Money, wage-labor and Marx’s ‘Critique of the Gotha Program’

This August marks the 100-year anniversary of the start of World War I, which forever changed the world. This is the first in a series of posts that will center on the causes and consequences of World War I. The most important consequence was the conquest of political power by the working class of the former Russian Empire. Rosa Luxemburg, along with other Marxists of the time and since, saw that the catastrophe overtaking Europe in 1914 had deep economic roots.

At the beginning of this year—2014—I couldn’t help but wonder if a major new European war could break out on the 100th anniversary of the “Great War,” as it was called, that started in 1914. This seemed extremely unlikely, and indeed history rarely respects anniversaries in this manner. But in light of the crisis in Ukraine, a major new war that would mark the anniversary of the events of August 1914 doesn’t appear as unlikely as it did at the start of the year. Many of the ghosts of the last century seem to be rising from their graves once again.

In the coming months, I will explore the economic roots of the Great War in light of the ideas on crisis theory I have been exploring in this blog. Though the Great War itself was not a crisis of overproduction, it did break out during the 1913-14 global recession and was the greatest crisis by far that capitalist society had experienced up to that time. And we have already seen that the Great War played a crucial role in the development, starting in 1929, of what seemed to be an ordinary cyclical recession into first the super-crisis of 1929-33 and then the Great Depression of the 1930s.

The conquest of political power by the working class of the former Russian Empire began in Petrograd (aka St. Petersburg and Leningrad) with the insurrection of October 25 (old calender) or November 7 (new calender). Here I want to examine the fate of that first serious attempt to build a socialist society in light of Marx’s last—and as we will see perhaps least understood—work “Critique of the Gotha Program.”

The classic socialist movement, organized in the Second International, was split by the war. Then, with the victory of the Russian Revolution, the split deepened further. Before the war, the politically conscious workers and their supporters in the middle classes—both reformist liberals and revolutionists—had been organized in political parties called Social Democratic or Socialist.  (1)

But in the wake of the October Revolution, two parties based in the working class confronted one another, the revolutionary Communist Parties of the Third International, which supported the October Revolution and aimed to repeat that revolution in their countries, and the liberal-reformist bourgeois working-class parties that remained in the Second International. The latter parties retained their old names, Social Democratic or Socialist.

The October Revolution created two institutions that reshaped working-class politics. One was the Soviet state, and the other was the Third or Communist International, sometimes called the Comintern for short. The Third International
formally lasted until 1943. Though deeply divided politically, the Third International tendency exists to the present day.

The Soviet state that issued from the October Revolution was to last for 70 years. Ultimately, it was overthrown from within but only after decades of pressure from without. This pressure included the Nazi invasion of the Soviet Union—sparking what came to be called “the Great Patriotic War”—and then the “Cold War” waged by the U.S. world empire.

In the end, the Soviet state was overthrown internally by a faction of capitulators that had formed within the Communist Party of the Soviet Union, represented by Mikhail Gorbachev. The Gorbachev faction represented those within the Soviet Union who wanted the “good life” that they believed a return to what they called a “normal”—that is, bourgeois—society would bring them. When that happened, Russia, Ukraine and the other republics that had made up the Soviet Union separated and reverted to capitalism. The roots of the current crisis in Ukraine now threatening the peace of Europe and the world were laid.

What was the real nature of Soviet society? And how does it fit into the predictions of the classics of Marxism—Marx, Engels and Lenin—about the transition from capitalism to socialism? Today, people who consider themselves supporters of the October Revolution and followers of the Marxist classics do not agree on the nature of the former Soviet society. For example, the fractured International Socialist Tendency, which descends from a faction in the old Trotskyist movement led by British “Trotskyist” (2) Tony Cliff, claims that the Soviet Union had nothing to do with socialism at all.

The differe­nt schools of state capitalism

The International Socialists, as this tendency calls itself, believe that the October Revolution brought the working class to political power. However, they hold that after the death of Lenin a full-scale capitalist counterrevolution, led by Joseph Stalin, overthrew the workers’ government. Then, according to the International Socialists, starting with the first five-year plan, the simple reproduction that had characterized the Soviet economy under the New Economic Policy, or NEP, was replaced by expanded reproduction.

As regular readers of this blog should be well aware, Marx explained that capitalism can only exist in the form of expanded reproduction. Therefore, the International Socialists drew the conclusion that the Soviet economy was characterized by expanded reproduction after 1928. According to Tony Cliff, the Soviet economy was a form of capitalism, specifically state capitalism.

Cliff and his co-thinkers claimed that the Soviet economy was simply the most extreme manifestation of a broader worldwide trend. What these “state capitalist” theoreticians overlooked was that Marx did not define capitalism as simply any kind of expanded reproduction but expanded reproduction of the social product in the form of capital.

