Joseph Stalin's Economic Problems of Socialism in the USSR: An Informal Review

I’m putting this out there. You might have heard of Joseph Stalin. I read his essay, Economic Problems of Socialism in the USSR, from 1951. I also read two responses to that essay, by Italian Marxist Amadeo Bordiga and Chairman Mao Zedong of the CCP. As for myself, I’m a Marx and Lenin enjoyer, but I’m trying not to knock anything until I’ve tried it.

Stalin’s central argument is that not only does commodity production continue into socialism by virtue of it being a transitory state of things on the road towards communism (is this disagreeable?), but that it is possible and even beneficial to organize society around commodity production without it being or becoming capitalism (hm).

I don’t think I’m going to convince any Stalin enjoyers from not being Stalin enjoyers, but I hope my commentary at least articulates why one might disagree with his view of the commodity. Please read my previous post, “What is Marx’s Critique of Value?”, prior to this one if you are new to the topic of capitalism and the commodity form. I worry that if you're not familiar with the universe of discourse, this is all going to go over your head. But it’s not you. It’s me.

My Hunch

Stalin’s line of thinking seems to be:

1. There exists commodity production in non-capitalist economies.
2. The USSR is socialist because there are no capitalists, and property is owned by the ‘people’ (i.e., the state as the representative thereof [1]). This is regardless of there being commodity production.
3. Marx’s analysis of commodity production in Capital does not apply to socialist economies because they are not capitalist.
4. Socialist commodity production is categorically distinctly from capitalist commodity producing.

The first point is fine, and not incorrect per se. Stalin is right that there was some degree of commodity production in Europe during feudal times when the economic relation that predominated over society was rent. In fact, commodity production often pops up wherever money does (in the sense that money often originates as a measure of value prior to eventually becoming a medium of exchange proper) [2]. Stalin’s hope is to compare the USSR’s economy to past economies which also had some degree of commodity production without being capitalist. I think this is reasonable insofar as you can’t build communism in a day, although Stalin seems to say that the law of value is a transhistorical law of economy that cannot be abolished in a meaningful sense, but is meant instead to be harnessed by a socialist government. He does contradict this proem in Chapter 3 when discussing the difference between the first and second phases of communism (the latter having no value and no commodity production), but then in Chapter 7 he reiterates that the law of value exists prior to capitalism just as it continues to exist after the (ostensible) overthrow of capitalism in Russia. Let’s take Stalin in the best faith that eventually commodity production will be abolished or, at least, not be the ordering principle of the economy.

I think the second point is totally incorrect. I have seen some people say that Capital is all about class in that it considers, if fleetingly, workers and money-holders (i.e. capitalists). Although it is technically true that those roles are mentioned, and of course exist in advanced capitalist society, Marx’s analysis does not hinge on the existence of two discrete classes. He focuses instead on modeling the circuit of capital starting from the commodity as its basic unit of interaction (itself already containing, or presupposing, all the social relationships of capitalism). The analysis, being abstract, applies just as well to a petit bourgeois person who invests their own money and employs their own labor, or to a cooperative firm owned by its workers. Indeed, the capitalist is none other than a human representative of capital which exists besides the capitalist. The antagonism between capitalist and worker is, by extension, a personification of the antagonism between capital and labor. Therefore, it cannot follow that an economy without a distinct property-owning class must be non-capitalist. A non-capitalist economy, barring transitional states, must strictly be one that is not predominated by commodity production and the generation of value, at least within the scope of Marx’s analysis. It so happens that the USSR’s economy was indeed predominated by commodity exchange, as Stalin lays out for us.

Stalin’s analysis of socialist commodity production, as something distinct from capitalist commodity production, is also lacking. I have suggested in an earlier post that it is impossible for an economy to be oriented around the circuit of commodity exchange but not also the circuit of capital [3]. To summarize, the circuit of commodity exchange does not explain where new commodities come from. This is only described by the circuit of capital which models the creation of a commodity and, by extension, the creation of new value. It is impossible to have commodity circulation without commodity production, and it is impossible to have commodity production without some conjecture of value. If commodities were not produced, they would run out. If a new commodity did not produce new value, it is categorically not a commodity. Stalin is aware that the law of value is still in effect, but since (he says) the economy is socialist, the implications of a capitalist economy are absent. In what way?

