Ernest Germain is a
member of the United Secretariat of the Fourth
International. He has written many previous articles for
the International Socialist Review |
What economic problems
does the Soviet Union face today? What is the significance of
the management reforms proposed by the Soviet economist
Liberman?
In September 1962 Pravda
printed an article by Professor Liberman of the University of
Kharkov proposing that profits should be made the index of
performance for Soviet planning, as well as the basis for
bonuses to the personnel and directors of Soviet enterprises.
For two years the discussion touched off by this article has
continued to widen in the USSR and in other workers states as
well as in the capitalist world. A decision of the Supreme
Economic Council of the USRR on August 25, 1964 (On
improving the system of economic stimulants for enterprises and
increasing the material interests of workers in the development
and introduction of new techniques) converted some of the
conclusions in this discussion into law. And a group of
enterprises has begun to function experimentally “on the basis
of profits.”
In order to understand the
reasons for this discussion and the resulting practical
measures, we must start with the pragmatic character which it
bore from the beginning. What Liberman and Co. have sought is
not an “enrichment” of Marxist theory, nor a modification of
the theoretical concepts in vogue under Stalin or advanced under
“de-Stalinization.” What they have looked for above all is
an improvement in important mechanisms of Soviet economy, which
have been functioning more and more haltingly and with
increasing breakdowns.
Certainly, even taking into
account its serious deficiencies, Soviet industry continues to
progress, and to progress at a rate considerably higher than
that of the “mature” imperialist countries (USA, Great
Britain, West Germany, France). But with the passing years,
obstacles which are increasingly hard to surmount have appeared
in the road of this progress. Some of these obstacles are,
moreover, the result of the very successes previously achieved.
Having attained a high level of industrial development, the USSR
can less and less afford the luxury of retaining the
bureaucratic methods of leadership and planning for its economy
that have existed (in various guises) from the first five-year
plan up to the present.
Three deficiencies are
particularly serious in Soviet economy:
(1) The rate of industrial
growth appears to be continuously falling; according to official
figures, it was 11.4% in 1959, 9.5% in 1960, 9.1% in 1961, 9.7%
in 1962, 8.5% in 1963, and 7.1% in 1964 (figures for 1959-1963
in Pravda of March 14, 1964; figure for 1964 in Pravda
of January 30, 1965). In the other industrialized workers states
of East Europe – East Germany, Czechoslovakia and Poland –
this tendency of the growth rate to decline has taken even more
serious forms; industrial production has increased by no more
than 3% or 4% (less than in West Germany or France, and even
less than in the United States since 1961!), or has even
declined (as was the case with Czechoslovakia in 1962).
(2) In a series of consumer
goods sectors, the phenomenon of “overproduction” has
appeared, sometimes revealing itself as an absolute
drop in sales from one year to another, and in any case, as an
accumulation of stocks over and above the target figures of the
plan. These phenomena have recently assumed extraordinary
proportions. Thus, in the case of sewing machines, sales dropped
30% between 1960 and 1963; sales of watches dropped 10% between
1962 and 1963, cotton goods 6%, linen fabrics 10%, ready-made
clothing 1% (Economic Survey of Europe in 1963,
Economic Commission for Europe, Geneva 1964, pp.45-6.)
At the beginning of 1964,
unsaleable stocks of ready-made clothing in Soviet shops
exceeded 500 million rubles (Sovietskaia Torgovlia,
No.1, 1964). During the first four years of the seven-year plan,
unsaleable stocks of textiles, clothing and shoes more than
doubled; they increased on the average four times as fast as
sales. On January 1, 1964, the total value of unplanned stocks
(that is to say, of unsaleable products) had reached 2 billion
rubles; and an additional 1.4 billion rubles had been spent by
the state up to that date in “sales” of goods below their
estimated prices (Voprossi Ekonomiki, No.5,
1964). In Czechoslovakia, a similar drop took place in the sales
of textiles, radio and television sets, and washing machines in
1962 and 1963.
