The last phase of the socialist Soviet Union under Stalin was marked by the programme of gradual transition to communism over three five-year plans. In this situation after the 19th Congress of the CPSU of 1952, Mikoyan and Molotov both came under a political cloud. As is evident in his memoirs Mikoyan confronted Stalin in his opposition to the gradual transition of Soviet trade to direct products exchange between Soviet industrial enterprises and the collective farms. Molotov, in a Plenum, was charged by Stalin of ‘Rykovism’ for his commitment to the application of commodity-money relations in questions of agriculture in the transitional phase to communism. It is also clear, too, from his interviews with Feliks Chuyev, that Molotov was not in agreement with the programme of communism articulated by Stalin.Between 1953 and 1958 generalised capitalist commodity production was constructed in the Soviet Union as is evident from the archives of the Gosplan. Centralised directive planning under Gosplan was decisively terminated between 1953 and 1955 and replaced by a system of decentralised ‘co-ordinated planning’ of the Central Ministries and the Union Republics. The directors of state enterprises were given greater powers at the expense of centralised planning. They gradually were to be transformed into independent private producers. The new criterion of efficiency of the industrial enterprises and the state farms was their profitability. This ended the earlier understanding of the Stalin period that sought profitability of the enterprises in the country as a whole but not necessarily of individual enterprises. In later years after the 20th Congress, and after the removal of Molotov and Kaganovich, the products of Soviet industry in 1958 were categorised as commodities circulating within the state sector. A series of organisations were established under Gosplan for the sale of the products of Soviet industry. While genuflection was exhibited to the transition to communism, as in the 1961 party programme, effectively the underlying notions of a ‘market communism’
The speech by Molotov of September 1953 is in consonance with the turn to the commodification of the Soviet economy. It implicitly negates Stalin’s views of a non-commodity-money approach to industry and agriculture which stressed the need for gradually transforming the relations of production of the Soviet Union in the transition to communist society. Molotov lambasted the soi disant one-sided ‘superindustrialisation’ of the Stalin period in the Soviet Union and the People’s Democracies of Central and Eastern Europe which, allegedly, neglected agriculture. Molotov approved of the ‘amendments’ to the Soviet economy in the first few months after Stalin which terminated the ‘grandiose plans’ for hydropower plants and the plans for extending the irrigated area (and indeed many of the other major late Stalin-period projects). Essential to socialist extended reproduction was the primacy given to investment in Department ‘A’ of the economy which was the basis for increased development of light industry before 1953. The increase of investment in Department ‘B’ and agriculture after March 1953 was bound to have the effect of a long term decline in the rate of growth of the economy such as indeed happened in the Khrushchev years. Molotov argued that there was ‘an abnormal situation’ in the Soviet Union in which there was a lack of correspondence between procurement prices and retail prices. Under Stalin the cost of production was taken into account in formulating pricing but it did not determine them. Pricing was planned according to the requirements of building socialism and communism. Thus the price of steel was fixed below value as was the price of children’s clothing. Other items such as alcohol and luxury goods were priced above value. Implicit in the views of Molotov was the need to apply greater value relations in the Soviet economy. Those who tolerated the existing ‘abnormal’ understanding said Molotov needed to be given ‘special awards’. From this it was implied that Stalin deserved an award for his ‘abnormal’ views on political economy. Molotov considered that the CPSU had tolerated this situation, which allegedly ignored the lack of material benefits for the Soviet peasantry, for long. Greater investment was required in agriculture and higher procurement prices were needed to increase milk and meat production and lead to an upsurge in Soviet agriculture. Such measures should have been implemented much earlier. Molotov here defended the very views which Stalin had criticised as ‘Rykovism’. The new measures initiated at the September 1953 Plenum led to a temporary rise in the rate of growth in agriculture but only for a limited period. The transition to a market economy after March 1953 reflected the changing character of the economic relations.
The observations of the second edition of the Textbook of Political Economy published in the Soviet Union exactly two years after the September Plenum of 1953 are instructive. (The Textbook of Political Economy, Lawrence and Wishart, London, 1957, pp. 653-655). The textbook criticised the earlier practice of exaggerated deliveries of compulsory quotas from the more advanced collective farms which were alleged to have reduced the material interest of the collective farmers to increase output. Instead, quotas of compulsory deliveries were reduced for a number of agricultural products and procurement prices were considerably raised for the voluntary sales of agricultural goods to the state, and, the agricultural tax on the personal subsidiary holdings of the collective farmers was reduced. All this led to a considerable increase in the money incomes of the collective farms and farmers, to an increase of 12 milliard roubles in 1953 and 25 milliard roubles more in 1954 than in 1952.
The Textbook frankly accepted that these changes in agricultural prices were in keeping with the requirements of the law of value. It did not refer, of course, to these as being the implementation of the political economy of Rykovism.
The increasing application of the law of value in the economy not only led to the loss of the relations of socialism by the end of the 1950s but also led to a drastic drop in the yearly rates of growth of all major sectors of the Soviet economy.
Click here to return to the April 2020 index.