Article 7
October 1, 1987



What Soviet economist Aganbegyan says and doesn't say in International Labour Review. Infrequency of trade union congresses. Glasnost and the trade unions. How will restructuring affect pay scales? Emulation, competition and worker solidarity. Piecework and the Stakhanovite movement. Bourgeois standards of remuneration in first phase of communism. Gorbachev and Ryzhkov on "wage leveling." Objective vs. social judgments to determine wages. Lenin's stand on trade unions, economism and syndicalism. Across-the-board wage increases. Inequality has sharpened, not declined. Envisioned overhaul of pricing system--will it shift national income? Price, value and use value. Democracy and the setting of new prices.

A. G. Aganbegyan was formerly an economic consultant to the Soviet government and is now Chairman of the Commission on Manpower and Natural Resources of the USSR Academy of Sciences. He has written an article1 of considerable interest to us at this time--more for what it leaves out than for what it includes. However, much of it is very informative and written in a readable style.

The International Labour Review is the organ of the International Labor Organization, a United Nations affiliate. A long time ago it was merely a statistical agency attached to the old League of Nations, but its functions have significantly changed over the years, so that now it is composed of some 123 member countries, each of which has about 12 employer representatives and 12 labor representatives. After it became a UN agency it underwent a complete revolution. Some years ago, it became a battleground between the U.S. and the USSR when the reactionary leadership of the AFL-CIO under George Meany threatened to bolt the organization unless the Soviet trade union delegation was expelled. Violent anti-communist that Meany was, he claimed that Soviet trade unions were not free to negotiate on behalf of the workers with the Soviet government. Of course, the UN rejected this outlandish demand, and the AFL-CIO left the organization in protest. However, in recent years, the new AFL-CIO leadership thought it the better part of wisdom to quietly return to the organization.

The ILO and the International Labour Review are still a political battleground where the legitimacy of Soviet unions is occasionally challenged by the pro-imperialist forces, although these struggles have greatly diminished in recent years.

In any case, the magazine carries analytical articles from a host of countries dealing with labor matters, most of them written by bourgeois figures from the so-called neutral, academic point of view. Nevertheless, they contain a good deal of information. For instance, the issue referred to carries an article on workers' participation in personnel management policies in Italy, and purports to describe this participation at the enterprise level, how much headway it has made and the so-called "tripartite consultation" experiment. It reveals that the class struggle itself has reemerged in many ways, notwithstanding these imaginative innovations on the part of Italian management.

So it is that readers of Aganbegyan's article naturally would look to see what he has to say about the role of the trade unions in the new economic strategy in the USSR. But one looks in vain for any mention of them, and this in an organ which is supposed to deal with both labor and management's views and sometimes offers detailed descriptions of labor conditions around the world. Unfortunately, the article confines itself mainly to going over what has already been covered in the reports of General Secretary Gorbachev and of Nikolai Ryzhkov, Chairman of the Council of Ministers, to the 27th Congress of the CPSU (February 1986) and to the more recent plenary sessions of the Central Committee.

In our view, there are three problems he should have addressed himself to, particularly since he is writing for a select worldwide audience which includes many trade union leaders outside the USSR who want to get the Soviet view of the reorganization, not just the view given in the capitalist press. These three points are: the democratization process and the role of the trade unions; the issue of remuneration; and the significance of the campaign against wage leveling. A good starting point, it seems to us, would have been to quote or elaborate on what Gorbachev said to the June 25-26, 1987, plenary meeting of the CPSU Central Committee, when he described how important democratization is for the restructuring plan. "Democracy in all walks of life is expanding and deepening," he said. "Public organizations are displaying more initiative. Democratic principles are gaining momentum in production management." 2

If democratization develops and takes on more vigor, affecting more and more groupings within Soviet society, and shows a tendency not to operate solely for the benefit of neobourgeois intellectuals and academicians, especially those of the so-called dissident movement, then one could expect that this phenomenon will be extended to the trade unions and the working class as a whole--an auspicious and welcome development.

Much is now being written on the problem of bureaucracy having impeded the development of the economy. The same phenomenon of bureaucracy, high-handedness and rigidity has been true in relation to the trade unions. It would have been appropriate for Aganbegyan to show, for example, that for an inordinately long time the trade unions held no congresses at all. To be precise, there was no congress for almost 17 years, from the Ninth Congress in 1932 until the Tenth in April 1949. Of course, this was a gross violation of the democratic rights of the trade union membership and did much to damage the standing and efficacy of the unions. It must have tremendously reduced their role. It wasn't until later years that there was a pickup in trade union activity and the congresses began to be held more frequently. If there's any fundamental group in the USSR which has suffered from the deprivation of its rights, it is the trade unions and the workers they represent.

