar prices can be varied. Even taking the extreme (and iighly theoretical) case of a complete monopoly for one commodity, Wie monopohst wilh not be able to control all consumer expenditure, he must compeie for his share of the avgregate demand. ‘Therefore to this extent he is subject to competition. Moreover, since the hiw of value is expressed in exchange (uot Competition as Cliff asserts) the monopolist is subject to it. Certainly the monopolist can accrue a larger share of surplus value proportionate to his capital than he would under conditions of perfect competition, but this will be at the expense of the non-monopolised sectors of the economy. Very often this surplus profil of the monopolist is garnered because of the productivity
differential, which is brought about by econonics of scale, of innovation, and new products.
Cliff moves towards his theory of state capitalism via his ideas on monopoly, and as usual backs himself up by serving up some quotations, (his time from Hilferding, thus -
>. When the monopolist asseciuuions woulish coimpetition, they remove with this the only means by which an objective price law cun be realised. Price ceases to be an amount determined objectively, ahd becomes a
problem of calculation for those who detcpusdaed it with will and consciousness; insiead on a renal i becumes an assumplion, instead of bein. iieeiive | Subjecse.., The realisation of the Marxist theory or vonseniration monopolistic merger - Seems co lead to the pivdic |
of the Marxian theary of value. fe
Suibsoes
whys pilfess
hte dase thea regulating funetion and become
ao.taius of distribution, The economy, and with
as of Ccononide ucuivity, are more or less
vd du he state, heeomine its sub- ordinale. " (8)
ct ‘ writs ein, he ws clearly in the wrong ya ois trae taanopoly suppresses competition
wa Horces sa only fo fina it breaking out
See y at another devel. Morcover, we can no Spiro or cattle Giiy vOut miolopoly suppressmye Com-
a OE bles perks Speak about the periodic sup-
titioae. Phe: are dew, if .iy, complete
vitiby.
we doce a auimber of olepolies. 1.c. two
bab dsee roluqmiies in ihe Mirsist usage of the
Vii bais iallotmilimarkets. Far from stopping
f= vte fora biever share of the given
ayy) Carlier none of these monopolies
jot denned, Since even the hirgest
vortd only constitute a small percentage of
we heidi
seuss dge
wehbe tt
Pespprtive puttonad Ceoromies (9) Furthermore,
eetge secegs © be falling into the error of confusing the
Ponttie and ifs meusure, i.e. price is the measure,
asary tabour is the determinant. ‘To use
: rio measure a length of wood, but the Saesces fetermine the amount to be divided. There-
cay thal under monopoly prices lose their
nee
hfjiy fanetions beds standing the process on its head.
cub oniy determine his prices subjectively perven corse of vartibles, bevond these limits he is Hyeorainreaecket determined factors which are object-
Roar his toes corininiy trie that siven a certain level eta Jeree fron: vatue lor individual commodipal Heperere sean: te be determined subjectively, but
poceroes cree nievels distortions of value. The more pou ine y weet ou The economy diverges from value in ao wh Secgrdds aire tion. the more prices will diverge vive dha deasiwards direciiou in the competitive sectors
noi {1 os inipossible to extract more surplus ie Lie ecomuniy than is created within it,
colds. oo. thou ti:trerdipe and Cliff, both make the same
moetincine that the law of value is expressed in ‘ J omeitope that the competitive - or tree trade -
hoya ts short episode in the history of capitalism. ’ ; toons - ot a ameh hicher level - to many of
foes cst a lefiancy.
