Chapter One
Just as the capitalist governments in Europe and America were preparing to implement the Marshall Plan to revive European capitalism after the devastation of the second imperialist war, China was celebrating the beginning of its great capitalist development. What is of interest in this article is the history of the fierce competition over the redistribution of the surplus value produced by workers, the division of the world and its redistribution. Once upon a time, British capital and its social capital were the masters of the world. The development of capitalism and the process of capital accumulation in Britain was a conventional and classical process, and for a long time it placed the social capital of this country in first place in the world, and although the capitalist world was small compared to today, it followed the same laws and processes as it does today. Although this period of British social capital’s rule was long, according to the laws of these relations of production, it ended in the fate that was determined during the first and especially the second imperialist wars. I will not go into the how and why of them here. Just as I will not go into the failure of another giant competitor, the state capitalism of the Soviet camp, for the time being. Although the latter, despite the enormous accumulation of capital in a relatively short period of time, had terrified its rival across the Atlantic by planning the processes of production, development, and advance of capital in new areas of commodity production, whether military or civil, but in this competition it was American social capital that was following in the footsteps of the British Empire and has long been the lord and ruler of the world of capital. The progress of capitalism and the growth of capital accumulation in the Soviet camp should not be underestimated. We will discuss this issue a little later. However, since there are many similarities between the capitalism of the Soviet camp, its history, and the foundations of the growth and accumulation of capital in this vast country and Chinese capitalism after the Mao Revolution, the first study contributes significantly to understanding the historical process of capital development in China.
Before beginning to examine the history of the growth of capital accumulation in the Soviet Union, I consider it necessary to make one point. The acceleration of the process of capital appreciation, the transformation of the entire vast Soviet country with about 96 million workers (in 1920) into a wage labour camp, the mass production of surplus value, and the accumulation of capital in the Soviet Union were called “industrialization” by the party and government leaders of Soviet Russia. This nomenclature or titles of this kind are also used in the case of China, and no new class content is added to the conventional course of the process of capital accumulation in a country in terms of the laws and customs of bourgeois political economy. Their choice, however, is shrewd and has the meaning of impartiality and a conscious avoidance of the application of the categories of capitalist political economy.
The growth of the Soviet military industry, this giant capital giant, especially in the years before and during the Second Imperialist War, industrial growth and the huge accumulation of capital after the NEP plan and especially after 1929 (with about 103 million workers) until the beginning of the Second World War, brought the Soviet camp to the second place in the world in terms of capital accumulation after the United States. What is called the capital accumulation rate (the share of accumulation in total gross domestic product) reached more than 50 percent of the gross domestic product, and this is an unprecedented figure compared to other giants of capital such as the United States, Britain and Russia today. Meanwhile, the production of means of production (capital goods) had a greater growth than the production of consumer goods in other countries. Although this trend continued, it took giant leaps in the period in question. In the years before the Second World War, about 1,500 large holdings were formed, of which about 50 accounted for half of the accumulated capital. These included the Turkestan-Siberian highway, the Dnieper hydroelectric power station, the Magnitna Gorsk iron and steel works and four other iron and steel complexes, the Ural Machine-Building Plant, three large tractor complexes, two automobile and wagon-building complexes. In addition to these, it is worth mentioning the establishment of 9,000 enterprises and the reconstruction of industries before the October Revolution. During this period, the Soviet camp increased its gold reserves, which were an important means of exchanging capital goods with the Western capitalist world, to more than 20,000 tons, which was more than the 1,233 tons produced during the entire period of the Tsarist Empire. To all this, it was necessary to add the military industries, for which there is no reliable figure (it is still a military secret), but all evidence indicates a tough competition in their production, storage and especially sale with the giant across the Atlantic Ocean. In this short period of 20 years (between 1930 and 1950), the growth of capital accumulation compared to before the October Revolution reached 12 times (electricity production 23 times, oil extraction 3 times, pig iron production 3.5 times, steel production 4.3 times and machinery production 35 times). Victory in the war put the military industries of the camp at the forefront of the world. The reduction in production costs, coupled with low wages and access to vast and cheap sources of energy and raw materials, meant that the cost of producing goods produced in the camps was lower than that of similar goods in the United States and Britain. While Western capitalist governments faced large budget deficits and exorbitant government debts during and after the war (the United States government had a debt of about 120 percent of its gross domestic product in 1946), the skyrocketing prices of consumer goods for the masses of camp workers did not raise any eyebrows in the Soviet capitalist government. The destruction and losses of the war in the Soviet Union were much greater than in the capitalist countries of Western Europe. About 32 thousand production units were destroyed or seriously damaged during the war. This caused a 60 percent drop in steel production, 70 percent in coal mining, 40 percent in oil and gas extraction, and about 65 thousand kilometers of railways were destroyed. In addition, the destruction and damage to thousands of cities and villages, the deaths of millions of people, mostly workers, and the loss of tens of millions of livestock in villages, kolkhozes, and sovkhozes (kolkhoz was an agricultural and industrial cooperative, and sovkhoz was its state synonym), and about a third of the social capital of the Soviet camp was destroyed during the war, should be added to the above losses. Most of the capital losses were compensated for during the limited period of 5 years after the war and returned to the pre-war level. The millions of workers in the Soviet camp paid the cost of this massive reconstruction of social capital with poverty, hardship, and hard work. In this regard, there was no difference between the heads of state, employers and managers of the Soviet social capital and those of the Western bloc, who attributed all this great success to competent managers, to the careful planning of the planning committees of the various councils of ministers and managers, and not to Stalin’s wisdom in the absence of Marshall Plan aid for the reconstruction of Europe after the war, to the achievements of Soviet state capitalism after the war. The share of the working masses in poverty was the coupon rationing of the essentials of life before, during and after the war, and this was prevalent in both the Western and Eastern capital camps (as Britain maintained this system after the war until 1953, the only difference being that the rationing system was nothing new to the working masses of the Soviet Union). Nevertheless, the development of capital accumulation in the Soviet Union, especially in the production of capital goods, continued after the war with the same intensity as in the 1950s, so that G.A. Khanin, an expert on the history of the Soviet economy, wrote that “the years 1951-1960 were the most successful period of economic development of the Soviet Union.”
Gross domestic product of countries involved in the Second Imperialist War in percent at the beginning of the period *
*The growth of capital accumulation (whether used as economic growth or GDP) is always high at the beginning of the post-war period because it is based on low-level economic indicators. The same rule can be considered for economies that start from a low scale. For example, China’s double-digit GDP growth in the 1990s can be compared with the 2-3% GDP growth of European countries and the United States at the same time.
However, the development of military goods production and capital accumulation in this area during this period was much higher than that of competitors such as the United States. The construction of the first hydrogen bomb, the first nuclear-powered submarine, the production of a supersonic jet and the first intercontinental missile were areas where the Soviet camp was ahead of its rival capitalists in the West. The effective factors in this entire period and in all areas and spheres of camp capital were concentrated capital, cheap labor, huge labor productivity and access to energy and other raw and auxiliary materials. As previously mentioned, I will discuss the causes of the fall of the camp later, but the camp economists consider the causes of the decline in capital accumulation after this period to be the ineffectiveness of economic planning, the transformation of state ownership into group ownership and the exit of a single, centralized complex into a multitude of separate institutions!! (N.O. Arkhangelsky, The Experience of Industrialization of the Soviet Socialist Republic, author Valentin Katasanov).