(3) Shocking errors in planning
appear side by side with a further aggravation of deficiencies
that have existed for a long time. Thus the amount of investment
funds “ frozen” in unfinished projects assumed increasingly
dangerous proportions in the course of the last years of the
Khrushchev period. Each year between 1958 and 1963, additional
billions of rubles were “frozen” without any kind of
“return” whatsoever; their total amount reached 25 billion
rubles by 1961 and passed the 27 billion figure by 1963 (these
two figures represent 75% of the respective total investment
expenditures for the two years in question).
This enormous mass of
“frozen” resources is a combined result of excessive
decentralization of investments under the regimes of the Sovnarkhozes
[1] and serious disproportions
in industrial development (in the chemical industry, a lack of
machines and equipment caused the volume of uncompleted
investments in 1964 to rise to 1½ times the volume of annual
investments, that is to say, the plan is a year and a half
behind its schedule for bringing the new enterprises into
production). In 1963, for example, the USRR produced 206 million
tons of crude oil, but the total annual capacity of Soviet oil
refineries reached only 50% (!) of this level of production.
There are cases where these
delays in completing investment projects reach the proportions
of a real scandal. Thus, the chemical combine of Gurjec has been
under construction for ten (!) years. Seven large wood and
cellulose combines in Siberia have been under construction for
thirteen (!) years; machinery imported from Great Britain in
1952 was never used and has by now become obsolete and gone to
rust, etc., etc.
In addition, many investments
appear to be unprofitable. An analysis of modernization
investments in 39 enterprises manufacturing machinery showed
that in 10 of these enterprises, the ruble cost of merchandise
produced had increased after modernization, while production per
ruble of invested funds had decreased (Pravda,
March 15, 1964).
The fundamental aim of the
discussion which was initiated by the Liberman article, and of
the practical measures taken by various Soviet authorities since
then, has been to change this state of affairs.
A
Bureaucratic Reform of the Bureaucracy
The scope of the proposed
reforms, as well as the reforms already introduced, is
essentially technical; ideological considerations or a
desire to “reform” either the economic infrastructure or the
“political” superstructure have nothing whatever to do with
it. On the contrary, what is involved here is an attempt to
change only some purely technical, or so to speak, “surface”
aspects of the functioning of Soviet economy, in order to
preserve its social infrastructure and its bureaucratic forms of
management and leadership. Just as in the case of the 1955-57
reforms (introduction of the sovnarkhozes, etc.), we
are here confronted with a bureaucratic reform of the
bureaucracy. The effects of this reform are not hard to foresee;
those which we predicted at the time sovnarkhozes were
introduced have, in fact, taken place in exact conformity with
our forecasts.
Measures of a purely technical
nature can undoubtedly overcome some of the most flagrant
contradictions in bureaucratic management; but they can only
bring this about by simultaneously provoking or exacerbating
other contradictions. Thus, introductions of the sovnarkhozes
unquestionably eliminated some of the major flaws of extreme
centralization; steel was no longer shipped from Leningrad to
Vladivostok, while being simultaneously shipped from Vladivostok
to Leningrad. But in place of this defect, another appeared;
each “autonomous economic region” having a sovnarkhoze
tried to “duplicate” enterprises existing in other regions
as much as possible. Instead of wasting means on useless
transportation, they were wasted on superfluous investments.
“Regional egoism” supplanted “ministerial egoism.”
Prior to Professor Liberman’s
attempt to “rehabilitate” profits within the managerial mode
of Soviet enterprises, these same profits had already acquired
an increasingly important place in Soviet economy. During the
course of the first five-year plans, industrial investments were
in the main financed from the central budget by means of indirect
taxes (turnover tax), which mainly hit consumer goods
bought by workers and peasants.
But as Soviet industry became
consolidated, the profits of the enterprises (that is to say,
the difference between cost prices and selling prices fixed by
the state) increasingly supplanted the yield from turnover taxes
as the main source of Soviet accumulation. Between 1950 and 1955
the total volume of profits in industrial enterprises increased
by 330%; from 1955 to 1963, it doubled again; in 1964 alone,
this profit should show an increase of 19.5%, and the plan for
1965 forecast an increase in industrial profits of 24% (Ekonomitcheskaia
Gazeta, No.14, 1964).