Bootes ets Gites ogl seeehanism of a
methodology is revealed. This methodology is undithects being a form of formal logic, one that admits to no unity of opposites or contradictory totalities. He says -
"Stale capitalism and a workers state ares two stares un the transitional period from capitalise: bata
capitalism is the extreme opposite te sorntt
diametrically opposed, and they sre det:
with one another." (10)
Shive
hope This passage contuses stages, which by their nature are intermediaries, and phenomena that are oppor ies, vad expuses the linear concepts underlying such thinking, Mercayer, ai confuses form and content. A workers’ State is a syntnes ts of previous contradictions, because a Wwerkers” Stile etolishes state capitalism, (i.e. those property Faris whtet abe stale owned bul subordinated io the vec:
along with the expropriation of the tow cent Pie corral and judicial forms have deceived Clik. Moi. ee : : state capitalism and a workers’ state are wo suisse ui. ti
Voth el sy
transition to socialism he shows clearly that bes dis econo: mic determinist not a historical miatertilist. faconea at orata Cliff's point of view, capitalism is Toriy’ cr scar iets
feudalism and socialism! ‘To talk of stages is :
betrays a fatalistic view of history, of leevitabaltty ia very crude form.
Moreover, if state capitalism is a Stige Gowards so sii how does he account for Tasmark’s natiotetisa: ban the German railways in the nineteenth century ar Sats onts nationalisation of steel? To play aramuid wilh pits by srk ys state capitalism and sociavlisin are Udbiae rie dll. opposed and they are dialectically united” is ta pe rhe nesses eat a lectics. That they are dignietricaits mp osiab Se ns
state capitalism fin the sense used space pushes th ue ist relationships to their extreme, Pre vaticpatli tian.
pees cere tot Gaepedy ore ts : ok take place under a capitalist re
the bourgevisie's rule, rather i i
Politically under a social-demiocrates avercus
served lo impart illusions aniong fhe workrre class
ally they have enabled unprofitable industries fo fa tahoe: and put in order to serve the monopolies Pie natioriet’ of a workers' state may only Seem fo push these totic:
i eden betocspocs but their content is of a completely di'fer
st peat
ey
the nature of the state that undertakses eon Ypres of a changed relationship of chissss boas 4
the bourgeoisie is expropriated, Us bande pie wrt! the levers of power. | Far from beta a stage oi teres « i.e. one that has direet and palpoble Tabs nits sty
before, il represents a sharp break. wu dostesteut bs,
dialectical unily.
This misunderstanding explains why for Cliff, and his rollowers, the nationalisations in Cuba, and, for example, in Egypt, seem to be of ihe same character. In both cases they arose oul of a strugele with imperialism, yet the outcome expresses a very different relationship of class forces within the respective countries,
CEP pantinaes
"oo. ina workers' state, wage labour ceases to bea
conmmodity. The ‘sale’ of labour power is different
from the sale of labour power under capitalism, because under a workers’ state the workers as individuals do not sell their Jabour power but put it at their own service in the role of a collective” Ub.
It is here that Cliff displays his inability to grasp the transitional nature of a workers’ state. Value and material wealth are wnciwonisiie beeasse, all other things being equal, an increase in productivity will lead to a decline in the value of the commodity produced. This is because ihe average socially necessary labour resered falls tos each unif of production, Phos ontaesore sts at Pousp toed) society also vests upon the fact that so long as Ueere get struaite between the need to raise productivity “hecause af tae rehiter shortaee of conmodities) and the needs of the tothe } sorkers, (here will have to be some means of measure what each individual contributes Lo, and receives from. fhe: pen pool of secial wealth, Only wea society of materi nee will if be unnecessary to ration what each indivetcai trikes from this cummon pool, and also use this rationing as a coercion to motivate labour. Work ipsecha society of cia saat sbanderee will have ceased to be taboo
rita be individual worker's
: vetion is nearer to posilowm cin yedaiiog ft!