During the same period, in the Soviet camp, there was a free advanced medical system, free education from kindergarten to university, cheap apartments and houses with a well-equipped care system, and a relatively balanced level of wages for a part of the workers. The struggle between surplus values and wages (forced and necessary labour) led to a relative level of general well-being, at least among skilled workers and even workers with minimal skills. The latter began after the death of Stalin and with Khrushchev and intensified during the Kosygin-Lieberman reforms. The relatively equal level of wages for equal work by workers was clearly tied to the profitability of the institutions, as was also established in the Scandinavian countries after 1950 (under the Rein-Meidner model). The post-war model of social democracy in Central Europe was proposed by two economists of the Swedish Trade Union in the late 1940s and approved by the congress of the union in 1951. This model is based on Keynesian theory and requires the active participation of the state. The Rein-Meidner model, which influenced almost the entire post-war period in Europe, was based on direct and effective cooperation between the leaders of the General Workers’ Union and the Capitalists’ Union, and its most important task was to resolve the issues of workers’ wages and benefits based on increasing labour productivity and corporate profits and enhancing their competitiveness at the international level. The leaders of the trade unions attend the annual joint meetings of the two unions to prevent any disagreements, the possibility of strikes and any unilateral actions by the workers. Throughout the post-war period, the leaders of the national trade unions have had the opportunity to attend the meetings of the boards of directors of Swedish factories and capital institutions. In this way, the social democracy of Central Europe, relying on the bourgeois parliament, reaches the same solution that the militant social democracy of Lenin achieved by riding the revolutionary wave of the Russian workers and by seizing political power. Both these processes were the product of the horror and fear of another Paris Commune, a horror that after the Paris Commune changed the face of Europe and gave rise to the degenerate social reformism and syndicalism. Instead of the anti-capitalist workers’ movement that had been wandering like a ghost, syndicalism, legalism, resort to elections and social democratic parties – in short, a complete reformism – fell upon the workers’ movement. On the other hand, the Russian workers’ revolution came under the auspices of militant social democracy, and the camp of party and state capitalism was born. This camp was immediately able to turn the struggles of the newly emerged workers of Asia, Africa, and South America into a tool for seeking participation and gaining power in relations with the rival world of Western European and American capital. Thus, the world working class was brought to its knees before the bourgeoisie. History after the Commune is the history of successive defeats of the workers. Let us return to the subject of working conditions in the Soviet Union. The differences in the labour contract of Soviet Russia were previously tied to the profitability of the entire Soviet social capital, and the result of this link was a relatively equal level of wages according to work specialization, but in later periods this was determined on the basis of the profitability of each individual institution. The result was most evident in the vertical column of ministries, departments, and industrial and financial institutions. The allocation of large salaries, economic and social facilities to the managers of these institutions was always and after the October Revolution part of the apparatus of leadership, planning and guidance in the Soviet camp. But this system in the post-Stalin era, and especially after 1969, turned into a war of all the leaders and managers of capital against each other. M. Antonov writes in this regard: “State ownership of the means of production, which was at the disposal of the economic sector, was not a single phenomenon, but was divided between monopolies, ministries and departments, and within each of them between institutions and organizations. Each department, as usual, carefully monitored so as not to harm its incompatible interests with the interests of the relevant sectors. As a result, the implementation of any optimal decision from the state’s point of view was led to resistance by institutions, which often entailed very heavy additional costs” (Mikhail Antonov: Capitalism Will Not Survive in Russia, 2005). If until now, workers throughout the Soviet camp were told with drums, trumpets, and trumpets that they all had to sacrifice their lives to create the socialism desired by the state planners, and millions of workers did so in successive periods, years, and generations, and the result of this sacrifice was the world’s largest industrial giant in a short period of thirty years, now more than ever, capital managers and planners were tearing each other apart over the pursuit of economic and social privileges and greater profits for their institutions! But the Soviet economist G.A. Khanin considers the economic development of this country and the intensification of the process of capital accumulation in the 1950s onwards not as a result of a quantitative increase in the mass of new workers from the countryside, but as a product of the growth of labour productivity after the war. The increase in labour productivity after the war was not unique to Soviet capitalism but was a product and consequence of the growth of various production techniques and the opening of new areas of capital advance in capitalism as a whole, especially in Europe and America, after the war. This is itself a consequence of the economic crisis and its immediate product, which increases the speed of production per unit of time, and war always creates the conditions for the most effective and efficient production techniques in the shortest possible time. Khanin also refers to figures to prove his point and says, “Only one-fifth of the increase in gross domestic product (capital accumulation) is related to attracting additional labour, and 80 percent of the increase in the gross domestic product of the Soviet camp is related to labour productivity.” He does not need such references and generalizations. The enormous growth of labour productivity after the war was not only due to the requirements of capital advances in various fields, from industrial agriculture to all industries and capital transactions, but also the material and technical conditions for it were provided during the war. This parameter and principle were the main source of the acceleration of the decline in the rate of profit in the years after the peak of large-scale capital accumulation. Many camp thinkers consider the purges of the Soviet Union in the 1950s and 1960s in the dismissal, arrest and even disappearance of party leaders who played a role in production planning, such as G. Malenkov, L. Kaganovich, M. Saburaov, G. Prokhin, V. Molotov, A. Zurov and A. Karavushkin, as an important factor in the disintegration and the beginning of the crisis of camp capitalism. However, the purges were a consequence of the capitalist crisis that had already begun. The beginning of state management reforms during the Khrushchev era was a consequence of the unsettled economic situation in the Soviet camp, not its cause. The state capital fund was being depleted, and this was despite the growth of capital accumulation. The growth of capital accumulation had long outpaced the growth of surplus value production. Until the Stalin era, agricultural combines, the repairs of these important means of industrial agricultural production, and even tractors, which were produced and repaired by large machine-building plants, were leased to the collective farms from technical centers. From the late 1950s, this process stopped, and the collective farms were forced to purchase these means of production, sowing and harvesting machinery in industrial agriculture. Repairing this agricultural machinery was also expensive, and most collective farms were unable to repay their debts to the state, let alone cover the cost of their repairs. Of course, the capitalist state received significant amounts of money for rent and repairs from the collective farms. But it was more profitable to sell them and pass all the repair costs on to agriculture and industry. Nikita Khrushchev liquidated the groups of producers of consumer goods (known as artels) because of the heavy costs to the capitalist state, and this was just the beginning. During the Kosygin-Lieberman period (1965-69), what was called “the evolution of planning and strengthening of economic incentives for industrial production” effectively removed subsidies for consumer goods for the working masses. Social consumption funds were liquidated; wages and their amount were tied to the profits of production enterprises and the turnover of goods. When the economic crises of the 70s whispered a new beginning. When, after decades of economic acceleration, under the control of an astronomical increase in labour productivity, and when the process of increasing capital accumulation and its rate outpaced the rate of growth of surplus value and made the crises more devastating, the same fate befell the Eastern and Western blocs of capital. There was no evidence that the laws of bourgeois political economy functioned differently in the East than in the Western capital bloc. To understand the similarities and differences between Soviet and Chinese state capitalism, one must go back to the beginning of their formation.
A.H. Carr writes in “History of Soviet Russia, Volume II”: The turn to the poor peasants in the summer of 1918 was related to another fundamental goal in Soviet policy, which was the establishment of large-scale agriculture. The poor peasants were the only peasants who could be thought of as not caring about peasant property and therefore potentially agreeing to collective farming, and this was the basis of large-scale farming. For this reason, a decree was issued in February 1919 that the time had come for the transition from individual to collective forms of land use, and that all forms of individual use could be considered obsolete and obsolete. The purpose of using the category of collective farming was not to preserve the principle of collective labour, but to cultivate on a large scale with the aim of using machinery and creating conditions for increasing labour productivity. As H. Karr considers the fundamental goal to be “the creation of a single productive economy that should provide the Soviet Republic with the greatest possible amount of economic goods with the least amount of labour.” “The Soviet farms, which could be managed under a single director… had a very similar organization to that of nationalized factories,” he continues. “A decree was issued authorizing industrial enterprises or groups of industrial enterprises, trade unions, to purchase land and establish large farms… The intention was apparently to send groups of workers from time to time to the villages to work in the industrial Sovkhozes instead of the local workers. The return of factory workers to their villages at harvest time was a normal phenomenon in Russian industry.” This phenomenon works in the case of China in such a way that the capitalist state allows poor peasants (migrant workers) who either have no land to cultivate and are simply other people’s labourers or have a plot of land of about 0.5 hectares, which is not even enough for the family’s basic needs, to leave their villages in search of work during the non-harvest season (of course, not all family members). In this way, a huge mass of migrant workers who temporarily go to the cities but are normally tied to this small plot of land like slaves by the contract that the local governments have concluded with them. H. Carr describes the period before the October Revolution as follows: “The Russian peasantry was divided not into two but three classes. One was the prosperous peasants (Gulaks), who cultivated both for their own consumption and for the market, who hired workers and sold their surplus produce. This section of peasants constituted less than 10 percent of the rural population. The poor peasants, who constituted about 40 percent of the rural population, had no land or their land was too small to support themselves and their families and had to do wage labour. The middle peasants, who constituted about 50 percent of the rural population, were able to provide for themselves and their families, but did not hire workers and had no surplus produce. But the middle peasants, despite all the support they received from the central government, gradually began to complain that the state farms were nothing more than the return of large estates under the Soviet flag. Lenin acknowledged the peasants’ suspicion and anger towards the state farms, especially when the old exploiters were in charge of their administrative and technical work. In this context, the state farms were subjected to a full-scale attack, which attracted specialists by offering high wages and interfered in the distribution of land. They said that the directors of the state farms lived in luxury in the former manor houses and that they had reinstated the dismissed lords in the name of directors of the state farms. According to H. Karr’s description of the class structure of Russian villages, the majority of the population in the villages, both during the Tsarist era and afterwards, were wage labourers, and the term peasants for them only because they lived in the village was a complete mistake and very similar to the “middle class” that has long been the fodder of left-wing reformists throughout the world of capitalism, which, with the aim of disintegrating the workers, refers to such sections of the working class as teachers, workers in the treatment of capital, workers in the offices of the capital bureaucracy, and even sellers of goods!!