The major part of planned
profits (74% for the budget year 1964-5) is paid to the state by
the enterprises; the remainder goes to increase their fixed and
circulating investment funds, to liquidate debts, or to cover
losses from preceding years. As for non-planned profits (profits
over and above the planned figure), which is obviously much less
than planned profits, from 60% to 90% remains with the
enterprise and, in particular, furnishes the basis for the
“enterprise fund,” bonus fund, etc.
All in all, Soviet enterprises
retained possession of 5.8 billion rubles of profit in 1955, 9.9
billion in 1960, and should be able to keep 12 billion rubles in
1965. These funds are ear-marked for economic investment
objectives as well as for social investment and distribution in
various forms. But the relatively modest sum which is
distributed from this amount is indicated by the fact that the
“enterprise funds,” which issue individual bonus, vacation
and medical care checks, etc., reached a total of only 134
million rubles in 1950 and 644 million rubles in 1962, and that
only one-half is used for individual distribution (shared,
obviously, by the bureaucrats as much as by the workers, if not
disproportionately by the bureaucrats).
Professor Liberman’s article,
and even more so the August 17, 1964 article by Professor
Trapeznikov, director of the Institute of Automation of the
Academy of Soviet Sciences, proposes to make profit the
principal index of planning performance for Soviet enterprises.
In other words, he proposes that a Soviet enterprise should not
be considered to have exceeded the target goals of the plan
simply because it produces greater quantities than those
projected by the plan, but that the costs of production, and the
relationship between the achieved production and the resources
employed by the enterprise (to take only these two examples),
should also be taken into account.
Avoiding
Waste
What is really involved here is
a technique of avoiding the abuses and waste which have
proliferated under bureaucratic management in the Soviet economy
and which Marxist critics of this management have pointed out
many times. Thus, in the previous system of management,
directors of enterprises had an interest in systematically
under-evaluating the productive capacity of “their” plants,
because target goals of the plan were set in accordance with
declared capacities, and the bonuses received by the directors
were proportional to the amounts by which they surpassed these
target goals; the lower the capacities set, the easier it was to
earn larger bonuses.
Similarly, under this old
system of management, factory directors had an interest in
stockpiling raw materials and equipment (the famous “hidden
stocks”) as an insurance against difficulties in securing
supplies in time or the unavailability of spare parts for making
essential repairs; since
investment expenses had no
bearing on planning performances (the enterprises did not figure
interest on invested funds as part of their cost price), an
increase in production of 2 or 3%, secured even at an exorbitant
cost, would earn bonuses! This same system of management was
also a hindrance to technical progress, for the introduction,
especially in large enterprises, of new manufacturing processes,
with the inevitable concomitant of a period of experimentation
and adjustment, resulted in a temporary quantitative decline in
production, and consequently in a loss of bonuses. Liberman and
Trapeznikov would eliminate this waste and disorder by making
one factor, profit, (which constitutes a kind of synthesis
or common denominator of all economic relations closely or
remotely involved in the considered production) the measure of
planning performance. For Trapezniov, however, the question is
not so much that of a single index, but rather one in which the
system of “indexes” is replaced with a system of economic
levers; by means of such a set of economic levers, the
Soviet authorities will be able to count on inducing the
managers of enterprises to act for the common good through their
own private interest. The scope of the Liberman-Trapeznikov
reforms (as well as those introduced in other European workers
states) boils down to this: to replace planning based on
administrative directives by planning founded on the use of
economic levers.
The use of profits as the basic
index for planning performance does not, however, give a
complete picture of the Liberman-Trapeznikov reforms. We have
already stated that it implies a calculation of interest on
invested capital (!) (the term is Trapeznikov’s), major
objective of which is to reduce excessive immobilizations
(hidden reserves) and the time lag for those immobilizations
which are yielding no “return” (unfinished investment
projects). It also implies a certain flexibility in prices (we
will return to this later).