vaapihal SE besser capes Sts ae a" expression of the bra pauire of the fo cro Meo ise there is a divergence beiween the workers role vo or werker and his role as member
‘Sese two roles converged, his
xpressed his subordination
regime he remains subordi-
but notas a member of the ot ihe cf
role as;
Pdransitional regime a Worker does i wer tothe collective, and it iS Sophistry cosay chet tues out of at "their own service”. There is stiana sch ovo eon sindities, i.e. labour power for Consumption sees aot is still regulated on the basis of Tois:
the law of value, i.e. average socially necessary labour. (Forthe sake of simplicity I ignore the question of social wages here). To use an analogy, do not trade union officials sell their labour power to their union, i.e. to the collective? Do not workers in a co-operative sell their labour power’? How can any worker put his labour power at the service of the collective except by selling it for a quantifiable number of commodities. Until there is general abundance of goods value will determine distribution. OS
Cliff's confusion arises because he fails to distinguish between the collective ownership of the means of production and the private ownership of labour power. Labour power is a unique commodity in this respect, it can only be privately owned, because it cannot be seperated from the worker who supplies it. Cliff further betrays his confusion when he says that ina workers' state labour power will cease to be a commodity but immediately follows this by saying the sale of labour power is different from under capitalism. If labour power is no longer a commodity it is no longer labour power. When the power to labour ceases to be sold, the labour expended in production ceases to be labour mediated and alienated, it becomes work by which means men identify themselves as human beings, it becomes a spontaneous activity without coercion. But ina transitional society this coercion still exists for the individual worker, he must still sell his labour power, not his labour and Cliff confuses these two categories.
During the transitional period it is in the consumption goods sector (wage goods) that commodities remain in circulation longest after the overthrow of capitalism. This is because of the private ownership of labour power, and because it is
impossible tor even the most efficient planning authority to plan consumption to the nth degree. To abolish market
relationships in this sphere it would be necessary either to impose iron rigid rationing (which in practice would break down) or to achieve abundance.
For Cliff the economy of a workers' state remains a closed book, he is unable to comprehend its transilional nature. His criteria for labour is essentially one that can only apply under socialism, a society of material abundance. In such a society it will be inappropriate to speak about labour power, because this along with all other commodilies will have been replaced by use values,
Vv
When Cliff searches for the law of value within the Soviet Union he is unable to find il. But he is left with a problem - ‘if this is a form of capitalism, the law of value musl operate,
therefore where does it arise?' Quite correctly he rejects its operation within Department 1, the capital goods sector of the economy, Since the state only uses prices here as an accounting device, there being no market for such goods inside the Soviet Union. Goods in this sector are allocated in a fairly precise way as to their use, therefore the prices 'charged' for them are an accounting device. Yet these prices are not, and cannot be, arbitrary (as Stalin found out), they must have some objective determinant of value. This determinant arises from the buying of labour power, this enables prices of production to be formed. Cliff rejects this conception, and also the operation of the law of value in the wage goods sector of the economy, he says -
"Hence if one examines the relations within the Russian economy, one is bound to conclude that the source of the law of value, as the motor and regulator of production, is not to be found init. In essence, the laws prevailing
between the enterprise and the labourers and the employerstate would be no different if Russia were one big factory managed directly from one centre, and if all labourers received the goods they consumed directly in kind," (12) There is a confusion here between the technical division of labour and the social division of labour that obtains in any capitalist factory - be it large or small. There is an important difference between the two types of division, one is dependent upon technology, the other upon the relationship of classes. For the working class under capitalism this difference is expressed by its condition of propertylessness, i.e. it does not own the means of production. This division is the fundamental one, not as Cliff implies the technical one.
There is also the astonishing claim that a social system can operate while one of its most fundamental laws of motion is excluded, One can only admire the audacity of such a claim, But, whatever else this society is, it cannot be capitalist without this law working internally.