This should not be interpreted as nullifying the role of the unions in the USSR or lead to an underestimation of the tremendous progress that the population and the working class have made in recent years. The Soviet Union now ranks second in the world in gross national product3 and its economic growth is by no means contracting. Only the rate of growth has declined, although that is of course a factor of enormous concern.

It's all too obvious that if glasnost is to become a real catalyst for radical change, it can't be the radical change that the bourgeoisie would like and which it tries to read into the restructuring plans, exaggerating every little manifestation which seems to point in a capitalist direction. Underneath it all lies an overdue reemergence of a broader, truly socialist democracy, a democracy which has nothing in common with its bourgeois counterpart in the imperialist countries.

It seems to us that the Soviet leaders and in particular the trade unions have to take into account two different paths of development if glasnost widens and deepens and becomes a fundamental element in this new phase of socialist development.

The Soviet Union has successfully avoided any kind of emergence or influence of a deleterious character similar to the reactionary Polish development (so-called Solidarity). But it also might have learned a great deal from the Polish strikes of 1970, which were of a purely economic origin and had their basis in the mismanagement of both the economy and the labor situation.

Any great restructuring of Soviet economic development has its problems and its dangers, and it is impossible that these should not be of primary importance to the trade unions. It's in this connection that we have to take into account the aspect of remuneration: how the workers get paid, how the national income is divided, how and what portion of it goes to the working class and to other sectors of society. This we believe should have been a takeoff point of Aganbegyan's article. He should have given the details, the illustrative material that crosses some of the t's and dots some of the i's, so the reader gets a more concrete picture of what is involved in these remuneration plans.

Aganbegyan gives us a detailed example of how to make more efficient use of trucks. He discusses many aspects of how converting to diesel engines will save fuel, money and time. But what about some details on the plans for remuneration? It's left out. Paying attention to this is all the more necessary because the bourgeoisie and their lackeys from the trade union bureaucracy in the West consistently bring up what they call slave labor in the USSR; that's how they characterize the Stakhanovite movement and socialist emulation. An article in the ILO magazine would have been a good opportunity to explain these two phenomena, since they also were discussed at the 27th Congress.

Let us first take socialist emulation. In the bourgeois press, this general idea is attributed to Stalin and is castigated as an example of an anti-labor practice. In reality, it antedates Stalin's tenure in office and, as a matter of fact, was first brought up as a resolution adopted by the 9th Congress of the CPSU (1920):

In capitalist society emulation had the character of competition and led to the exploitation of man by man. In a society in which the means of production have been nationalized, emulation in labor ought, without impinging upon the solidarity (of workers), only to raise the sum total of the products of labor. Emulation between factories, regions, shops, workshops and individual workers should be the object of careful organization and attentive research on the part of the trade unions and the economic administration.4

It was understood for many years by the working class that emulation in the early days of the Soviet Union was a necessity imposed on the workers by the inadequacy of the means of production--virtually three-quarters of the industrial stock had either been destroyed or damaged as a result of civil war and counterrevolutionary sabotage. Raising the productive forces, getting the working class to emulate in the production process was not a matter of choice but of necessity. However, it should be noted that care was taken not to destroy or impinge upon the class solidarity of the workers, not to bring up that crude, destructive competition which revives and extends the individualistic, acquisitive characteristics that industrialization brought about by capitalism had subjected the workers to.5

In the new socialist system it is the cooperation of the workers and the mass of the people as a whole which changes individual competition into socialist emulation. The greatest care must be taken, however, to preserve socialist solidarity among the workers, to draw all the other heterogeneous social strata of socialist society into the mainstream of socialist solidarity rather than to repeat the cutthroat competition which is the driving force of the capitalist system and without which it cannot survive.

In the USSR at the beginning, the competition was to be between factories, shops and workplaces and not so much between individual workers. Those who produced more got greater remuneration.6

Of course, these socialist emulation campaigns have not always been of an ideal character and frequently degenerated into something else, particularly in the Stalin era. Nonetheless, they have survived and for those concerned with seeing how well they served the Soviet Union and preserved it as a socialist community, it is only necessary to look at the tremendous cooperative efforts made during the war which hurled back the Nazi juggernaut.

In the early campaigns, certain objectives were set and had to be carried out. Herein lies the origin not only of objectives but of quotas. At the beginning the measurement for remuneration was the quantity of goods produced by each worker. However, later on, hours and a minimum wage were set. So while quotas were set and specific objectives delineated, at the same time the utmost care was taken to retain the solidarity, the goodwill, the agreement and enthusiasm of the workers. For without that, the Revolution and the early construction period of socialism would have collapsed altogether. No amount of coercion or compulsion could ever have developed the socialist industries to the level of today. But important as socialist emulation was, it still proved wholly inadequate to move the country forward, as witness the need to introduce the New Economic Policy (NEP), which was a partial restoration of capitalism.