Implicit evidently in these
reforms is greater independence for the enterprises in the use
of state funds placed at their disposal; also in setting prices;
and, at least in the consumer goods sector, they result in new
relations between the customer and supplier, enabling the
enterprises producing consumer goods to adapt more readily to
customers’ tastes and thereby to arrest the mounting trend to
accumulate unsaleable stocks.
Actually this has been the
direction of the practical reforms introduced into Soviet
economic management since August 1964.
In a letter to the British
weekly The Economist (October 31, 1964),
Liberman himself cites the example of a group of enterprises in
the garment industry in Moscow and Gorki, for whom the plan
goals are now established by the competent sovnarkhozes
in the form of the over-all turnover figure to be reached. The
enterprise is free to select the styles and sizes of the
garments to manufacture in order to achieve this figure, and it
concludes contracts with the stores along these lines, adapting
to the tastes of the public. In this way, the enterprise has an
interest in increasing its effective sales; and since
the stores, too, no longer have quantitative goals to achieve
but a sales figure to increase (bonuses are paid on profit,
especially on “unplanned” profit, that is to say, on a
greater turnover than the goal fixed by the plan), they, too,
have an interest in buying with discernment, so as to promote
maximum sales. It is easy to see how strictly pragmatic this
reform is, that is to say, how it serves to overcome a practical
deficiency which appeared in Soviet economy long ago.
Prices set in the contracts
between the factories and stores in the garment industry are
flexible, that is to say, they fluctuate around the average
prices set by the government but can go slightly above or
stay somewhat below the indicated prices.
The Soviet press has devoted
many articles to this new independence for enterprises, which,
let us repeat, has been introduced so far only on an
experimental basis and on a rather modest scale. Thus Izvestia
of December 26, 1964 tells us that in a group of enterprises in
the Lvov (Eastern Ukraine) sovnarkhoze, planning
performance will henceforth be measured by two indexes: the
quantity of production in its usual meaning, and profit.
More Cheaper
Products
An article in Pravda
October 4, 1964 about the Moscow garment firm mentioned by
Liberman includes an initial balance sheet, drawn up by the
assistant director, covering the first four months of the
experiment. We find, on the one hand, that radical changes have
been made in order to conform to customers’ tastes. But there
is also an indication that the practical effect has been a drop
in the average selling price, that is to say, that the firm
produced more low-priced garments and fewer expensive garments
than before.
This sheds a revealing light on
the real social structure of the Soviet “market,” as
compared with the “ideal” structure anticipated by the
planners, and this revelation is not without interest. It
relates closely to the conclusions of a sociological study
carried out in some typical Leningrad factories: out of 11,000
workers queried by means of questionnaires, about 30% expressed
discontent with their living conditions and housing, about 24%
expressed discontent with wage levels (Trud,
Dec. 2, 1964). The prolonged wage freeze before the end of
Khrushchev’s rule is not unrelated to this dissatisfaction.
Not unrelated to the dissatisfaction, too, was the haste with
which Khrushchev’s successors put an end to the wage freeze.
This example demonstrates how
these “technical” reforms are by themselves incapable of
solving the real problems posed at the present state of
development of Soviet economy. For it is obvious that the
presence of enormous stocks of unsaleable merchandise in the
stores is not due solely to the poor quality of many of these
products, but also to the inadequate level of purchasing power
of wide layers of the population. If this were not so, it would
be impossible to understand the new policy of holding special
“bargain sales” in order to dump these stocks periodically!
And the Liberman-Trapeznikov reforms do not change much for this
particular level of purchasing power.
Another aspect of the reforms
is the reintroduction of the “firm” into Soviet economy,
that is, the reorganization of a certain number of similar or
closely related enterprises into a unit, thereby effecting
certain rationalizations (especially in administration).