This class division of the Russian countryside also coincides with the division of land:
* H. Carr attributes the decline in large landholdings, which led to the decline in production in these three years, to a shortage of labour, tools, and fertilizers. For this reason, the shortage of capital goods for industries led to a decline in production and a decrease in capital accumulation in related industries. This is because the middle peasants (nominal owners of medium-sized arable land) generally produced food for their families, rather than special, semi-capital goods used in industries, such as millet, wood, oilseeds, cotton, hemp, Egyptian hemp, and animal fodder. Poor peasants could not even afford to produce their annual needs.
The fact that the economists and planners of Soviet social capital, from Lenin, Trotsky, and Stalin to every petty government official, viewed state capitalism with the idea of socialism, and lived and acted under the influence of this atmosphere and illusion that they had created, and in some cases recently had given the working class some minor welfare facilities or privileges, did not diminish the nature of the capitalist relations of production prevailing in this great society, nor did it create any minor change in these relations. For this reason, the economic process, class conflict, and the conflicting interests of the workers with these relations followed the same laws that other capitalist blocs also followed. The whole goal of Russian social democracy was the capitalist transformation of Russia and the departure of the hundred-year-old path of Western capitalism overnight. In this process, state capitalism could be used as an important tool, as it was in practice. The Western bloc of capital could not continue to exist in the previous way either. Influenced and terrified by the nightmare of the rising working class, it was forced to make concessions from time to time in order to drive out the ghost of the nightmare of the workers’ struggles of the previous century. The European bourgeoisie had advanced to the brink of collapse in the previous two centuries, and only a little experience and the plague of social reformism of social democracy saved it, for this reason and thanks to this experience it was forced to make concessions to the working class, concessions for which there was no guarantee and which it could take back part of at any moment. These two processes and tactics of social democracy in Western and Eastern Europe had the same class origin, which was the preservation of capitalist wage labour relations, and they also led to the same result. In the East, Lenin’s militant social democracy seized political power, calling itself the representative of the proletariat, and, just as three decades earlier in its programs and goals it had called state capitalism the same as socialism, it issued a decree for workers to return to wage labour. Western European social democracy, with a slight difference, bound the working class to bourgeois parliamentarism and, by granting them concessions, imprisoned and paralyzed them in the circle of competition between factions of the capitalist class. All European social democracies, from the West to the East, were bourgeois parties that were building a solid and durable system against the class struggle of the workers after the Paris Commune, which could maintain the relations of production that governed wage labour in any form and at any stage. Kautsky, the leader of German social democracy, considered state capitalism to be the Kaaba of aspirations and the intermediary between capitalism and socialism, and the entire Second International, with all the colourful spectrum parties that considered themselves representatives of the European proletariat, opposed the private nature of property, the irrationality and unplanned nature of capitalism to a rational economy and planning. For all of them, the type of ownership of capital determined the class nature of the relations of production. The state and state ownership of capital were the same as socialism. These parties interpreted the growth and development of capitalist monopolies as the growth of socialism within capitalist relations of production, the central nucleus of social reformism, the spectre of which still haunts the world working class after 150 years throughout the world of capital. The Erfurt Program (1891) of German Social Democracy emphasizes the unplanned nature of private capitalism and says that if we move from joint-stock companies to trusts, which monopolize and control entire branches of industry, not only will private production end, but unplannedness will also end. Lenin formulates this as follows: “Compulsory trustification, the compulsory formation of industrial unions under state supervision, is what capitalism has prepared. This is what the Juncker government has done in Germany. This is what will be done in Russia for the soviets, for the dictatorship of the proletariat. This is what our present-day, non-bureaucratic general state apparatus will give us.” Lenin, Vol. 26, pp. 261-262.
The path that Social Democracy in general and Leninism in particular set before the Russian labor movement from the beginning to the end of the Second International and throughout the years before the October Revolution was the preservation of the totality of wage labour relations and capitalist relations of production. It promised the Russian proletariat a harvest that first everything, from the bargaining power over daily necessities to the half-closed workers’ councils (not every council is necessarily an anti-wage labour council of the working class. The anti-capitalist workers’ council movement is something much more than the democratic workers’ organizations called councils that were formed in the revolutions of 1905 and February 1917), should be devoted to the expansion and development of capital.
Lenin said that what the Russian working class suffered from was the lack of this development (two tactics of social democracy: the Russian working class suffered not from capitalism, but from its insufficient development and immature form), so he made the seizure of the means of production and the nationalization of capital the immediate and ultimate goal. It is clear that Russian social democracy, like its Western brothers, was a bourgeois reformist party that hid itself under the guise of a proletarian party, and the rest of the philosophizing and justifications were carried out with the aim of capitalist development. This was not due to his ignorance and lack of understanding, nor to Karl Kautsky, Georgi Plekhanov, and other social democratic activists. It is not thoughts, ideas and policies that make history and historical facts, but rather these facts and the origin of classes that act as the material and economic needs of society demand. On the other hand, the true indicator of the capitalist or socialist nature of the mode of production and social relations is absolutely not the legal and formal form of ownership of the means of labour. Ownership of the means of labour has taken on various forms throughout the life of capitalism and is still evolving. What is constant and characteristic in these relations of production is the commodity nature of labour power and the relationship of buying and selling labour power. The sale of labour power has a very precise and clear meaning. The person who sells his labour power separates himself from his work, loses the right to intervene in determining the fate of his work, and is forced to accept the monopoly of this right for the buyer of labour power.