Stalin clarifies his position in Chapter 7. He claims that the law of value in itself is not indicative of capitalism, but rather he defines capitalism very specifically as the pursuit of maximum profit as opposed to the pursuit of surplus value. Reading this set off some sort of alarm in my head! Like, yeah, surplus value is abstracted by profit, and firms seek out greater profits because that’s basically all they can see (even if profit is grounded in surplus value). But how is surplus value measured if not, literally, as profit, as the difference between money invested and money received? More importantly, Stalin seems to ascribe the faults of capitalism to a conscious effort on the part of capitalists to seek profit. However, Marx criticizes capitalism as a system bound to collapse due to its conflicting but twin tendencies to become more efficient while reducing its ability to create new value. Maybe Stalin is claiming that the national socialist economy uses its technological advancements to automate work and reallocate labor to more valuable tasks, but that is already just a move that a well-managed firm would make because it generates more profit (and value!), especially when there are so many opportunities to expand as in a developing country without competition. To be clear, this is a great strategy to industrialize and develop an area’s productive forces; why not call it as it is? Isn't the difference here not between capitalism and socialism, but international (imperial) capital versus national capital?

Stalin distinguishes between socialism and capitalism insofar as socialism seeks to meet the greatest social utility rather than generate the greatest profits (as if to say, “People over profit.”). Again, it seems to come from identifying capitalism with the existence of a capitalist class rather than with generalized commodity production. Stalin is preoccupied with the conscious intent of economic agents rather than with the structural features and tendencies of the economy, both national and international. Capitalism and socialism may have very different motivations, but they operate in the same manner as conceived by Stalin. Therefore there is no reason that the self-annihilatory tendencies of capitalism, in its general form, should not also exist in the economic system of the USSR.

The USSR

But a critique of Stalin’s ideology is not as important as a critique of what is actually taking place behind the scenes, or what the ideology is trying to narrate. Like, I don’t think Stalin is confused as much as he is trying to rationalize his government’s policies when they are nominally socialist. Stalin claims in the introduction that the USSR abolished exploitation (?) and created a new form of economy while harnessing the law of value (!?) rather than abolishing it (!!!). There is no ‘anarchy’ of competition among firms, but the singular state which employs the law of value on a national scale. As discussed, we have no reason to believe that the state is not a typical (if monopolistic) firm when it otherwise acts in the capacities of a firm (if one with social responsibility). Stalin says there is no private ownership in the USSR, nor is labor time a commodity on the open market, thus there is no capitalism in the USSR. But if there is only one firm in the country which claims property ownership, which employs labor, which produces commodities, and which sells them to its own employees as well as to outside firms, how is this not a standard firm (albeit, again, with social responsibility)? Can one be unemployed while working at Walmart?

Stalin seems to be a social democrat who believes that the national society has, to some extent, seen all the transformation that is possible for the time being. To be fair, Stalin does compare the conditions of pre-Soviet Russia to those of capitalist England in order to argue that the USSR could not socialize all industry in the way that Marx and Engels thought would happen in more developed countries. This is where Stalin refers to Lenin’s economic plan to socialize industry but continue to develop agriculture, meanwhile retaining exchange since it’s agreeable to the peasants with whom the state is trying to build a working relationships. But, for Stalin, the situation is more permanent than not, owing to the scientific laws of economy which cannot be overcome by force of will. Stalin’s main goal here is to find reasons that Marx’s critique of political economy do not apply to the social organization of the USSR, but instead he gives us a checklist of reasons why the USSR is just a firm.