Products of these firms are sold under a “registered brand
name” (for example, the firm “Majak” in the ready-made
garment industry at Gorki). In the Leningrad-Pskov region, six
plants making electrical equipment have been reorganized into
the firm “Elektrosila” and this has made it possible to
achieve considerable economies through rationalization and
specialization.
Finally, the reforms also imply
a growth in the rights of factory managers and an improvement in
the bonus system for managerial personnel. A “major material
incentive” in favor of the bureaucracy will help it regain the
efficiency which it lost in recent years – at least that is
what the ideologists of the bureaucracy think! Beginning with
1964, the new bonus system for “managerial personnel” ties
the bonus amounts to the degree of utilization of installed
capacity, and to the percentage of growth in this utilization
from one year to another. These bonuses are often of very great
value: they amount to 23.5% of salaries in the machine-building
plant “Krasni Proletarii” in Moscow, 26% of the salaries of
highly skilled technicians in the “Voikov” foundry in
Moscow, 30% of salaries for the managerial personnel of the fine
cloth factory in Kupavino, etc. (Trud of Dec.
1, 1964).
What the
Liberman-Trapeznikov Reform Does Not Mean
In a great many places, the
Liberman-Trapeznikov reforms provoked sensational comments which
are not in the least bit justified. Commentators in the
capitalist world have interpreted the reforms as an initial step
in the USSR on the road leading back to capitalism. Others in
the working-class movement have viewed them as an initial step
towards the introduction of workers’ control in Soviet
industry, and towards a return to Soviet democracy, at least in
the economic sphere. These interpretations are devoid of all
foundation.
The fact that profit is used as
an index of planning performance has nothing to do with the
restoration of capitalism in the USSR. As we have said, what is
involved is a simple technical measure from which, by itself, no
institutional conclusions whatever can be drawn. The funds
invested in Soviet enterprises do not belong to the enterprises
but to the state. The profit earned by these enterprises returns
to this same state to the extent of 75%. The remainder can only
be invested in the enterprises in conformity with targets of the
plan.
The low or high level of this
profit depends to a very large extent on the prices of raw
materials and of the finished articles – once again fixed by
the state. Under these conditions, the nationalized character of
the means of production and the planned character of the economy
are not fundamentally changed by using profit as an index of the
efficiency of enterprises.
It is true that the fundamental
formal difference between capitalist profit and Soviet profit
now disappears: henceforth, one like the other will flow from a
calculation which includes interest for utilizing invested funds
as an element in “cost.” But this identity is purely formal.
The capitalist enterprise which ends up without profits is
compelled to close its doors and dismiss its personnel. The
Liberman-Trapeznikov reforms do not imply (or should we say: do
not yet imply?) a return to these delightful by-products of
market economy.
Moreover, the operating
independence of the enterprises hardly represents a step
backward by Soviet economy towards capitalist economy; it serves
only to correct the tumor of over-centralization dating back to
the Stalinist period, when the desire to dictate every detail
from a single “decision-making center” existed. The real
danger begins when one passes from this operating independence
to independence in decisions about prices, investments and
employment; but the Liberman reforms do not imply this either
(at least not for the moment).
Adaptation in the variety,
quality and price of consumer goods is in and of itself a
positive reform, so long as it does not end up by hiding
social inequality behind a spread in prices, tailored to a
spread in incomes (“something for every purse” ). This
“adaptation” exists in the capitalist system, too, but it
can hardly be considered as a stage on the road to socialism ...
In general, a certain
use of the “laws of the market” is undoubtedly inevitable in
the period of transition from capitalism to socialism; but in
using these “laws,” the leaders of a planned economy must
understand that there is a basic and unavoidable conflict
between the “law of value” and the principle of planning.
The former tends to direct investments, and
consequently production itself, in accordance with “effective
demand” (that is to say, in accordance with the law of supply
and demand), which would give a structure to this production
identical with that of capitalism; whereas the latter tends to
direct investments, and consequently production, in accordance
with the criteria of social priority determined by the interests
of the proletariat.
Just as the evaluation of the
Liberman-Trapeznikov reforms as “steps towards capitalism”
is erroneous, so also is their evaluation as “steps towards
Soviet democracy.”