Following in the footsteps of socialist emulation, in later years there was the piecework system, which, while it raised production, really did impinge upon the solidarity of the workers and began a process of social differentiation within the working class, a process from which it has not emerged to this day. This division constitutes one of the problems of Soviet society today in making the transition from the phase of socialism, which Marx called the first stage of communism, into full-scale communism.

As a still further development of the piecework system, there then developed the Stakhanov movement. This seemed a mere intensification, but on a truly enormous scale, of the piecework system. It made quantitative production more and more the criterion, not only in wage demands but for overall production in general. Stakhanovism was based not on the production team, not on the brigade, but on individual performance. Some of this was highly exaggerated and led to the setting of false quotas. However, there are two sides to the development of Stakhanovism as a movement. It was an important catalyst in accelerating industrial production, especially in heavy industry and mining. It wasn't all brawn and physical exertion; it also stimulated new methods of increasing efficiency and output. But the inordinate emphasis it put on individual accomplishments also widened the social stratification within the working class. While the main emphasis in socialist emulation was on cooperation on a particular project in a locality or region, the greatest emphasis was now put on individual ability. Earnings depended on the production output of the individual. But gradually the piecework system gave way and more emphasis was put on time wages. This marked a socially more progressive development and showed the level of efficiency that socialist development had achieved.

We thus see that while, on the whole, the development of individual remuneration for the workers was wholly dependent on the level of the productive forces, varying degrees of material incentives were introduced in order to overcome objective necessity and not as a preference of socialism.

Even if the Soviet Union had not gone through the period of civil war and intervention, and its productive forces had not been so low and backward in relation to the capitalist West, it would still have been necessary to employ an objective standard to measure wages. The only correct communist one, as pointed out in earlier articles, was based on the Marxist principle of "from each according to his ability, to each according to his need." But in the first phase of communism, the objective standard had to be a bourgeois norm of distribution--to each according to his or her work. This would persist until the productive forces were so highly developed that this bourgeois standard, still based on what Lenin called the "narrow horizon" of the bourgeoisie, would no longer be necessary because of the abundance prevalent in the ultimate phase of communism.

It is not necessary to embellish this standard, as we have pointed out in earlier articles. In fact, it is an important step forward for the workers to get equal pay for equal work, especially when capitalism as a whole has not fully attained this anywhere, given the discrimination against women, against nationally oppressed peoples, against young as well as old. Giving full development to this bourgeois standard is a progressive step forward and it will continue until it becomes an irrelevant form, because it will no longer be needed. The abundance that can be produced once the productive forces have been fully developed, when they are no longer hindered by a capitalist environment and socially regressive habits and customs, will make this bourgeois standard unnecessary.

It is in this light that the issue of remuneration has to be viewed. It's entirely possible, of course, that in some areas of the Soviet economic system workers do not yet get the measure of their work, do not get what they ought to. It is possible that this still has to be pursued in order to elevate those who are not getting what they are entitled to under the standard of equal pay for equal work. But what is basically at issue in the Soviet Union today seems to be whether to have an upward revision of wages in such a way as to favor the more skilled, the more privileged sections of the working population and the officialdom in the Soviet Union, as against the lower paid, lower skilled mass of the workers. That is the problem. Let's examine what Aganbegyan and others have to say on this question.

In order to move forward to socialism, then to communism, says Aganbegyan, there are two methods.

An increase in efficiency can be achieved in two ways. First, by mobilizing organizational, economic and social reserves and making better use of existing potential. Such short-term measures have already been applied; and it is no exaggeration to say that they have started to spur the acceleration process, as recent events show. . . .

Secondly, we can also achieve better results through such powerful levers as improved management, the strengthening of material interest in production results and the reorganization of the economic machinery. A number of measures have been initiated along these lines but it will be some time before they produce results. Moreover, however great our organizational, economic and social reserves and possibilities, the fact remains that they are not limitless, and the more they are used the more difficult it will be to keep up the pace. And herein lies the challenge: not only do we have to maintain the pace, we have to step it up! The major leap has to be made in the 1990s; and the main springboard for that leap is scientific and technological progress.7

The question is, how will this concretely and directly affect the workers? This problem has to be pursued in order to really find out what has caused the slowing of the growth rate in the USSR to the extent that Gorbachev in his report to the 27th Congress characterized it as a "pre-crisis situation." One view is that while the cause lies in the disparity of income levels, it is the upper levels that have to be increased first. The plan makes clear that there will be an increase for all the Soviet population, but that a larger increase will go to the more developed and skilled sections of the population and of the workers, not to speak of the officialdom. And so it was that the first wage increase under the restructuring program went to scientists and technicians.