At the March 1921 Party Congress, Leon Trotsky wrote in a resolution, “A single economic program makes sense only if we have in our hands the necessary apparatus for the correct distribution of labour on the basis of a single economic program that covers the entire country and all branches of the economy.” These are the core of the bourgeois reformist parties whose hot, poisonous breath is infecting the lungs and brains of the European working class. Lenin proudly writes in the draft of the New Economic Plan (NEP) that he had proposed the idea of state capitalism back in 1905. Therefore, everything that takes place after October 1917 is exactly the same as that which was formed in the party programs of all Social Democracy and in the heart of the Second International. The wars and quarrels of various groups and party factions were also of the type of bourgeois parliamentarism. Lenin wrote in “Will the Bolsheviks Seize Power”: “The new regime will need engineers, agricultural engineers, technical experts, all kinds of technical specialists with scientific education more than ever before, and during the transition period these people should be paid more than the workers.” This was just to convince the party opposition and to insinuate the workers to abandon the socialist utopia and build state capitalism!! When the leftist opponents called this “the revival of the leadership of the capitalists.” Lenin replied, “The leadership of the capitalists is given not in the name of the capitalists, but in the name of technical experts or organizers.” He writes in the “Current Tasks of the Soviet Government” on the bureaucratic centralization of the management of industries and state apparatuses: “Every large machine industry requires the unconditional and strict unity of management, directing the simultaneous work of hundreds, thousands, and tens of thousands of people… Absolute subordination to a single management is the unconditional form of the process of labour organized on the model of large-scale industry.” Capital and the capitalist class do not exercise their dominance over the conditions of labour, production, exploitation, and life of the workers only through recourse to force and state power. Scientific superiority, expertise, management power, and superiority in social planning or policy-making, and the like, are all mechanisms for exercising sovereignty, ownership, and power. The Soviet state apparatus used this well and used it in the best way, and it pointed out to the workers any obstacles by raising the banner of managerial and leadership power. Encrypting capital, pretending that managers have the planning ability, pretending that capital is self-increasing and workers are nothing are the characteristics of these relations and were not and are not specific to the Soviet capital state. Management in state institutions was adopted by the Party Congress in 1920 with the emphasis that “no union organization directly interferes in the work of the institution” and quickly came into effect, so that in the same year, 1873 out of 2051 institutions were managed by a single person. Interestingly, the government did not even tolerate the interference of trade unions and did its best to dissolve them in the state apparatus. This effort continued for a year until it was finally approved by the Congress of Trade Unions in 1919. But it took three years to put it into practice. Even in the years immediately after the revolution, trade unions played the same role in the Soviet Union as they did in the Western Bloc of capital. The first Soviet labour law was approved by the All-Union Executive Committee on October 10, 1918, and came into effect six months later. The conclusion of a collective labour contract, which determined the terms of employment, was concluded between the unions as representatives of workers and the employers or management of the enterprise. According to this law, work was defined as social service, and the use of the term “buying and selling labour power” was considered capitalist and was abolished. According to this law, work was a social duty and stipulated that if no skilled worker could be found, he had to accept what was available. Thus, the fetishism of commodities and money operates in state capitalism in the same way as in any bourgeois society where the commodity form of production and labour power sever the relationship between wage workers and the product of their labour. Wage workers in this form of capital ownership also view the products of their labour as beyond their control and are consequently dominated by the products of their labour, the instruments of labour, and state capital. Marx sees the beginning of such a process and in Volume III, Chapter 27, “The Role of Credit in Capitalist Production,” he writes about the formation of monopolies, monopolies, and joint-stock companies: “This is the elimination of the capitalist mode of production within the capitalist mode itself. And therefore it is a contradiction that brings about its own elimination and appears at first glance as a simple transition point to a new form of production. It is with this character that the contradiction also manifests itself in practice. In some environments it brings about monopoly and therefore requires state intervention. A new financial aristocracy creates a new type of parasite in the form of planners, founders, and managers who hold this position only in name. The system creates a complete fraud and deceit in connection with the question of the establishment, the issue of shares and the exchange of shares. This is private production without private control,” Marx continues. “Apart from the joint-stock system – which is the very basis of the capitalist system and, to the extent that it expands and embraces new productive environments, destroys private industry – credit gives the individual capitalist, or the person regarded as a capitalist, within certain limits, absolute access to the capital of others, the property of others and therefore to the labour of others. Domination not of his own capital but of social capital also gives him mastery over social labour.” Capital is a social relation that shapes and governs its own laws, culture and social relations in every form and shape. The process of forcing workers to change their workplaces, the creation of forced labour camps for war refugees, prisoners and children began in April 1919. War mobilization became an excuse to make these centers permanent. The first workers’ disciplinary courts were formed in mid-1919, and the work of this organ of capital repression intensified even after the end of the civil war. Reports from mid-1920 say that the cases of these workers’ convictions are as follows: coming late to work, misbehaving with customers, absenteeism on Sundays, failure to observe union discipline, disobeying orders from managers, arbitrarily quitting work, and propaganda for shortening the daily working hours. In half the cases, the worker was dismissed. Although the anti-Soviet forces had been defeated, the militarization of labour under the name of “labour corps” continued with great intensity, as Trotsky said at the Ninth Party Congress: “It is impossible to militarize the economy without militarizing the trade unions themselves, without establishing a regime in which every worker considers himself a soldier of labour and cannot freely offer himself for sale. If he is ordered to be transferred, he must obey. If he does not obey, he is a deserter and will be punished. Who should follow this trend? The trade unions are the ones who create the new regime. This is the militarization of the working class.” These were not just words but were quickly put into practice. The general direction of the work of restoring and strengthening the normal economic life of the Urals, Donetsk (coal mining), southeastern Russia, Ukraine, the Turkestan railway, etc. was entrusted to the labour corps, the results of which became clear a decade later as a result of the huge accumulation of capital in these regions and areas. The Soviet machine for the production of profit and capital was set in motion. It seemed that with the beginning of the NEP, the policy of “militarization of labour” by the government should have been relaxed, but in practice its validity was revealed in the economic results and was taken up in the five-year plans. Lenin said about “recruitment” at the Third All-Russian Congress of Trade Unions: “Work must be organized in a new way, new forms of remuneration and obedience to labour discipline must be created.” In this speech, attention was paid to the functioning of Trotsky’s labour policies. He added that “the creation of a new form of social discipline is a task that will take decades.” Of course, he was wrong in this regard because the new labour policy bore fruit in the first five-year plan!! In the same year, Nikolai Bukharin wrote in his book “Economy in Transition” that “Labor service in the capitalist system means enslaving the working class, but the same work in the dictatorship of the proletariat is nothing more than the self-organization of the working class.” This was the beginning of the tragic fate of one of the most turbulent and advanced labour movements in the world. The silence thus imposed on the mouth of the Russian working class not only pushed it back into the most terrible and deepest dungeons of capitalist history, but at the same time turned the largest and most rapid world capitalism into a force that had no obstacle in its way to demanding a share in the distribution of global surplus values except itself and its subsequent crises. The silence of the Russian working class was not only the beginning of the formation of a war machine that had to stand against the terrible military force of the Nazis, but also had to be sent millions of millions to the slaughtering fronts of the European working class in the second imperialist war to wrest the share of this giant of capital from its competitors. Soviet state capitalism under the guise of socialism was supposed to drag the Russian working class to such a degree of misery, servility, struggle, and class annihilation that today it either falls into the clutches of Putin’s fascism in Syria, the Middle East, and Donetsk, Ukraine, slaughtering other working masses of the world, or falls into the hands of the nationalism of his opposition, such as Alexei Navalny.
Since 1921, the “New Economic Policy of the NEP” was based on the support of the capitalist state for cooperatives, the transfer of company privileges to individuals, the opening of private commerce and the welcoming of foreign capital, and the transfer of the sale of surplus agricultural goods from the state to producers in the market. The ownership of small and medium-sized industries and units in the cities was in the hands of the owners of these industries, but heavy industries, transportation lines, foreign trade and the banking system were in the hands of the capitalist state. Throughout the entire period, that is, since October 1917, the central government competed with small producers, farmers and ranchers with concentrated capital and tried to convert as much of the profit as possible into its own capital accumulation by creating and maintaining a monopoly on the purchase of their products.
The first five-year economic plan was accompanied by the restitution of 25 million farms belonging to private owners in the form of 250,000 cooperative lands, the withdrawal of the state share before the cooperatives’ share, and thus a deep competition broke out between the different ownerships of capital, the state share of capital accumulation in agriculture and the various cooperatives’ share of them. In the industrial field, coal production, steel, tractor production, large factories and mines began to operate, and the machine-building industry was launched.
Before the NEP, the 1920 census (out of a total population of 137 million, 21 million, 15.3 percent, were in cities) estimated the total number of industrial enterprises in the entire USSR at 404,000 units, of which 350,000 were in operation. Three-quarters of these were single-person or family enterprises, and the remaining quarter employed wage labourers in production. The total number of workers from the 1920 census should have been about 96 million, while the total number of industrial workers was reported at 2,200,000 (89 percent of all industrial workers). Of these, 1,410,000 workers were employed in large industries (64 percent of the total) with more than 30 workers. The total number of state-owned industries was 37,000 units with 1,615,000 workers. Cooperatives had 23,000 workers. The nationalized industries included transportation, construction, electricity and fuel, chemicals, textiles, leather, paper, metals, tobacco and cigarettes, printing, music, confectionery, and paints and varnishes. Here, the cooperatives were in the same situation as other companies, both state and private. Since money had completely lost its value, wages in kind had become common. Workers in many units of labor and production received wages for the goods they had produced themselves. They had no choice but to sell the products in the market or exchange them in kind. The empty space of state-owned stores and the intense activity of private commercial centers were the result of this policy. In fact, NEP was nothing more than the approval of a type of business method that had arisen spontaneously. But the government was forced to print as many banknotes as possible to pay for government expenses and to give credit to its industries and commercial exchanges. Lenin wrote in May 1919 in a request to the peasants, “Hand over your grain in exchange for banknotes, which you cannot receive in return for, but this money is a sign of a loan given to the government”!! One of the trade union delegates at the All-Union Congress of the same year says: “The trade unions must in the near future establish a commodity-based wage system, with this there will be no money left even in this area, and we will finally reach the point where we will do our work without calculating in rubles and calculate the energy consumed in terms of the number of days and hours” (Discussion at the plenary session of the section on the cost of industries, Congress of 1919). It seems that the workers understood the economic basis of capitalist society much better and more than Lenin. Here they consider their socially necessary labour as the basis for determining the value of a commodity, which is in fact the product of labour becoming a commodity. The value of every commodity is equal to the socially necessary labour or socially necessary labour time spent in its production. This real and genuine unit is involved in determining the market price of commodities, the process of forming the general rate of profit, the way in which the surplus values resulting from the exploitation of the proletariat are distributed among the various sectors of capital, the competition of capitals for the acquisition of a greater share of surplus values, the struggle of individual capitals or capitalist enterprises to increase the productivity of social labour as much as possible, the relationship between the various sectors of international capital and the nature of these spheres, and the workers know this, if not well, then to such an extent that they answer Lenin in this way. Nevertheless, it took months for the All-Russian Congress of National Economic Councils in January 1920 to declare that “the unit of labour has been recognized as the basis of measurement. Accounting requires a fixed unit, and this unit will be labour time.”