How does Cliff resolve this? Since foreign trade is such a small proportion of the economic activity he is unable to use even this as a means of inserting the law of value into the Soviet economy. Therefore he comes up with the most bizarre idea - that of arms competition, that is that the arms race is the instrument of the law of value being inserted into the Soviet economy. *
"Hence the commerical struggle has so far been of less importance than the military. Because international
competition takes mainly a military form, the law of
value expresses itself in its opposite, viz., a striving
after use values." (13)
"The state does not offer another commodity in exchange
for armaments. It pays for them out of taxes and loans
levied on the whole economy. In other words, the burden
of armaments is spread more or less over the whole
economy.... use values have become the aim of capitalist
production." (14)
"The law of value is thus seen to be the arbiter of the
Russian economic structure as it is seen in this historical
situation of today - the anarchic world market." (15) Error and confusion abound here. In the second quotation Cliff has made a detour into looking at capitalist arms production, and this should be kept in mind when reading what follows.
Firstly, the law of value is expressed through exchange, recall the two types of value a commodity must have - use value and exchange value. Use value is the particular form which * Mike Kidron in International Socialism no. 32 attempts to get around this embarrassing solution put forward by Cliff by suggesting that the law of value exerts itself on the Soviet Union through foreign trade. But he is either very misinformed or is displaying studied ignorance when he tries todo this. He argues that the Soviet Union is dependent on the world market for certain essentials and thus subject to the law of value. But the percentage of the national income of the Soviet Union accounted for by foreign trade was only 3.9 per cent in 1964, and there seems to be little evidence that this has changed in the last few years. In 1940 the figure was a low as 0.7 per cent, so that there has hardly been a dramatic increase. From 1950 to 1964 the proportion of imports to national income increased by an annual average of less than 0.1 per cent. Some dependence! But this does not tell the whole story. Trade with the advanced capitalist countries was still only 19 per cent of the total foreign trade in 1963, and over a considerable period has remained constant at 0.7 per cent. Kidron argues that the Soviet Union is dependent upon the world market for certain “techniques, equipment, material..."', yet conveniently forgets that for many years there has been an embargo on so-called strategic goods which could be sold to the Soviet Union by the Capitalist powers. One can appreciate his unwillingness to be saddled with Cliff's 'solution', but this really will not do either.
an exchange value clothes itself in when it appears on the market, i.e. it must have some ulility for the buyer, and none for the seller. The exchange value is an expression of the average socially necessary labour embodied within the particular commodity.
This exchange value is abstract or generalised labour. The only method we have of determining the relative exchange values of commodities is by exchanging them. For such an exchange to lake place competition between buyers or sellers or both may be taking place, but it is not a vital part of the acti, Cliff by substituting the word competition for exchange thinks he has resolved the dilemma, one of his own making, But if we were to take his criteria seriously we should end up by seeing the law of value expressed via competition at the Olympic Games! From being a scientific and objective tool of analysis, Cliff has reduced the law of value to the lowest subjeclivism that borders on the mystical. To bring the subject back to the level of reality, one has only to point out that any workers' state in a situation where there is a threat of attack would need to produce arms. Would Cliff deny this need, in case they succumbed to the law of value? By trying to place the loci for the expression of the law of value outside of the economy of a transitional regime Cliff (and Kidron) by implication - following his logic - denies the possibility of any sort of workers' state being created on a stable basis so long as one capitalist country remains inexistence, On Cliff's reasuning, just so long as any workers' state produced arms for defence it would be dominated by the law of value, and would in fact be a state capitalist regime.
Secondly, to argue that capitalism has replaced the profit motive with the aim of producing use values is also a flight of the imagination. It is true that the buyer in any exchange will be searching for a use value, a utility, but in any capitalist exchange the seller will be seeking to realise surplus value, i.e. to make a profit. The state, when it buys arms, is in its capacity of buyer, seeking such a utilily, but are we to believe that the sellers are only interested supplying these utilities? Is there not a profit to be made on such transactions? Ferranti? Moreover, the arms manufacturer is a buyer of labour power, and will seek to realise the surplus value extracted. Of course the economy as a whole pays for such arms, but who profits, and who makes up the majority of the teconomy' when it comes to paying taxes? Cliff,
makes (he error in this instance of seeing production as
being delermined by the market, by demand, forgetting that this inverts the Marxist method of viewing the position,
i.e. demand is determined by production and investment.