It should be mentioned inter alia that under any circumstances, except for a catastrophic development like the outbreak of another war, the economic and social development of the USSR will proceed. It will succeed in accomplishing its basic targets and will probably overfulfill many of them. The views of the bourgeoisie on this, as in previous decades, will be proven bankrupt. What we are concerned with, however, is how the society advances toward communism.

With respect to the element of remuneration, it is there that the trade unions have to undergo a process of democratization and make their influence more felt.

Aganbegyan should have addressed himself to the question of why there's a campaign against equalization of wages, against so-called leveling. Gorbachev raised it in his report to the plenary session of the Central Committee of the CPSU on January 27, 1987. Said Gorbachev:

New principles have been worked out and are being implemented for raising pay in productive spheres. We have taken a resolute course for abandoning wage leveling and are consistently adhering to the socialist principle of distribution in accordance with the quantity and quality of one's work.8

Nikolai Ryzhkov, Chairman of the Council of Ministers, also alluded to it in his report to the 27th Congress:

It is a task of tremendous social and economic significance to make the system of remuneration more effective. The elements of equalization that have increased of late and serious shortcomings in setting work quotas and establishing wages and salaries are undermining the role of these incentives and are holding down the growth of productivity. We cannot put up with this situation. The earnings of every working person must be strictly adequate to the results of his or her work. The strict relationship between the growth of emoluments and the growth of productivity is an imperative for the modern-day economy and we will insist on its being observed without fail.9

There doesn't seem to be any substantial basis for an attack against levelers or equalization in the Soviet Union today. Could there still be a carryover from the days of War Communism, that is, the phase in Soviet history when direct communist norms of distribution were introduced? After the civil war was over, they were annulled, not because direct communist norms in monetary terms were not desirable but because they were premature and could not fit the difficult conditions of the young republic at the time. The productive forces were not developed, not to speak of the struggle against the counterrevolution, the developing civil war and imperialist intervention. The swing back to a partial form of capitalism under the NEP entailed the employment of bourgeois norms of distribution, payment being made according to the work of the individual worker.

It is highly unlikely that any remnants of that early egalitarian practice have persisted in recent Soviet history. "The elements of equalization," says Ryzhkov, "have increased of late." 10 Precisely when? And why are there such serious shortcomings in setting work quotas and establishing wages and salaries, as he says?

First of all, it seems to us that the reason the system of remuneration is such a "tremendous social and economic task" is due not to a slowing of industrialization and mechanization, but rather because it has had to be done in such a short period. It is only 60 years since the first five-year plan; by comparison the capitalist West had more than two centuries to move toward a mature industrialized society.

When the first Soviet five-year plan began, the number of job classifications of workers was small by comparison with today. There has been a huge proliferation of new classifications that never existed before. With each new industry there come into existence new types of jobs which require different classifications and wage scales. Of course, this is a complex task, but it is not that difficult to develop a technical standard for evaluating the work, similar to time studies. Even Lenin assumed that the Taylor system of studying labor time, developed in the U.S., was technically applicable to the USSR and could be employed there.11 This is not to be confused with the social evaluation of a job, which takes an altogether different standard.

It is quite different when there's a political struggle, when the whole wage plan is viewed in the light, for instance, of the struggle of factions within the unions or within the Party. But the technical evaluation of new jobs using new equipment lends itself to a precise measure of labor time, where that standard is applicable.

Ryzhkov, however, views the system of remuneration as a tremendous economic and social problem. Why? Because what is involved are also social judgments. Who makes these judgments, and what determines social status in Soviet society?

It is elementary Marxism that being determines consciousness. Someone who has spent all his or her life, not in a mine, a steel mill, a farm or service industry, but in the higher echelons of the bureaucracy, might give an entirely different social evaluation of the work of a low-paid maintenance worker in a hospital or an office. All the more necessary is it, then, for the workers themselves to have a fundamental say in the matter. True, in a socialist planned economy the workers alone cannot decide what wages will be, what the whole economy can really produce and what the gross national product will be. But it must be remembered that a majority of the population in the USSR are now workers, having grown from a small minority barely 70 years ago.

Lenin from the very beginning of his struggle for a Bolshevik party fought against economism and syndicalism. It was the Mensheviks who said that all priority must be given to the unions as against the overall political struggle, whereas in Lenin's conception the working class as a whole was the fundamental organ in the proletarian struggle for socialism. He was equally opposed to the syndicalist view that the trade unions in and of themselves could be the political instrument for the overall struggle for socialism.12

Though this struggle between the Mensheviks and the Bolsheviks began as long ago as 1903, it retains significance to this very day. While correctly evaluating the tendencies towards syndicalism and economism, Lenin nevertheless was extremely precise in evaluating the role of the trade unions in a socialist government. He saw the need for the workers to be able to defend their interests through their own organizations, the unions, even against their socialist government.