The policy of concentration of capital was carried out mainly in the field of industry and attempts to transfer it to agriculture remained limited to the formation of state farms, collective farms and artels (commercial companies for the exchange of agricultural goods), and even then, they remained limited. For this reason, Lenin also wrote in his pamphlet “On Taxation by Product” that the Russian economy showed some characteristics of advanced capitalism. In 1921, following the implementation of the NEP plan, renting agricultural land and having workers was formalized. Often, legalizing a common practice that had been considered illegal until then was not an innovation, but rather the recognition and promotion of something that had emerged after the seizure of power by the Bolsheviks. In this sense, the party and the entire bureaucratic structure of Soviet Russia were very pragmatic and adaptable. Commodity exchanges clearly demonstrated this phenomenon. Lenin put it this way: “Freedom of trade means, to a certain extent, the growth of capitalism… This capitalism will be under the control and supervision of the state.” Despite state ownership of all land, the peasants were recognized as having the right to own their own land and to increase it, to cultivate it with the help of wage labor or to rent it to others, and to pay taxes as citizens. Taxes, land rent, and the sale of agricultural and livestock products to the state became the most important sources of value addition for state capital in these areas of capital advance. All of this is based on the capitalist principle that in order to be able to stand on its own, it must be profitable according to the process of capital. Explaining the NEP plan to the Tenth Party Congress in March 1921, Lenin wrote, “The freedom and rights of cooperatives in the present situation in Russia mean the freedom and rights of capitalism… But this cooperative capitalism, in contrast to private profit-making capitalism, is a kind of state capitalism in the Soviet government and in this respect is useful for us at present.” These formulations were repeatedly used in various economic relations, including industry, industrial agriculture, trade, and in general the exchange and circulation of goods, money, and capital. All these political games were intended to deceive the workers and capture them in the illusion of socialism. The same policy and trickery is used today under the titles of fighting neoliberalism, state-sponsoring production and exchange of goods by various populist and social reformist parties and groups. A trick and deception that is about a hundred and fifty years old!! But at the same time and now the main issue that is kept hidden so that in the eyes of the working masses the reforms are considered in their favor has been the competition for the share of social profit from the surplus value produced by the workers. In the Soviet Union, an attempt was made to reclaim the property of the cooperatives that had previously been confiscated. State departments and trusts, industrial and financial syndicates constantly ignored the cooperatives and saw themselves as the economic rulers of society. The cooperatives tried to conduct their trade with private merchants and traders. However, due to the relatively complete dominance of state trusts and syndicates, the figures for 1922 show that the cooperatives acquired more than three-quarters of their goods in exchange with state trusts and companies. The number of cooperatives in 1923 was about 55,000 shops, employing thousands of workers. Due to the sharp fluctuations of the Ruble, goods and raw materials were generally valued at the average price of the European market, especially the London market. Despite the depreciation of the Ruble, a return to this currency unit was inevitable. The state bank, which resumed its work after the NEP, made its main task the development of industry, agriculture and commodity exchange by granting credit and other common banking operations to facilitate the process of capital circulation and accumulation. The bank began operations with a capital of 2 trillion Rubles. The State Bank of the Soviet Socialist Republic (Gasbank) had an exorbitant interest rate of 8% per month (96% per year) for state institutions and institutions and 10% (120% per year) for private institutions!! However, the bank operated with money that was rapidly losing its value daily. Therefore, its policies and credits were becoming worthless. For this reason, in November 1921, a new Ruble was issued, the market value of which was one ten thousandth of the Tsarist Rubles. But this too was constantly falling. The story of the collapse of the Soviet currency is a burning and burning story, some of which are interesting to hear. Some Bolsheviks, who thought that everything would be shaped, set in motion and eventually reach its destination by the will and command of the Leninist party, took the collapse of the Ruble as a good omen and trumpeted it to the ears of the Soviet proletariat and the world that the need for money and its function had become unnecessary in the Soviet Union! Others pretended that they were consciously “setting fire to the front of the bourgeois system”! And finally, others, in explaining the collapse of the Ruble and the increase in the prices of essential goods for the working masses, justified it by saying that “in a communist society, money will eventually cease to exist and this day is near”!! Lenin, a little later, in a plea to the peasants to save the ruble, says: “Give your grain in exchange for banknotes, for which you cannot receive any goods, but this money is a token of a loan given to the state.” The fact that the Bolshevik leaders, and even Lenin himself, concealed from the proletariat the connection between the symbol of money and the reality of capitalist production relations can only be justified by the fact that Marx explains in Volume I, Chapter II of Capital: “At first glance, it does not seem that because all commodities express their value in a particular commodity, that commodity has become money. On the contrary! It seems that because that commodity is money, the value of all other commodities is expressed in it in general.” The growth of gold production, the collection of gold from society, and antiquities from museums provided the Soviet government with the conditions to peg the Ruble to gold and conduct its major foreign trade transactions in gold and other precious metals. Lenin, like other state politicians and in his usual pragmatic style, wrote an article entitled “On the Importance of Gold, Now and After the Victory of Socialism”: “The Russian Soviet Federative Socialist Republic, in the present situation, must refrain from consuming gold and learn to trade.” But he had forgotten or pretended that it is politicians, thinkers and leaders who establish the laws of the capital market, its circulation and the value produced by workers, teach economists and make the economy turn. Capital always wraps itself in an aura of ambiguity and mystery and pretends that it is capital that is the creator of all values. Its representatives in various forms of personified capital, including individuals, institutions and parties, pretend that they are gods on the earth of capital. Since when and when did partisanship and party affiliations clarify the class nature and origin of groups and individuals?! Of course, this way of looking at socio-economic phenomena and trends was the dominant type of thinking even in Marx’s time. Marx writes in the third volume: “The relationship between capital and value is laid bare in surplus value. The relation between capital and profit, that is, capital and surplus-value, appears on the one hand as a surplus over the cost-price of the commodity which is realised in the process of circulation, and on the other hand, as a surplus which is determined, more precisely, by its relation to the whole of capital, capital appears as a relation to itself, a relation in which capital, as a primitive aggregate of value, is distinguished from the other new value which it creates. This appears to consciousness as if capital had created this new value in the course of its movement through the processes of production and circulation. But how this happens is at present a mystery and seems to result from qualities inherent in the nature of capital itself. In Chapter 48 of the same book, he clearly states that “in the formula of capital-profit, or even better, in the formula of capital-wage, land-land-wage, labour-wages, in these three economic aspects, which should reveal the connection between the constituent parts and the total wealth and their source, the mystery of the capitalist mode of production, the objectification of social relations and the immediate continuity of the material relations of production completes its historical and social character: an enchanted, inverted, upside-down world in which Mr. Capital and Mrs. Land, both as two social players and simultaneously and without mediation as mere objects, are engaged in their magic and jumble.” Lenin and the other leaders of his party were so enamoured with the power and conquest of the rule of capital that they saw themselves as gods on earth, and whatever they did, it would surely be what they had imagined. They saw themselves as the heirs and founders of new relations of production that had hitherto been embodied in the minds of thinkers in the form of theory and opinion. They stated that from now on, the social existence of people would not see the builders of their thoughts, on the contrary, they believed that thoughts would create social