Far from being instruments of
struggle against the bureaucracy, they really constitute methods
of materially interesting the bureaucracy in a more
efficient organization of management in the enterprises, are
consequently methods of raising the bureaucracy’s share in the
distribution of the national income; they therefore
fundamentally favor the bureaucracy.
This demonstrates once again
how simplistic it is to equate “centralization” with
“bureaucracy,” since the bureaucracy really constitutes a privileged
caste, which gets its privileges by virtue of the fact that
it controls the social surplus product, consequently,
as the economy grows, develops and becomes increasingly complex,
this control may be exercised more effectively in a
decentralized way than in a centralized way. [2]
The reforms which have been put
into practice in the USSR, as a result of the
Liberman-Trapeznikov proposals, are not limited in their
consequences solely to a considerable increase in the incomes of
the bureaucrats; they are often accompanied by an increase in
their powers and prerogatives within the enterprises as well.
Thus, according to an article which appeared in Ekonomitcheskaia
Gazeta (No.39, 1964), directors will henceforth have
the right to change certain of the workers’ wage norms and
forms of payment without prior approval by the central agencies;
it is true that they will have to obtain the consent of
“social organizations at the enterprise level” (that is to
say, mainly of the trade union leaders); but the independence of
the latter relative to the directors is well known ... It is
true that the director, who until recently had the habit of
speaking of “my plant,” now prudently says “our
enterprise”; but as a Soviet journalist herself writes, at
bottom “nothing has changed” (Literatournaya Gazeta
of March 5, 1963).
The Dangers
of the Liberman-Trapeznikov Reforms
If these reforms are
essentially of a technical character and do not change in any
way the fundamental nature of Soviet economy, or its system of
bureaucratic management, does this mean that they represent no
danger to the normal functioning of the economy? We believe that
the dangers are real ones. Today it is still a matter of potential
dangers; but the logic of these reforms themselves will operate
in the direction of reinforcing the dangers, rather than of
overcoming them.
In this connection, moreover,
it is significant that the economic reforms which were carried
out in Czechoslovakia and which go much further than the reforms
so far introduced in the USSR, clearly reveal this logic and
exhibit a tendency which clearly points up these dangers.
On the purely social level, a
“share in earnings” by the bureaucrats – and in the final
analysis, this is what the new system of managerial bonuses
“as a function of profit” boils down to – will tend to
increase social inequality, not to reduce it. Even in
Yugoslavia, despite the fact that the “share in earnings” is
widened to include the workers collectives and is controlled by
workers self-management, the result has been an increase in
social inequality, not a decrease. [3]
In the USSR, where such control through workers self-management
does not exist, the chances are that this tendency will be all
the more pronounced.
Whenever acute shortages exist,
the use of “economic stimulants” is no more democratic, nor
do consumers find them any “more just,” than the use of
“administrative measures”; this is a well-known fact in
capitalist economy itself. Working-class militants have a habit
of calling it “rationing by the pocket book” and criticizing
it as more unjust than egalitarian rationing. What is true in
capitalist economy does not in the least cease to be so in
Soviet economy. In the sphere of housing, for example, an
application of “flexible prices” inspired by the “law of
supply and demand” would lead to enormous injustices in the
USSR, as it has already in Yugoslavia.
Market Laws
The effectiveness of the
“laws of the market” should not be exaggerated; otherwise
what becomes of the whole Marxist criticism of capitalism, not
only of monopoly capitalism but also of “free competitive”
capitalism, which is the application of the “laws of the
market” par excellence? Adapting production to the
tastes of the consumer can most assuredly eliminate the
unsaleable stocks which are the result of stupid planning; but
it is precisely the determination of production (of its
range, variety, quality) by the market, under the conditions of
“healthy competition,” which winds up in periodic
overproduction and equally scandalous waste. Driven out through
the door, the “unsaleable stocks” return by the window.