While Lenin opposed autonomy for the unions, which would lead to their degeneration into a bourgeois form of struggle against socialism, he nevertheless, especially in the debate at the 9th Party Congress in 1920, fought to see that the unions were not stifled or wholly absorbed into the governmental and state apparatus, but would retain their identity and even that their new functions would be expanded.13

To raise wage problems today in the context of a struggle against leveling and equalization seems not only vague but unrealistic--unless there are deeper issues that remain to be brought to the surface. While there is a polemical edge to these attacks, it is nothing like the attacks in the 1930s against levelers and egalitarians. It seems to us that the polemic today is directed not against elements of the present Soviet governing group but rather against the Khrushchev and Brezhnev period.

During the period of the 1960s and 1970s there were some across-the-board wage increases. According to some writers, from the bourgeoisie as well as the USSR, these increases were substantial. The minimum wage was raised during the Khrushchev period and again in 1968.14 It is possible that, on that basis, across-the-board wage increases have been enacted of late, as Ryzhkov says. But this is a far cry from leveling or egalitarianism. Across-the-board wage increases, especially where there are incentives, leave inequities between different classifications of workers. It is not unusual in the trade union movement of the capitalist countries to demand that the bosses set up a special fund to equalize or straighten out significant wage inequities after a general wage increase.

Some bourgeois ideologists who presume to social analysis speak in terms of value judgments and the biases that one has in relation to any social phenomena, including wages. But Marxism proceeds from objective relationships. It identifies the working class as the key and central class in capitalist society by virtue of the fact that it is the producer of all values, that its labor power has generated the material wealth.

The big problem in socialist distribution in the USSR has been that the productive forces are not yet mature enough to go beyond the capitalist heights. Distribution, therefore, is inadequate to fully satisfy the demands of the masses. In the period of Khrushchev, as well as of Brezhnev, some of the inequities became sharpened, notwithstanding increases in the minimum wage and across-the-board wage increases. Material incentives have been gradually evolving and becoming more widespread since the first five-year plan, and the bureaucratic apparatus has grown up precisely because of the great divergences thus created, particularly the contrast between the lower paid and the higher paid.

It was not lack of democracy that created bureaucracy but the low consumption level, the low culture of the mass of the people in the early days of the socialist republic, the struggle to make ends meet--all this heightened by war and intervention.

A definite result of the scientific-technological revolution, certainly in the Western capitalist countries, is the huge growth of the service sector and the decline of the industrial sector. As we have pointed out in our book High Tech, Low Pay, the high-tech revolution has heightened the disparity between low paid and high paid and has created a much more numerous low-paid working class in the service sector along with a shrinking number of more highly skilled, higher-paid workers and specialists. This in turn has brought about fear of a historic decline of the working class, that it will disintegrate and be superseded by a new middle class, alien to class consciousness. All this is bourgeois rot.

The next collapse of the capitalist economy will expose the utter hollowness of this theory and show the unity of the working class and especially of the clerical and service workers. Instead of holding a hallowed position socially, which bourgeois ideologists attribute to them but which is only true for a very thin sliver of the service sector, these workers are becoming more and more exploited.

With this in mind, it was Leonid Brezhnev among others who called the theory that the proletariat was declining and giving way to a new middle class an erroneous "right deviation." We are not aware of who he was polemicizing against or even if it was meant that way, but it is important to note that the working class in the USSR is also undergoing a change. A fundamental aim of the restructuring, as developed in Gorbachev's report and in somewhat more detail in Ryzhkov's report on guidelines for economic and social development, is to replace unskilled workers in order to develop the economy. So it's a valid question to ask how all this will concretely develop, at least in outline form.

Aganbegyan describes how a wholesale shift to diesel trucks is envisioned that will prove more economical. "The same thing will happen in many other enterprises. The main impact of the scientific and technological advances whose foundations are now being laid will be felt in the 1990s." 15

We know that over a considerable period diesel engines have replaced gasoline and coal engines in the U.S. And we know also that this has had a tremendous impact on the railroad workers, who have had to put up a struggle against this rationalization because it deprived them of many benefits. They have had to fight tooth and nail to preserve what they had won in the way of work rules. Every attempt of the workers to maintain their conditions of work was called feather bedding by the bosses. What will be involved in such a change in the Soviet Union? A railroad worker or even a railroad union official reading this would want to know what will be changed.

The difference between what happened here and the situation in the USSR is that there the workers have a great interest in the changeover because they are also involved in the planning. But we still want to know: How will the progressive safeguards and the various work rules be affected? What role do the unions play in the changeover? This is not mentioned in Aganbegyan's article, but it is of key significance.