existence. They spoke of party affiliations in general and without reference to their social and class affiliations. But all the new Turks did what the social capital of Soviet Russia required of them. They saw themselves as the heirs and founders of new relations of production that had hitherto been embodied in the minds of thinkers in the form of theory and opinion. They stated that from now on, the social existence of people would not see the builders of their thoughts, on the contrary, they believed that thoughts would create social existence. They spoke of party affiliations in general and without reference to their social and class affiliations. But all the new galloping did what the social capital of Soviet Russia required of them. The beginning of large-scale projects in the process of capital accumulation growth, increasing labour productivity and the formation of industrial giants in the Soviet Union begins with the plan to electrify industries, and along with this process, large factories begin to lay off surplus workers. This coincides with the beginning of the sale and lease of less profitable industries to their managers and former owners, so that by the end of 1922 about 7,100 enterprises are sold and leased, but due to lack of capital, only half of them is sold with 68,000 workers. This process is so rapid that the rest of these industries and work units are immediately either leased to cooperatives and state institutions or are closed down altogether. Lev Kamenev reported at the 10th Congress of All-Russian Soviets that state-owned industries and enterprises employed 3 million workers, while private enterprises employed only 70,000. The March 1923 census showed that out of 165,000 enterprises, 88.5 percent were in the private sector, with only 15 percent of the workers employed. On the one hand, this meant that small and medium-sized industries and enterprises were in the private sector of capital, and they mostly supplied raw materials, semi-capital goods, and trade to large industries and monopolies. On the other hand, their high productivity led to a reduction in the number of workers. This policy was justified by the formula of “promoting independence and initiative in industry,” which meant nothing more than the growth of labour productivity. The formation of Cartel and Trusts in certain areas of capital advance led to the formation of economic accounting for these large areas, which individual units were also forced to follow, so that low-profit units were closed and concentration in industries with normal profits increased. The first large trusts were the trusts of cotton factories and lumber companies. Their statutes forced them to control their profit and loss accounts by purchasing the necessary materials and selling their manufactured goods on the market. This meant that the forestry and agricultural units supplying the goods of these two trusts were in fact pumping the surplus value produced by their workers into them. This rule prevails in all areas of capital advance, and in the Soviet Union the formation of various trusts proceeded rapidly with this process of production, and 15 large trusts were formed in a short time. In the leather industry, a huge trust of 1,000 production establishments was formed, of which only 124 were created, which were highly profitable; the rest were either sold by the government or closed down altogether. This huge trust procured its raw materials from all livestock companies and cooperatives at reasonable prices and sold its manufactured goods in the domestic and European markets at high profits. The number of trusts formed by the end of 1922 reached 421. The policy governing these trusts, which had achieved high profitability, led to the formation of 40 trusts in the leather industry, 50 trusts in each of the capital-advancement areas of the metalworking, textile and food industries. 35 trusts in the chemical industry, 20 trusts in electricity generation and other capital areas formed an average of 10 trusts. The total number of workers in these trusts reached 850,000, of which the textile and metal industries had 525,000 workers. This number of trusts did not include the giant coal and oil trusts that were to begin a tough competition with global capital-advancement areas such as the United States and Britain in the near future. The trusts poured a significant portion of their profits into the state treasury. Each trust was paid a fixed capital and depreciation allowance, and a quarter of the profits were also allocated to it. 22 percent went to the welfare fund, 3 percent to the directors’ bonuses. In return, the trust was free to sell its goods in any market, both domestic and foreign. The opening up of companies, trusts, and manufacturing and commercial institutions to domestic and foreign competition caused a drop in the prices of industrially produced goods, and this was the beginning of widespread unemployment in industry. In the fall of 1922, Bogdanov told the Central Executive Committee that “the mines of the Donets region (metal and coal mines) have become so deficient in credit that they have been forced to lay off their workers because they do not have the cash to pay their wages.” Grigory Sokolnikov, the People’s Commissar for Finance, said, “The state can no longer assume the responsibility of paying the workers’ wages. The state’s relationship with industry is only that of a customer who pays in full for what he buys. Thus, the state and industry are completely separated, and industry must either sell its products on the market or sell them to the state on terms that will enable not only production but also the renewal of capital.” Not only had the state withdrawn from unprofitable industries, but the units of work and production, which also belonged to the same sphere of capital advance, were each separated from the other and even competing with each other. This caused prices to fall. For this reason, the syndicates, which played the role of combining and monopolizing the entire sales apparatus of each sphere of capital, controlled 70 to 100 percent of the sales of products.
Soviet trade relations with other capitalist countries, especially Western Europe and the United States, were very important. The United States was more eager to have trade relations with the Soviet Union, and in December 1919 the US Secretary of State proposed a $100 million institution to provide trade credit with Russia, and in July 1920 all obstacles to trade with Soviet Russia were removed. The Soviet Union also proposed granting concessions in Russia to foreign capitalists willing to invest, which resulted in the provision of unexploited natural resources. These included timber from northern Russia and Siberia, Siberian mines, and agriculture from southeastern Russia, thus opening the door to international competition in trade relations. A few months before the start of the NEP, a trade agreement was concluded with Britain, and Lenin spoke of opening economic relations with Germany. This was while the crisis of capitalism and unemployment, economic stagnation was raging in Europe. In 1922, Lenin spoke with great pride of the formation of 17 large mixed commercial companies with Soviet and Western European capital. The Geneva Conference, where the trade relations of European states were discussed, also invited the Soviet Union, stating that “the collective efforts of the powerful powers are necessary to cure the paralysis of the European system” and that the platform for its formation stated that “countries have no right to dominate each other regarding the principles of regulating their property system, internal economy and government”. Although this conference did not produce many results, it gave a leap forward in the capital and trade relations of Western Europe with the Soviet Union. Soviet Foreign Minister Georgy Chichiren addressed the representatives of Western Europe at this conference said: “The basic point in the policy of the Soviet government is the desire to create conditions in Russia favourable to the development of private enterprise in the fields of industry, agriculture, transport and trade… The government cannot seize any source of finance except for the same reasons as are stated in all civil laws. The question of the nationalization of foreign enterprises in the USSR was raised at this conference, and the Soviet delegation reiterated the readiness of its government to grant long-term concessions to the owners of nationalized property, the practical result of which was that capitalists would invest in the USSR in return. The most important event that occurred at this conference was the fierce competition between the big oil companies, such as Royal Dutch Shell and American Standard Oil, for the conclusion of oil contracts in the eastern basins of Russia and the Caucasus. Special decrees guarantee freedom of trade within the country; the monopoly of foreign trade is in the hands of the government. But even in the field of the latter activity, special regulations allow for the participation of private capital.” Trade and export-import of goods, although it is a state monopoly, all state economic institutions have the right to conduct transactions, export and import goods through their own agencies. Krasin reiterated in an interview in October 1922 that “the monopoly of foreign trade does not mean that all transactions should be carried out in the hands of the organs of the Commissariat for Foreign Trade, but that state organizations, cooperatives, private institutions and mixed companies should all play their part, and there should be only the supervision of the Commissariat.”