Now, is the law of value the arbiter of the Soviet economy as Cliff asserts? The answer must be an emphatic no. If the law of value had been the arbiter it is certain that the Soviet economy would not have progressed as far as it has done so up tonow. To say that il was controlled by the law of value is to suggest that the market determined the order of priorities and the allocation of resources. There is no market in that economy in Department 1 (means of production), since the state produces, allocates and utilises the goods directly. All this is planned before production, and not adjusted after the event by the market. Tf the law of value was the arbiter it would have meant that capital * would have flowed into the most profitable sectors of the economy, which given the level of productive forces al the beginning of the five year plans, would have been the consumer goods industries, agriculture, and a general dependence on imports for industrial goods. This is not to say that the law of value can be ignored or forgotten, it cannoli. In a transitional society seeking the optimum growth rate the law of value has to be broken, but in a conscious way, by the use of very careful accounting so that the working class is very much aware of the transfer of value from one sector of the economy to another. Of course the law of value exerts its pressures in any society that has not yet reached the stage of material abundance and still seeks to raise labour productivity. The most efficient weapons a workers’ state has in the conscious manipulation of the law of value are planning and its monopoly of foreign trade.
Suppose that a workers' state needed to import certain machines, with which to start a new industry, from capitalist countries. For this it would need to have foreign currencies, therefore it would have to exporl goods to earn these. (Iam ignoring the use of gold, but the same scheme would apply). Now, assuming that the goods, that it had available for export were such that it cost more lo produce them than they would earn on the world market, such goods would have to be subsidised. This would mean that they would have.to be sold below their value, but at world prices. This would be an indication that the productivity differential was markedly in favour of the advanced capitalist countries. However, for * Cliff does not seem to grasp the difference between capital and means of production. The two are nol necessarily synonymous. Capital is that quantily of value put into circulation to gather surplus value for privale appropriation, In this sense means of production in a workers' state does not constitute capital.
such goods to be exported at a subsidised price would mean that other pvoods within the workers' state cconomy would have to carry an extra burden of taxation to enable such a transfer lo take place. Unless the state had a monopoly of foreign trade it.is likely that cheap imports would come into the country and undercat the home produced goods bearing the extra taxation. Tt is by ifs monopoly of foreign trade and planning techniques that a transitional economy can manipulate the law of value. Internally this manipulation is
earried out by the planning process, by the direction of mveslinent info means of produetion which would have a low profitability but a high social priority. Therefore, although the flaw of value would exert its pressure, it would not be the arbiter, In a transitional society conscious planning and the Taw of value struggle for supremacy. Tf the society is to move towards socialism the market must be subordinated, but it cannot be eliminated until there is veneral material abundance, Clift signally fails to understand this process and its applieation fo the Soviet Union, Far from being regulated by the law of value if was only by ifs manipulating it was able to overcome the historic backwardness that duminated pre-1l9!17 Russia, The fact that this was done at great human cost should not blind us to this tact. Cliff sees that capitalism in its early life subjected the working class to brutal exploitation and equates the sacrifices imposed on the Soviet working class with this process. Had he understood the process of the industrial revolution here in Britain and then compared it with Soviet industrialisation he would have realised that the paitern of development was very different, This difference cannot be explained by the difference in time, it basically devolves on the social patterns imposed by different classes historically.