Whether the USSR was working towards the abolition of commodity exchange to any degree is an argument about history that I myself am not equipped to answer. However, as far as Stalin was concerned, that was not a question that needed an answer. I agree with Lenin that Russia in its semi-feudal state did not have the conditions necessary to socialize, and his outline to work towards industrialization in the field of agriculture is not a bad one. Capitalism is good (or, specifically, a progression over feudalism)! But Stalin’s own argument, that neither the law of value nor commodity production can be abolished (again, it seems like he has two opinions), does not follow from Lenin’s own view of the temporality of the situation. He also does not distinguish ‘socialist’ commodity production from ‘capitalist’ commodity production in a meaningful, structural, and formal sense, but only nominally on the basis that one is ‘social’ and the other is not. His view that the socialist economy has tamed the law of value within its own bounds is not unlike the liberal perception of the same thing in liberal society, insofar as such firms may think of themselves as having social responsibility to which their activity is but a means to an end. There are even industries in capitalist countries which are not really profitable but which are so socially necessary that they must exist, especially agriculture which has always proved difficult to turn a buck on except in mass ownership. Perhaps the USSR has a better claim to social responsibility than other firms, especially while operating in not just one industry but many at the same time. But a quantitative difference does not make a qualitative or structural one.

The existence and valorization of distinct classes in the USSR is also an indicator that communism is not yet in sight. Stalin indicates that in liberal capitalism there is an antagonism between the country and the town as well as between physical and mental (i.e. managerial) laborers. But rather than discuss how these distinctions are being abolished, Stalin praises how instead members of these distinct groups have become friends (!) instead of enemies under the common banner of socialism. He even goes as far as to say that rather than abolishing the division between the town and the country, the USSR plans on founding new towns with which to keep improving the mutual relationship between workers and peasants. Stalin points out that even in communism, there will still be a difference between different kinds of labor (agricultural versus non-agricultural, or physical versus mental), and that the goal is more accurately to eliminate social distinctions between those kinds of labor. But Stalin does not distinguish between the literal use-case of a labor task versus the social role of that labor. He talks like the goal is just to eliminate enmity between these categories, rather than eliminating their particular socioeconomic relationships (peasants and managers being typically personifications of capital in their dimensions as property-owners or managers thereof). This is not abolishing class antagonism, but encouraging class cooperation, even if under the pretense that it shall usher in socialism.

To be clear, I do not intend for this to be a semantic argument. I fully accept that the early stages of socialization will have a degree of residual capitalist development, or that non-industrial countries must industrialize in order to be capable of working towards communism. But it is still capitalist. If the law of value is intertwined with commodity production, as Stalin points out, and if the ultimate goal is to abolish the law of value (which he goes back and forth on, it seems), there should be no qualms in saying that the USSR is still capitalist at this point or, more properly, a capitalist firm. It’s not a moral judgment; it just is what it is. Whether the USSR was working towards that ultimate goal, though, is both beyond my knowledge and besides Stalin’s point.

Other Views

Next, I’d like to look at criticisms of Stalin by Bordiga and Mao who both disagree with Stalin, albeit for different reasons that also happen to set those two apart from each other. If you’re familiar with me then you’ll know that I’m more sympathetic to Bordiga, but I want to give Mao a fair shake as well. At least, it’ll help get a fuller picture of the discourse surrounding Stalin’s essay.

Bordiga: Dialogue with Stalin

In order to continue the debate, it is not even necessary for [Stalin] to know our theoretical organs. The things and forces – whether large or small, past, present or future – remain the same, despite the whims of symbolism. When the ancient philosophy wrote “sunt nomina rerum” (literally: the names belong to things), she wanted to say that things do not belong to the name. Translated into our language, this means: the thing determines the name, not the other way round. You can continue to dedicate 99% of your work to the name, portraits, epithets, lives and graves of the great men: we will continue in the shadows, knowing that soon the generation will come who will only smile at you, you famous men of the great and very small calibre.

But the things between the lines in Stalin’s writing are too important for us to deny him the dialogue. For this reason, and not from a “á tout seigneur tout honneur,” we answer and expect the new appeal – even if it takes another two years, because we don’t have a hurry (isn’t it true, ex-Marxist?).

I think the above bit is pretty funny. It’s very Lenin-esque dunking, and also summarizes the thrust of Bordiga’s critique: that Stalin is ascribing socialist qualities to the USSR because it’s nominally socialist, rather than starting from describing what is. In particular, he affirms the notion that capitalism is defined as predominant commodity production, that the commodity form implies the law of value, and that value is not a thing but a social relationship between people. Moreover, the social relation encoded in the commodity in its predominance is not transhistorical, but has been preceded by others, and will be succeeded by communism. More than being a question of semantics, such as whether a socialist party can oversee capitalist development, the question is whether the aim of the party’s historical mission is to abolish the commodity or not. Stalin is not making a concession that commodity production will persist during a transitory period, but rather he is arguing that its existence is not diametrically opposed to socialism and may even benefit its pursuit.