In this way, all the staging, disputes and competitions of the various sections reflect the situation that is going on in the parliaments of other parts of the world of capital, and here only the titles and names are different. In the fall of 1921, the first joint ventures with Germany were created. The Dreuter shipping company, with the participation of the Soviet government and the Hamburg-American shipping line, was established to transport goods between Germany and the Soviet Union, the Druwolf, Drumetal, Rosgertorg and a contract was signed with the Krupp company to produce tractors and industrial agricultural machinery. The various periods of economic boom and bust in the Soviet Union, like in other capitalist countries, were nothing more than the accelerated and decelerated process of capital accumulation. The fact that many writers on the history of Soviet Russia attribute this boom and bust to the two imperialist wars and the economic restriction of Western capital forgets that Soviet Russia itself was an actor in these scenes. It actively intervened in wars in order to gain a fair share of influence and to participate actively in the redistribution of international surplus values. Between these major events, it increased its sphere of influence among the countries and regions close to it, and in many cases it was successful. By founding the Comintern, it set about creating a kind of international party, of which all national parties and all left movements are in fact its agencies and branches. Bukharin said at the Fourth Congress of the Comintern about supporting Soviet Russia. “I say that now we are so great that we can conclude an alliance with a foreign bourgeois state in order to overthrow another bourgeoisie through this bourgeois state… Assuming that we have concluded a military alliance with a bourgeois state, the duty of the comrades in each country is to help this alliance win.” Leaving aside all the demagogue and leftist rhetoric, the Soviet Union blocked Western capital in its strategy of creating a capital bloc in the East. This was not just talk, but also action. This was just the beginning of supporting strong national states and the bourgeoisie of newly founded countries or previously unstable states against social changes and other capitalist interventions. As it was said during the Reza Khan coup, the direct interests of Soviet Russia were a strong and centralized state. The Soviet Union also applied the same policy to Afghanistan and Turkey. Regarding India, which had always been of interest to the Tsars throughout Russian history, the Soviet Foreign Minister Chicherin addressed the British Empire in December 1922 as follows: “You are upset because our horsemen have again appeared in the Pamir highlands, because you no longer have to deal with the stupid Tsar, who in 1895 ceded you the Hindu Kush ridge. But what we offer you is not war, but peace on the basis of a wall that must be built between us.” Leaving aside all the demagogic and leftist rhetoric, the Soviet Union blocked Western capital in its strategy of creating a capital bloc in the East. This was not just talk, but also action. This was just the beginning of supporting strong national states and the bourgeoisie of newly founded countries or previously unstable states against social changes and other capitalist interventions. As it was said during the Reza Khan coup in Iran, the direct interests of Soviet Russia were a strong and centralized state. The Soviet Union also applied the same policy to Afghanistan and Turkey. Regarding India, which had always been of interest to the Tsars throughout Russian history, the Soviet Foreign Minister Chicherin addressed the British Empire in December 1922 as follows: “You are upset because our horsemen have again appeared in the Pamir highlands, because you no longer have to deal with the stupid Tsar, who in 1895 ceded you the Hindu Kush ridge. But what we offer you is not war, but peace on the basis of a wall that must be built between us.” Of course, such a wall was not economically and politically weak on the part of the Soviets, because the formation of the fraternal Communist Party in India and close economic relations, especially in the field of metals, steel, etc., brought great benefits to the Soviets. The fundamental difference between Soviet policy and that of Britain in Asia and Africa was that Britain supported the Khans, influential families, to consolidate and continue its dominance, and that of the Soviets supported the young national forces, the nascent bourgeoisie. The stirring up of national spirit was also one of the means that the fledgling Soviet republic did not neglect. Zinoviev wrote about the Polish invasion of the Soviet Union in 1920, “The war is becoming national. Not only the advanced sections of the peasantry, but even the wealthy peasants are opposed to the machinations of the Polish landowners… We communists must advance in the forefront of this national front, which enjoys the support of the entire population and is growing stronger every day.” Of course, Russian patriotism and its use in international competition are a legacy that Russian state capitalism cannot ignore. In November of the same year, Lenin said at the Moscow Party Congress regarding the Polish war: “We not only have an opportunity to breathe a sigh of relief. We have reached a new stage and have secured our fundamental position within the framework of the capitalist state.” The agitation of Russian nationalism intensified in the following years and became one of the main axes of the Comintern, so much so that when the Soviet government lost hope of cooperation from social democracy and the fraternal parties of Western Europe, it became its only foreign policy. This was the precursor to the creation of a buffer of allied countries bordering the Soviet Union. The coup of the Red Army in Armenia and the formation of a government with the Dashnaks, the conclusion of an alliance with Kemal Ataturk, which even aroused criticism from the Mensheviks that the Bolsheviks were stirring up nationalist sentiments. The establishment of the Republic of Georgia by the Red Army and the national forces of this region, along with the strengthening of the Soviet position in the Caucasus.
Let us return to the process of progress and expansion of capital accumulation in the vast Soviet bloc. The five-year plans caused such growth in this field that from the beginning of this stage until the Second Imperialist War, more than 9,000 large industrial units were built and put into operation. Tractor production increased, power plants helped electrify the entire vast region, steel complexes expanded so that the Soviet Union became one of the major producers of capital in this field. Automobile factories with foreign joint capital were established. Foreign companies such as General Electric, the American Radio Company, Ford Motors, Harvester International, and Dauphin Dinmore’s made investments in Soviet Russia between 1927 and the early 1930s. If the economic crisis of 1929 led to a halt in production and a confusion of capital in Western Europe, in the Soviet Union these wandering capitals of the Western world made large investments in search of high-profit treasures. Almost simultaneously (in 1930) millions of rural workers came to the cities to build industries, build buildings and build roads. The result of all this was clear from the very beginning. The annual volume of exports between 1924 and 1928 increased from 7 million 86 thousand tons per year to 21 million tons in 1930 and 22 million tons the following year and reached 35 million tons in 1940. In 1928, exports of wheat and other grains accounted for 7 percent of total exports, oil and its products for 16 percent, wood and its products for 13 percent, and hides and furs for 17 percent. Gold production, which played a major role in Soviet foreign trade, was about 28 tons in 1928, and by 1938 it had reached 100 and even 200 tons per year. Apart from this, the capitalist state had managed to increase its gold reserves by purchasing gold and precious metals from citizens and foreigners by about 21 tons in 1932 and about 45 tons in 1933. In addition, it obtained about 2,730 museum paintings and a total of about 25 million Rubles in gold from the sale of works of art. Although capital accumulation in agriculture and livestock products had grown enormously in the Soviet Union after the Second World War and had led to the emergence of gigantic agro-industrial corporations, farm capitalism, not only in the Soviet Union but also in the entire Eastern Bloc, from Hungary, Poland, East Germany to Czechoslovakia, etc., was clearly lagging behind the growth of urban industries, and the latter had grown much more than agriculture and industries, so that these large and small units in none of the Eastern Bloc countries were able to produce the same dimensions of agricultural and livestock goods that the Western Bloc of capital, namely Western Europe and the United States, were able to produce goods for both capital and personal consumption. On average, in the 1970s and 1980s, the Soviet bloc imported between 30 and 40 million tons of grain, 800 to 900 thousand tons of meat and animal products, and 400 to 500 million eggs annually from abroad. For food and agricultural raw materials, the vast country had to import 20 commodities that social capital needed. None of these commodities came from Eastern Europe, but from other capitalist countries, since at the same time East Germany imported 3 million tons of grain and 100,000 tons of meat annually, Czechoslovakia 1 million tons of grain, and Poland 2 to 3 million tons of grain and 100,000 tons of meat annually. One obvious reason for this situation was the backwardness of production techniques and labour productivity in the agricultural and livestock sectors in the Eastern Bloc of capital. So much so that in Hungary the number of workers working in small agricultural units was only 10 percent higher than in large agricultural and industrial units. The value of the products of these units is one third of the total value produced in agriculture and constitutes 50 percent of the gross rural product. While the progress of technology and the growth of labour productivity in agriculture and industrial animal husbandry in Western Europe and America had an astronomical growth after the Second World War and increased the efficiency of labour on the land astronomically. It is certain that due to the high number of agricultural workers per labour unit, the amount of surplus value produced by them was high, but the total social capital of these countries shared the same profit with the capitalists of the Western bloc. For example, decades had passed since the dominance of the state-owned centralized production method and various cooperatives in countries such as Poland and Yugoslavia, but peasant households still lived in rural areas (in Poland, 2 million 900 thousand rural families in the 80s) without the productivity of their labour and the efficiency of individual farmers with small plots of land to produce products beyond the needs of the household. The same conditions are conceivable for rural households in Yugoslavia. In this country, semi-poor peasants who were unable to employ wage labourers owned 83 percent of the arable land, 85 percent of the livestock, and about 95 percent of the labour force. This same system, after decades and generations, had led to the division of land based on inheritance and the fragmentation and fragmentation of agricultural land. The number of households owning less than 2 hectares of land increased by about 11 percent between 1949 and 1981. In Yugoslavia, there were various types of cooperatives (cooperatives with financial capital that provided credit and loans to peasants and even medium and large landowners, cooperatives that provided loans to poor peasants for the purchase of fertilizer, seeds, and small machinery, and state cooperatives that did the same for large landowners and large state and private agro-industrial enterprises). However, they did not have any positive effect on increasing labor productivity because in most cases it was not possible to increase production in a small rural production unit. In Poland, middle and poor peasants (with less than 5 hectares of land and without the possibility of hiring wage labourers) accounted for 75 percent of agricultural land and approximately the same human resources. It can be said that after the formation of the Soviet satellite countries after the Second World War in Eastern Europe, the poor masses, who were generally workers who partly earned their living from their small plots of land and partly by selling their labour in industries and agriculture, had the same form of land ownership and agricultural production as before the war and had undergone few changes. This is while the growth of labour productivity in agriculture in Western Europe and the United States, which was also generally industrial, has been leaping, especially after the Second World War, and is on average 2 percent per year. Although this number is small, this growth should be considered in relation to the level of social capital accumulation of these countries in the agricultural and livestock sectors.