Vi
Cliff spends twenty-nine pages of his book discussing the “Law of Value and Crisis’. In the process he takes us on a conducted tour of some of the literature of the subject. We are given Snippets of Bukharin and Tugan-Baronovsky, and given an outline of the stagnation and expansionist theses for overcoming crisis. (Uncidentally it is clear that Cliff is very inuch influenced by the idea that crisis = slump a la 1929), At each step we feel that perhaps we are getting nearer to Chit's own theory of crisis in relation to the Soviet economy, bul alas this is not to be the cause, After twenty-nine pages of exposition he prefers to duck the issue so -
“Given the world situation today, it appears that the war economy ‘Solution’ is the oniv expedient of the Russian
bureaucracy until such time as either socialism or bar-
barism will render a 'solution' to the contradictions
inherent in capilalism - orthodox or stale-superfluous. " How anyone who chooses to describe a society as ‘capitalist’ can beg such a fundamental question is, to say the least, difficult to understand. How anyone who clinns to pul forward a coherent theory can duck vul on this and sil bis ohoia: ta credibility is also difficult to understand. Not once does Cliff attempt to suggest in what form the 'crisis' will lake in the Soviet Union. By any of the normal Marxist criteri., anemployment, cyclical fluctuations, declining rate of profit, surplus capital, export of capital, the Soviel Union cannol be described as capitalist. After twenty years or so of the theory of state capitalism one would expect that the author could draw some - even tentalive - conclusions. But this is not the case. Instead of an attempt to grapple with the preblem, itis shrugeed off by saying that history will solve this problems. cnc theory. Clitt's whole theory, so impressive ai first sight, is on closer examination seen to be a set of eclectic ideas vummed together with yards of quotations. At heart this failure is one of a lack of understanding of dialectics, the dialectics at transitional societies. He is unable to view matters in anything but a black or white, formal logical view. Trotsky once remarked that Marxist theory without dialectics was like a clock without a spring, never was it more apt than in this case, Cliff's 'clock' has shown the saie time tor the last twenty years vr more, i bears all the marks of the times of its birth. That was a time of retreat and isolation for revolutionary Marxisis. The conununist tiovement was, in the larve majority, still in the icy grip of Siaueisra, and imperialism seemed to be all - powerful. it was little wonder that the times produced such theories of despair. For iiake no mistake about it, this particular theory 1s fundamentalls one of despair. Each victory tor the international revolution has been seen aS a victory for - slate Capilaiisin! 50 preoccupied with victories for te ‘burcaucracy’, that the defeats of imperialism seemed to have been lail-torgotten .
When Cliff first put forward his theory 1 o.a5 seen as an exceptional situation, the backwardness wie isolation of the Soviet Union were the main factors in the deselopmient ol ‘state capilalism'’, Yet stuee that Ume we tave had the Chinese revolution, Cuba, Voethanmi. oiiy ta fined iinet tae exception has become the 1 ile accords to Cliti, ik itist bea very gloomy world tookuwig oufoof bis veuduw.
Appendix
On the Use of Statistics
One of the first things that strikes anyone who delves into Cliff's book is the large amount of factual material gathered there, One is presented with page after page of 'hard faced facts', who march forwards in solid array, until one is almost numbed by their quantity and scholarly annotations - almost, but not quite. On closer inspection their validity begins to be put into doubt.
On page thirty-three Cliff launches into a discussion of the subordination of consumption to accumulation. He says - "Under capitalism the consumption of the masses is subordinated to accumulation.", and emphasises this by stating that this is a “basic relationship". He then produces a set of figures to show that this subordination is prevelant in the Soviet Union. Division of Gross Output into Means of Production and Means of Consumption
1913 1927 °28 1932 1937 1940 1950 Means of
Production 44.3 32.8 53.3 57.8 61.0 68.8 Means of
Consumption 55.7 67.2 46.7 42.2 39.0 31.2 There are a number of points on this one Simple table.