However important and indispensable wage remuneration is, it must be seen in the framework of the price system--the role of consumption, the purchasing power of the workers, the availability of consumer goods. Aganbegyan explains that a major task of the plan is to:

. . . meet consumer demand for a wide range of high-quality goods and various types of services. . . . But the program will focus less on the quantitative aspects than on improving the range and quality of consumer goods. . . . In order to fill the big gap that exists between the production of consumer goods and actual demand, and to prevent unwanted goods piling up on shelves and having to be marked down, a radical change will be needed in the economic relationships between the population, the retail trade and the producers of consumer goods. A decision has already been taken to reorganize the economic machinery in light industry: the range of targets imposed from above is being sharply limited for enterprises in this industry. Their plans will be drawn up on the basis of contracts with trade organizations, which, in turn, must see to it that their orders conform to actual consumer demand.

Another aim of the reform, inseparable from the first, is to gear the whole system of management to improving efficiency and quality standards and speeding up scientific and technological progress.16

High quality is necessary, but also the price range is important. Some high-quality items may be very desirable for those who can afford them, but a low price may mean more for those who can't afford expensive goods. Later on, Aganbegyan says:

At the same time the way is now being paved for a radical overhaul of the entire system of prices and the machinery used to arrange finance and credit, for developing the wholesale trade and for establishing direct links between enterprises to replace the distribution of production resources from centralized funds. All of these efforts naturally require time, especially the work of drawing up and introducing new price lists. But an overhaul of these basic economic levers will be a major step in the transition from predominantly administrative to economic methods of management and should create the necessary conditions for a further important move towards enhancing the independence and rights of production associations and enterprises while increasing their responsibility for the end results of their work.17

So we see "a radical overhaul of the entire price system . . . an overhaul of basic economic levers . . . a transition away from administrative to economic methods of management." What does it all foreshadow? What could be the meaning of an overhauling of an entire price system? It could forecast a virtual social revolution. Not a revolution in the classical Marxist sense--we rule that out of the question. What it may portend, however, is a wholesale redistribution of the national income. It may affect the prices of as many as 200,000 items and, even if stretched over a long period, that would involve a social transformation of as yet undisclosed proportions.

The phenomena of prices, of wholesale and retail trade, of buying and selling, all these are vestiges of a commodity economy. They are a carryover from the old commodity capitalist system which formerly existed in Russia and which began elsewhere centuries ago.

What are prices? Price is a monetary expression for value. Value in turn reflects, under average circumstances, the amount of socially necessary labor incorporated in a commodity. All sorts of goods, whether they be shoes or gloves or washing machines or whatever, are commodities. Much has been written about the need for quality in these consumer products; the need to concentrate, as Aganbegyan says, on quality instead of quantity. All of this has to do with the circulation of commodities, which must go from the producer to the consumer. The problem which has been stated over and over again is that while there is a shortage of some commodities, in other areas their quality is so low that they pile up because they are not saleable. Consumers do not want them. What is the meaning of this discrepancy between the production of a commodity and its salability, its destination to the consumer? Here we must look at the very meaning of a commodity.

We are still dealing with the circulation of commodities in the USSR, notwithstanding that there is a socialized economy in the sense that the means of production are clearly and unambiguously owned by the workers' state. The circulation of commodities exists side by side with the socialist ownership of the means of production and is indispensable to it. A direct method of getting products to consumers was installed prematurely during War Communism and was later abandoned.

A commodity not only has an exchange value (the amount of socially necessary labor incorporated in it), it also has a use value. There is a sharp discrepancy between the commodity as an exchange value and its use value. Marx explained this contradiction inherent in a commodity in the very first pages of Capital.18

The use value of commodities has failed in the conditions described by Aganbegyan and others. "If the thing," said Marx, referring to a pair of gloves, shoes, whatever, "is useless, so is the labor contained in it; the labor does not count as labor, and therefore creates no value." Marx was not trying to pass a moral judgment here. He was explaining the two factors of a commodity, its use value and its exchange value.

It is from this contradiction that we have to view the problem of the workers as consumers, along with the rest of the population, and as producers. The same working class that produces also consumes. If the values produced, as Marx said, have no use value, if the consumers don't want them, the immense collective labor of the working class is thereby also useless.

Bourgeois economists will say: We could have told you that in the first place! You need to abandon socialist planning and let the free capitalist market reign supreme! No, says Aganbegyan. Our problem is not related to the absence of a free capitalist market. It grows out of the use of administrative measures in the planning and in the price system above all. What then do the Soviet leaders say must be done? Replace the administrative measures with economic ones. That will bring costs into correspondence with actual prices. Consumers will benefit. With the new economic mechanisms replacing the administrative ones, products will be tailored for the consumer and the problem will be solved.