It will be said that the whole
problem is precisely that of combining a production
which is, in the final analysis, determined by the plan
(especially in the investment sphere), with a freer functioning
of the market as a guide and inspiration to the planners. That
is completely correct. Only, in the Liberman-Trapeznikov reform,
the market inspires the plan (and is the remote control of
production) through the intermediary of the material
interests of the bureaucrat. This cannot be otherwise in a
regime based on the bureaucratic management of industry. But
this particular channel, in its turn, reacts on the basic
elements of the problem and becomes a source of serious new
contradictions.
When the bonus of the
bureaucrat depends on the profit of “his” enterprise, he
will have a natural tendency to seek out those conditions which
will produce a maximum profit. This particularly implies a free
search for suppliers (in the case of the previously cited Moscow
firm making ready-made garments, the assistant director
complained that the expected profit could not be fully realized
because fabric suppliers did not make deliveries on time), and a
free discussion of prices with them (without which such a search
does not make much sense).
From that point on, directors
will endeavor to establish the same relations between supplier
enterprises and client enterprises that exist between
enterprises and stores, or, in other terms, they will try to
carry into the sphere of the means of production, the same
“flexibility” (in the matter of prices as well) as is
already allowed in the sphere of consumer goods.
The amount of profit does not
solely depend on the flow of merchandise and on securing
adequate supplies of tools and raw materials; it also depends on
efficiency and on the scale of investments. From the moment that
the scale of investments “materially interests” the
bureaucrats, they will seek to control and determine it along
with the aim of the investments more and more directly. From
then on, the Liberman-Trapeznikov reforms will create a
continuously growing pressure on the part of the bureaucrats in
favor of a free determination of the quantity and quality of
goods to produce, their prices, and of the amount of investment
in each enterprise. The logic of “bonuses as a function
of profit, the common denominator of all the economic processes
of the enterprise,” must exert its force in this direction.
But what is rational from the
point of view of each enterprise taken separately is not at all
so from the point of view of the economy taken as a whole. And
the formula of the academician Nemchinov, according to which
“the general return is the sum total of the individual returns
of each enterprise” (Kommounist No.5, 1964),
constitutes too flagrant an error to be explained simply as a
lapse in understanding on the part of this famous scholar; what
is involved is a typically ideological error, that is
to say, one arising from a “bad conscience” and reflecting
an obvious social interest.
Far from increasing the
rationality of Soviet economy, the principle of autonomy for the
enterprises, and of profit as the inspiration and guide to
economic behavior, simply replaces one irrationality by another,
that of a Pharaonic hyper-centralization by that of particular
egoism (of enterprises or of individuals).
The solution should not be
sought in the technical side of management (although
the matter of technique does have its importance! ) but in its social
content. What the apparatus was never able to avoid
(“hidden reserves,” waste, unproductive immobilizations,
lost time), can only be progressively solved by workers
self-management, mass control, free public discussion, the
competition of different Soviet tendencies and parties for the
right to direct economic policy. It is not a substitution of the
market for the plan, but a combination of both with soviet
democracy, at the plant level and the political level, which
will restore order to the economy and give it a new start with
unequaled verve.
March 1, 1965
Footnotes
1.
All in all there were no less than 195,000 (!) uncompleted
industrial objectives in the Soviet Union at the end of 1963 and
beginning of 1964.
2.
We must not forget that in The Revolution Betrayed
Trotsky foresaw that in the event of a victory by the
counterrevolution, neither planning nor nationalization of the
means of production would be eliminated all at once, but that
this would be accomplished in stages and essentially by way of
“decentralization.”
3.
In Socialism and Worker-Management – The Yugoslav
Experiment (Editions de Seuil, 1964), Albert Meister
cites Yugoslav sources which indicate that between 1951 and
1961, the spread in salaries and wages widened greatly; in 1961
it was 10 to 1 (pp.112-113); Tito speaks of a spread as great as
20 to 1 (pp.358-359). And the author adds: “The widening
spread in salaries has been accompanied by greatly increased
‘fringe benefits’ for the cadres.” (p.359).
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