Firstly, gross output tells us very little. We need to know vet figures for means of production, i.e. how much is new accumulation. Secondly, the 1913 figures disprove the
point Cliff is making. According to his own definition, Russia in the year 1913 was nota capitalist country! Thirdly, there is no explanation as to what the categories being used mean, Are they value calculations, price calculations, or what? The reader is presented with a generalised statement, but given no terms which defines them. Marx used the two departments of production, means of production and means of consumption, ina highly abstract manner, here we have an attempt to use these abstract terms at a much lower level of abstraction and the result is confusion. This may impress those unused to such categories but it betrays bad methodology. Cliff's definition of capitalism and the subordination of consumption is so vague as to be meaningless. In any society all new accumulation that fakes place is a curtailment of consumption, to the extent that it is not consumed, Moreover, no
society can survive if it does not subordinwe prescial Coiotiuiption to ensure replacement of means of production used ap tn production, Every farmer who keeps back a portion of Whie oi to sow in the spring of the following vear is Subordinciing bis consumption. Cliff presents a supra-histevical category onder the guise of talking about capitalism and as such it is meanineless.
Still on the trail of subordinating consumption to accumu. lation Cliff gives us further figures.
"The quantity of cotton goods available (in the Soviet Union) for private consumption fell from 15.2 metres per capila in 1927/28 to less than 10 metres in 1940... One can see how low these figures are by glancing at the figures of output ... in Britain in .. 1937 60 sq.ms. of cotton goods .... were produced per capila." (16).
Cliff makes an astonishing mistake here. He compares unlikes, you cannol compare consumption with output unless you are dealing with closed economies in which all output is consumed internally. Cliff also forgot that even in the 1930's British cotton poods were exported, so that total production tells us nothing about consumption at home, if may have been lower than in the Soviet Union or higher, but you will not be able to determine this from Cliff's figures, Finally, he compares metres with square metres, which may be the same but we are not told.
A similar mistake is made when Cliff is dealing with housing.
"In the sixteen years between 1923 and 1939 there was an increase of only 106,6 million sq. metres in Russian towns whereas in England and Wales in four years 1925- 28 alone a total floor space of not less than 70 million sq. metres was built." {17)
Again we are asked to compare unlikes. Russian figure is presumably one that excludes rural and other non-urban housing, but on the other hand the figures for Pneland and Wales are total figures which would include each areas, Also one has to take into account the fact that the Soviet rural population was not only absolutely but also reiatis - ely much larger than an foeland and Wales, therefore if would be necessary to include rural areas to obtait a
true picture, Cliff goes on about housing
dies "Some idea of whai a living space of fo sine. cecis
be gained by considering that in Britain the minimum
allowed in new buildings is from 550 to 950 sq.ft. per
dwelling, or about 51-88 sq.ms."
But the 4 sq.m.s does not include kitchen, bathroom, hall etc., according to Cliff's own figures for the Soviet Union, so that when such items were added in they would be considerably more than 4 sq.ms. Of course even then such living accommodation would be poor by British standards, but why nfake it seem worse than it actually was by comparing two different standards? Cliff is comparing dwellings with a narrowly defined living space. —
Other slipshod handling creeps in elsewhere, e.g. on p.35 two indexes are used to make a comparison, but they have different base years, which makes them useless in determining the point at issue.
I have no doubt that the Soviet workers and peasants did make huge sacrifices during the first five year plans, and I do not think there is much doubt that the standard of living did fall. That is not the point at issue here. What is, is that one should not try to bolster up a case by mis-handling statistics. The net result is that much of the evidence that Cliff presents must be suspect, his mistakes on quite simple sets of figures makes the other more complex tables highly suspect, but without access to the originals it would be difficult to determine how far he has used them correctly.
References
(1) Preobrazensky The New Economics p.147
(2) see M. Kidron 'Marx's Theory of Value" International
Socialism No. 32 ~~
Baran and Sweezy Monopoly Capital chp5
)
)
) quoted in the above p. lil
6) Marx Capital Vol. IH p.145
(7) quoted by Cliff p.152
(8) quoted by Cliff p.154
(9) Monopoly Capital p.53
(10) Cliff p. 13
(11) p. 113
(12) op. 159
(13) =" p.160
a4) 2" p.16l
a5)" p.16l
(16) " p.37
(17) " p.39
(18) =" p38
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