The problem is to develop a correlation between prices and costs, between the actual amount of labor power that goes into a commodity on the average and its price. We in the U.S. know on the basis of the only experience we have, that is, under capitalism, that prices can fluctuate wildly and violently. However, it is to be noted that prices are not an altogether arbitrary phenomenon; they contain an inner lawfulness. No matter how much a pair of mittens may fluctuate in price, the oscillations never bring them up to the price of an automobile or a washing machine. The amount of socially necessary labor will hold the price to a certain level. Where there are no buyers, no consumers, the enterprise is bound to collapse.

The socialist answer, says Aganbegyan, to administrative prices set on command from above is to replace them with economic mechanisms. But how will that be done? And who will do it? Who will carry out this vast, indeed revolutionary transformation?

Nothing so much affects the daily life of the people, aside from their wages, as the matter of prices. Workers have some control over their wages almost anywhere. Where they seem to lose control altogether is in their role as consumers. How will this change in the price structure be determined in a socialist society, in a planned economy, in a period of resurgent democratization?

Notwithstanding the assertion that the prior lists of prices were developed on the basis of high-handed, unrealistic, uneconomic and administrative directives, what will be the political form for instituting economic pricing? Moreover, will the decisions be confined to the same administrative, managerial staffs?

The matter of setting prices is not wholly technical. That would be easy. It is also a social question. If it is carried out by a definite social grouping within the administrative and governmental apparatus or is shifted from one organ of the state to another, the question will be the same as in the development of the wage scale. Will it be done by an upper stratum only, who have long experience with academic training but are not necessarily connected with workers themselves? Marxism teaches us that even in a socialist society, social groupings reflect different social views.

Therefore, in the elaboration of a plan to restructure and overhaul the vast and complex problem of prices in the USSR, the priority must go toward democratic forms as the political form for the new economic content. If it is not really controlled by the mass of the people this time, then it may amount to a new mechanism but will lack the direct participation of the masses and the initiative from them that Gorbachev and others are calling for. If it is not really put to the masses, then there could be a redistribution of wealth that shifts the burden of the price structure onto them.

Lowering prices is easy and always welcome. Raising them is another matter. This applies not only to consumer goods but to the production process as a whole. If the new forms of collective organization are to have any of the advantages which, according to the plan, they are intended to have, then price committees of workers, of consumers, on a truly mass and national scale, have to participate in them. This is what has to be demonstrated: how the masses will participate in this process. If it becomes another edict, then of course it is merely a change in form and not in substance. We know through other experiences that a minor change of price of only one or two kopeks may not be noticeable, but if done on a mass scale, it can add up to billions of rubles.

In capitalist society, the bourgeoisie has learned that the introduction of a sales tax of one penny can go unnoticed, but it adds up to hundreds of millions of dollars in the long run. It's a tax on the working class and a supplementary form of extracting surplus value from them. In reverse, the same applies where there are shortages, especially during war time. Price control in the capitalist countries during World War II showed that notwithstanding the eternal love of the capitalist class for the free market, they nevertheless knew very well how to put a lid on prices and the masses suffered as a result of shortages. But somehow or other, with this uniform rule on prices, the bourgeoisie seemed to get what they needed. It was otherwise with the working class.

Continual broadening of democratization means the replacement of old personnel by new personnel coming from the ranks of the workers. The bourgeoisie may say that the workers can't understand these complex matters (which they in fact complicate), but the workers can exercise sound judgment in a just way that is superior to what any technocrat can accomplish. It is precisely in the matter of prices, which seem to be so removed from the domain of workers' control, as well as in the matter of wages, that the workers have to be again and again encouraged to exercise initiative and participate, from the lowest plant level, neighborhood and small household. As Lenin said, every cook will learn the art of statecraft.

The Aganbegyan article raises a very interesting question concerning the responsibility of the state and of the collective under the reforms.

The new economic machinery must be so designed that society as a whole, i.e. the State, is not liable for the inefficiency of this or that workers' collective but the collective itself is accountable for failing to use its resources and possibilities to the full. Conversely, if a collective works particularly hard and achieves better results, a significant part of the additional profit should accrue to the workers and serve to stimulate them to pursue their efforts.19

First of all, there's confusion here between "society as a whole" and "the State." The two are not synonymous. The state has not withered away or been completely liquidated into society as a whole. That is a long, long way off, according to the report of the 27th Congress, which made it clear that the USSR is still in the stage where it must use the bourgeois standard of the measurement of labor. That is only the first phase of socialism, where the state remains. It is important that the distinction be maintained. It's true that the state may represent all of society, but it has not been liquidated; that marks the highest stage of communism.

It says here that the state is not liable for the inefficiency of this or that workers' collective, but the collective itself is accountable to the state. This seems to run contrary to the whole concept of democratization. The whole idea was to relieve the state of some of its functions, to relieve it from "interfering," as has been said on other occasions, in economic relations. It is supposed to cut down on bureaucratism, petty privileges and so on. It's a wholly other matter if what is meant, or even hinted at, is that the state is relieving itself of its responsibility and thrusting it entirely on the collectives. Viewing it from that perspective, it would not be a good thing at all. Giving a collective responsibility to organize itself, to account to itself, that's one thing. But what about conditions that are beyond its control? What if managers abscond with funds? Why should the workers bear the responsibility for that?