The growth of agricultural production in the ten member states of the European Community (West Germany, France, Italy, the Netherlands, Belgium, Luxembourg, the United Kingdom, Ireland, Denmark, and Greece) between 1970 and 1985 began with the need to import most of these goods and ended with a gradual increase in production and exports. These goods, which include six agricultural goods (wheat, barley, corn, fruit, vegetables, grains other than rice) and generally capital and industrial goods such as sugar, oilseeds, vegetable oils, various types of meat, butter, and powdered milk, and milk, have become export items of social capital for these ten countries since the early 1980s. This is despite the fact that these countries had a lower population growth rate than Eastern Europe (source: European Commission). In many of these goods, the ten European countries are the first or second largest exporters of these products. At the same time, the employment rate of agricultural workers decreases during this period.
Agricultural workers population of the European Commonwealth (ten countries) in thousands
At the same time, the use of agricultural machinery is increasing.
Source: Eurostat
The average reduction in the agricultural workforce in these ten countries has been 3.6 percent over the past 25 years, which is synonymous with the increase in machinery and the use of agricultural machinery. The growth in the use of threshing machines and milking machines was very high in the 1950s and 1960s, but it gradually decreased and remained at a horizontal level. The capitalist crisis in the 1970s and the reduction in investment in agriculture and animal husbandry is an important factor. Another factor in the progress of machinery is in terms of labour productivity. Milking machines and dairy production, especially in the 1970s and 1980s in Europe, underwent a great technical development. When talking about increasing labour productivity, there is no other meaning in mind than that fewer workers use more capital. The entire motivation of capital and capitalists is to earn profits at the lowest possible cost. It should be noted here that the use of agricultural machinery is only one of the factors that increase labour productivity. Other factors are the use of chemical fertilizers, the increased use of pesticides, genetically modified seeds, etc.
Considering that 90% of the food in the world is obtained from agricultural capitalism and the rest from marine products, there are huge profits in this field of production that no capital can ignore. The owners of these capitals, as is the nature and essence of capitalist production, have all named their search for greater and more golden profits in “serving” humanity, here “serving human health” and feeding the hungry!! Commodity production and its most advanced form, capitalist production, are the origin, the stimulus and the full mirror of the fetishist role of the product of human labour. The very replacement of the relationship between humans with the relationship between objects and commodities implies that the commodity or capital becomes everything and man becomes nothing. The focus of our present discussion is also that under the rule of capital, the worker, his food and the land, as far as the needs of human life are concerned, proceed in the process of becoming nothing, and instead it is capital that accelerates the dynamic of fulfilling its divine role to the highest infinity. Commodity fetishism is the inevitable result of the separation of man from labour and the product of labour.
Barley production kilograms per hectare per year
Agricultural productivity growth in Sweden over two centuries Source: Swedish Agricultural Organization 1
During the 20th century, agricultural production made progress in increasing labour productivity per hectare of land (barley production rose from 1 ton to 1.3 tons per year at the end of the century). Labor productivity on land increased simultaneously with fertilizer production and consumption, so that from 1950 to 2012, total agricultural labour productivity increased from 2,200 kilograms of barley per hectare in 1950 to 4,400 kilograms in 2012. After the Second Imperialist War, agricultural production underwent major changes, and increased labour productivity led to the expansion of large-scale agriculture, with huge fields being plowed, planted, and harvested by giant machines. Irrigation systems were developed and water supply barriers were eliminated. One of the important results of the agricultural transformation based on chemical fertilizers, which eliminated the need for animal manure, was the expansion of the division of labour in agriculture. Thus, agricultural lands became specialized for specific crops (specific chemical fertilizers for specific crops) and animal husbandry was separated from plant agriculture, or in fact, the capital invested in agriculture did not need to maintain animals and their fertilizers, and on the other hand, the production of chemical fertilizers itself opened up a new field for capital. So that this field began to mass produce this commodity without the direct intervention of industrial agriculture. These major developments led to a further increase in labour productivity in the production of plant, livestock, and fruit products.
Increase in grain production (kilograms per hectare) of traditional agriculture between 1982 and 2010 1
Although large industrial agricultural enterprises are increasingly reducing their dependence on labour and replacing it with machinery, their profits are increasing year by year. These industrial agricultural units produce goods such as grains, wine, milk, and various types of meat, and according to Eurostat statistics, the larger the size of their farms, the greater their income and profits and the greater their growth. This is while these same large units are increasing their fixed capital astronomically and using more advanced machinery year by year. In this case, although the amount of surplus value produced by the workers of these units is decreasing, the profits of the companies are increasing. This means that after the average rate of profit is balanced, they are swallowing up an increasing share of the surplus value produced by medium and small units, with a more basic level of production and a lower organic composition. The continuous growth of production of these companies occupies an ever-increasing share of the market for these types of goods, the rapid increase in average labour productivity ends up in favor of agricultural and livestock-industrial giants. Simultaneously with this growth of capital accumulation, the elimination of small and even medium-sized capitalists has been a continuous process in Europe, and none of the auxiliary means of the European capital governments, including commodity subsidies, tax reductions, and assistance from the central organizations of the European common market, has stopped this process and the process of bankruptcy and collapse of small and medium-sized farmers and farmers. It should not be forgotten that almost all agricultural advice on production planning, marketing, and production of this type of goods is provided by the government, the support of governments and the central organization of European governments, and in most cases, there is no cost to these producers. These costs are paid by the governments from taxes and various levies on workers’ wages. Another way that European capitalist governments counter the collapse of small-scale capitalism is to familyize these areas. This means that governments help small capitalists by allocating cheap credit and loans (low interest rates) to continue industrial production in these areas by purchasing agricultural and livestock industrial equipment on credit. This of course reduces the number of wage workers, but in return, the tools and land remain within the boundaries of the farmer’s family. In this way, the number of wage workers reached 15 percent in the late 1980s. These policies, and especially the large subsidies to the entire agricultural and livestock sectors, slowed down the capital flight process in the late 19th and early 20th centuries and even stopped this process, so that after the Second World War we are witnessing a return of investment in this area. The policies of the capitalist governments of Western Europe have caused the prices of goods produced in these areas to increase, while with the growth of labour productivity, the continuous increase in the organic composition of capital, the widespread use of machinery, and the tremendous growth of capital accumulation, we should witness a decrease in the prices of goods produced in these areas of capital advance!
What is currently characteristic of industrial agriculture in Western Europe is the scale and capacity of mass production, and since governments have kept agricultural production at such a high level by implementing subsidies and other capital assistance, it has created numerous problems for marketing and export. Storing agricultural goods for export at the right time, providing huge export credits has caused prices to rise so that items such as wheat, sugar, meat, dairy products, and the like can hardly have a continuous and permanent export market. The volume of expenditure of the European Agricultural Guarantee Fund (EAGF) to help the market for these products is constantly increasing, so that from 1982 to 86 it increased from 12.4 billion to 22.9 billion European currency units.
Reference
1. Jordbruksstatistisk Årsbok (2011) Jordbruksstatisttik med data om livsmedel. Statistiska centralbyrån, SCB, Örebro, Sverige. http://www.scb.se/pages/PublishingCalenderViewInfo 259923.aspx?PublObjld=15861
Books used in this chapter: History of Soviet Russia by A. H. Carr (all three volumes), History of the Soviet Economy to Modern Russia by Valentin Katasanov
Hassan Abbasi