Bordiga points out something interesting on this note: that the USSR is not even state capitalist, being full of small and medium firms whose expropriation Stalin says would be a crime. The necessity of commodity production and exchange is justified by its own present existence, in that it is currently the only way in which the classes (!) of the USSR interface with each other (state workers, firm workers, peasants, etc.). The form of the peasant cooperative in Russia even predates the USSR and, as Lenin argues in The Development of Capitalism in Russia, does not anticipate socialism as much as it does private ownership of a cooperative firm [4]. All this is exemplified by Stalin saying that Engels was not clear about whether all, or merely some, private property should be expropriated. “Caramba!”, Bordiga exclaims. Where is the seizure of property? Where is the abolition of the commodity? Where is the revolutionizing of society by the dictatorship of the proletariat?

Stalin’s conception of history, Bordiga argues, betrays the classically bourgeois character of his program. There is on one hand his assertion of the existence of ‘the people’ or ‘the nation’. This is not just indicative of his position contrary to international revolution, but also of the character of that country: containing a “mishmash of different classes”, organizing towards the cooperation of those classes, and being ultimately beholden to the social relationships that exist between them (if not to the interests of one class in particular, which generally follows). There is also Stalin’s view of laws of society, that certain ones—such as the law of value—exist without being tied to any one evanescent social system. Meanwhile, the country itself is still undergoing the process of capitalist development, turning serfs into proletarians and turning products into commodities.

For Bordiga, the USSR is not only a capitalist country, but a typical one. Its overall aim is to establish a developing ‘socialist’ market alternate to the western one which is already highly developed. He says, “do us the favour to omit the adjectives ‘Marxist,’ ‘socialist’ and ‘communist,’ and instead use ‘economist,’ ‘populist,’ ‘progressive,’ and it fits like a glove.”

Mao: Critique of Stalin’s Economic Problems Of Socialism In The USSR

Mao is coming from the same place as Stalin in many respects, but he disagrees with the thrust of Stalin’s ideology and method. He reads Stalin as being too authoritarian in a sense, not putting enough faith in the masses or (in particular) the peasantry. He also indicates that Stalin does not talk enough about the practicalities of socialism as defined by himself, especially how to plan the economy. Yet Mao agrees on one thing for certain, namely that commodity production is an essential aspect of the economy… especially because the peasants like it, and the peasants are productive because of it!

At present there is a strong tendency to do away with commodity production. People get upset the minute they see commodity production, taking it for capitalism itself. But it looks as if commodity production will have to be greatly developed and the money supply increased for the sake of the solidarity of several hundred million peasants. This poses a problem for the ideology of several hundred thousand cadres as well as for the solidarity of several hundred million peasants. We now possess only a part of the means of production. But it appears that there are those who wish to declare at once ownership by the whole people, divesting the small and medium producers. But they fail to declare the category of ownership! Is it to be commune-owned or county-owned? To abolish commodities and commodity production in this way, merely by declaring public ownership, is to strip the peasantry. At the end of 1955, procurement and purchase got us almost 90 billion catties of grain, causing us no little trouble. Everyone was talking about food, and household after household was talking about unified purchase. But it was purchase, after all, not allocation. Only later did the crisis ease when we made the decision to make this 83 billion catties of grain. I cannot understand why people have forgotten these things so promptly.

I mean, yeah. Commodities are the most effective way to produce and distribute products, especially in a developing country. There’s little point in declaring public ownership if there’s not anything to own, and given the lack of social organization and technology it would certainly make things worse. Of course, peasants managing their own production and finances is the most effective way of accumulating commodities (and, by virtue of that, use-values) at this stage of socioeconomic development. But why do we have to call this socialism? Can’t we acknowledge that capitalism doing its thing is not a bad thing in some respects, without saying that it’s socialism if it’s good but capitalism if it’s bad?