Total responsibility for the work collective is an impossibility. It is a step downward to a decentralized economy, a sort of syndicalist view. The collective, after all, is part of a plan for the whole country. No collective is going to decide autonomously whether to produce beans or bolts or nuts. It's all within the framework of a plan.

Aganbegyan says that "conversely, if a collective works particularly hard and achieves better results" then it will get the profits. But what about collectives that do not work particularly hard? What if they just work normally? Hard work is a flexible concept. Some work hard to the best of their physical and mental possibilities. Some have more responsibility at home, and so on. Some are women with children, some are older, and some are not stimulated by more profit. They may want to have less of that and more time to devote to advancing themselves culturally and intellectually. If one is all consumed to work hard in the collective, and some work excessively just for material gain, it results in other deficiencies, does it not? Aganbegyan says later on:

Where the new system was interpreted in a truly creative spirit and energetic action was taken, as for example in Byelorussian light industry, a noticeable improvement in productivity and quality standards was achieved. The fact remains, however, that the experiment did not confront the workers' collectives with the tough decision whether to work harder and live better or to continue working as before and live badly.20

Again, why this juxtaposition of work harder and live better, or continue working as before and live badly? This leaves out of consideration those who have worked hard and are once again being asked to work even harder. Millions of workers look forward to an even easier life, but all of that is in the dim future.

The academician Tatyana Zaslavskaya, who herself has strong leanings toward the bourgeois market reforms in the USSR, nevertheless has to preface her remarks by acknowledging the great inequality that exists. In an interview for the pamphlet series "Expert Opinion," she is asked, "Where do you see the main source of injustice?" She answers, ". . . in the economic sphere, in the discrepancy between the measure of labor and the measure of consumption." She then mentions "the uneven distribution of investment in schools, hospitals, roads, and leisure facilities. . . . Thirdly, it is bureaucracy. Lenin observed as far back as the first years of the Soviet state that although the October 1917 Revolution had from the very outset created a fundamentally new type of state with true government of the working people, it was impossible to set up an administrative machinery corresponding to it at once. Bureaucracy proved too tenacious and the struggle against it remains one of the key tasks of society to this day." 21

This theme is worth pursuing in future articles.


1. A.G. Aganbegyan, "The New Economic Strategy of the USSR and its Social Dimensions," International Labour Review, January-February 1987, pp. 95-109.

2. Mikhail Gorbachev, "On the Tasks of the Party in the Radical Restructuring of Economic Management" (Moscow: Novosti Press Agency Publishing House, 1987), p. 7.

3. Goldman, Gorbachev's Challenge, p. 4.

4. In Isaac Deutscher, Soviet Trade Unions (London & New York: Royal Institute of International Affairs, 1950), p. 96.

5. For those wanting more details on this question, there is no better exposition of the relationship of competition to cooperation among workers than that contained in volume one of Capital.

6. Further information on the early socialist emulation campaigns and Stakhanovism can be found in Deutscher, pp. 96-116.

7. Aganbegyan, p. 99.

8. Mikhail Gorbachev, "On Reorganization and the Party's Personnel Policy" (Moscow: Novosti Press Agency, 1987), p. 18.

9. Nikolai Ryzhkov, "Guidelines for the Economic and Social Development of the USSR for 1986-1990 and for the Period Ending in 2000," report to the 27th congress of the CPSU (Moscow: Novosti Press Agency Publishing House, 1986), p. 55.

10. Ibid.

11. V.I. Lenin, "The Immediate Tasks of the Soviet Government," Collected Works (Moscow: Progress Publishers, 1965), Vol. 27, pp. 258-59.

12. V.I. Lenin, " `Left Wing' Communism, an Infantile Disorder," Collected Works (Moscow: Progress Publishers, 1965), Vol. 31, pp. 50-51.

13. V.I. Lenin, "Reply to the Discussion on the Report of the Central Committee, March 30 [1920]," Collected Works (Moscow: Progress Publishers, 1965), Vol. 30, pp. 471; 477-78.

14. Goldman, Gorbachev's Challenge, p. 29, pp. 34-35.

15. Aganbegyan, p. 100.

16. Ibid., pp. 102-103.

17. Ibid., p. 109.

18. Karl Marx, Capital (Moscow: Progress Publishers, 1978), Vol. 1, p. 48.

19. Aganbegyan, p. 105.

20. Ibid., p. 107.

21. Tatyana Zaslavskaya, Restructuring Begins with Every One of Us (Moscow: Novosti Press Publishing, 1987), pp. 23-24.

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