This point is entirely correct. We no longer have such circumstances and conditions. There are those who fear commodities. Without exception they fear capitalism, not realizing that with the elimination of capitalists it is allowable to expand commodity production vastly. We are still backward in commodity production, behind Brazil and India. Commodity production is not an isolated thing. Look at the context: capitalism or socialism. In a capitalist context it is capitalist commodity production. In a socialist context it is socialist commodity production. Commodity production has existed since ancient times. Buying and selling began in what history calls the Shang [“commerce”] dynasty. The last king of the Shang dynasty, Chou, was competent in civil and military matters, but he was turned into a villain along with the first emperor of the Ch’in and Ts’ao Ts’ao. This is wrong. “Better to have no books than complete faith in them.” In capitalist society there are no socialist institutions considered as social institutions, but the working class and socialist ideology do exist in capitalist society. The thing that determines commodity production is the surrounding economic conditions. The question is, can commodity production be regarded as a useful instrument for furthering socialist production? I think commodity production will serve socialism quite tamely. This can be discussed among the cadres.

I’m just sharing full passages now because, besides being tired of reading and writing on this whole thing, I think that Mao’s perspective speaks for itself. That being said, notice the focus on capitalists as a class restricting or monopolizing commodity production from others. There are certain echoes of Lenin’s Imperialism here, in that capital concentrates into fewer hands as the economy progresses; but whereas Lenin attributes this to the historical development of generalized commodity production (i.e., as pools of capital compete with and eventually absorb each other), Mao seems to take as his basis that commodity production is a historical constant while capitalists are responsible for its negative effects.

Again, is all this just a hesitancy to admit that capitalism has any positive effects, such that they do not attribute them to capitalism at all but to a fundamental ordering principle of it (which, conveniently, does not have to develop into capitalism)? Does this not imply that the issue is not with the very dynamics of the commodity (however dormant they lie) but the intent with which owners of capital produce value? I do not think this constitutes a structural critique of capitalism anymore, as much as an ideologically-grounded critique of a highly centralized, developed form of capitalism which has lost the pizzazz of a less advanced form (or perhaps of a less advanced form that was never allowed to develop, owing to the investment and influence of foreign capital).

Even the capitalists believe “Competition rules, monopoly drools!” – and tremble.

Conclusion

This is not about ideological purity. This is not about whether the USSR was historically progressive. This is not about whether commodity production, and exchange by extension, is beneficial or detrimental to any given society. This is not about whether the commodity form has existed in pre-capitalist societies or will continue to exist during the transition to communism. This is about whether Marx’s critique of the commodity form, from which he derived his critique of capitalist economy, holds for developing markets, and whether history is a product of strong-willed intention or material interest (as expressed in social organization and antagonism).

I don’t think that Stalin’s work embodies class struggle, material analysis, or ruthless criticism. Back then, its analysis amounted to a pseudo-Marxist cope of the path that the USSR was necessarily going to take in its then-current state (isolated, semi-industrial, etc.). Now, its analysis is still a cope, but the conditions which led to that analysis are almost nowhere to be found. There are no more big feudal or semi-feudal countries (to my knowledge) because they almost all had ostensibly communist (more generally, democratic) revolutions, and then many of them industrialized to a fine degree. Agriculture meanwhile has not just industrialized but globalized, allowing countries with poor agricultural capability to import products from other places and free up their own labor force to work at other more profitable industries.

Owing to these conditions, I think it’s more worthwhile to consider how they can be reorganized towards use rather than exchange (while also finding some balance between global cooperation and local development, in the likely scenarios where the former might be less efficient in terms of time, resources, and ecology). We don’t have to worry as much about appeasing a peasantry to convince them to eventually soften up to industrialization and socialization, except in areas where capital is already doing the hard work of social transformation. This does not mean that the transition to communism will not have vestiges of capitalism (although we have a better head start than the USSR), but that also does not mean we should be afraid of calling a duck a duck.

I hope that capitalism—the immense accumulation of commodities—continues to revolutionize and socialize production in the interim.

Endnotes

[1] Here I thought that the state was the vehicle of organized class repression, but you learn new things every day.

[2] I discuss this in a review of David Graeber’s book Debt: The First 5,000 Years (2022-08-02).

[3] Refer to my previous post about “markets without capitalism” (2022-07-12).

[4] That’s me saying that, not Bordiga. I just thought it was an interesting connection. Love Lenin.