That is, capitalism is the expanded reproduction of value whereby a portion of the surplus product, which under capitalism takes the form of surplus value, is transformed into additional capital. The expanded reproduction that occurred from 1928 on in the Soviet Union was an expanded reproduction of use values, not values or capital. Not all “state capitalists” share the history and views of the followers of Tony Cliff, who often describe themselves today as “Trotskyists.”

Another group of “state capitalists,” who most certainly do not consider themselves “Trotskyists,” is the U.S.-based Progressive Labor Party. Today, the PLP considers itself an international party—they are attempting to build branches in all countries. They therefore see themselves as the embryo of a new revolutionary workers’ international. The Progressive Labor Party grew out of the various left-wing opposition currents that developed in the U.S. Communist Party in reaction to the 20th Congress of the Soviet Communist Party.

This congress is most famous for Soviet leader Nikita Khrushchev’s denunciation of Stalin. Khrushchev’s denunciation was to have devastating consequences for the old Communist Parties. Stalin had been their banner. The founders of Progressive Labor, along with other left-wing currents in the U.S. Communist Party, rejected the program of the 20th Congress of the CPSU and strongly defended Stalin’s role in the history of the Soviet Union and the international workers’ movement.

On one point, however, they agreed with the 20th Party Congress. That involved the rejection of the cult of the personality that the PLP agreed surrounded Joseph Stalin. However, Progressive Labor rejected not only that “cult of the personality” but also what they saw and see as cults of the personality that surround to varying degrees Marx, Engels, Lenin, Trotsky, and Mao, and lesser communist leaders as well.

Unlike the International Socialist tendency, Progressive Labor’s view is that under the leadership of Stalin a socialist society was indeed built in the Soviet Union. However, they hold that beginning with the revisionist program adopted by the 20th Party Congress in 1956 as well as what the PLP sees as the slanderous attacks on Stalin by Nikita Khrushchev (1894-1971) at that Congress, the socialist society that had existed in the Soviet Union was replaced under Khrushchev with a state capitalist society that later evolved beginning with Gorbachev and Yeltsin into a more classical capitalist society based on private ownership of the means of production.

Progressive Labor considers Marx, Engels, Lenin, Stalin, and Mao to have been great revolutionaries despite the cults of the personality that surrounded them. They have no use for Trotsky, however, who according to Progressive Labor began as a badly flawed revolutionary and then degenerated into a full-scale counterrevolutionary by the 1930s.

Progressive Labor’s views on the relative merits of Stalin and Trotsky are held by other trends as well in today’s highly fragmented communist movement, some of which believe that capitalism in the form of state capitalism was restored in the Soviet Union under Khrushchev while others hold that the Soviet Union remained a socialist society right up to its destruction under Gorbachev-Yeltsin.

What makes Progressive Labor unique among the various “state capitalist” tendencies, and what makes them worth our special attention, is that the group traces what they view as the replacement of socialism by state capitalism in the Soviet Union after 1956 back to a mistake by Karl Marx himself. This mistake, according to Progressive Labor, ultimately undid both the Russian and Chinese revolutions. This alleged mistake is contained in Marx’s last last major work “The Critique of the Gotha Program,” written in 1875.

Marx’s mistake, if we are to follow Progressive Labor’s reasoning, was to cast a deep shadow over the history of the 20th century and into the current century. This mistake was, according to Progressive Labor, responsible for the decisions by Lenin, Stalin and then Mao to build not a communist society but rather a socialist society, with the construction of a communist society, though the final aim, postponed to a more or less distant future.

Following Marx, the leaders Lenin, Stalin and Mao wrongly believed that a socialist society had to be built first before the construction of a communist society would be possible. The “decision” to build socialism rather than communism, in the opinion of Progressive Labor, made the restoration of capitalism not only possible but inevitable both in the Soviet Union and then in the People’s Republic of China.

Now, I think the theoreticians of Progressive Labor deserve credit for their willingness to think outside the box. That’s what makes their ideas more interesting than other “state capitalists.” They force us to examine this work of Marx anew in a truly critical light.

Political background of the Progressive Labor Party

First, let’s examine where the leaders and members of Progressive Labor are coming from. Their tradition is that of the Third International in the period when it was no longer led by Lenin but rather by Stalin. Now, the name of Stalin raises strong emotions, and not without reason, among many Marxists. But we are not interested here in assessing Stalin’s place in the history of the Russian Revolution, the Soviet Union and international workers’ movement, important as that is. Doing this could fill volumes and is not the purpose of this blog.

Here, however, we are interested in other questions. First, what are the economics of the transition between capitalist and communist societies. And second, how well do the theoreticians of the Progressive Labor Party really understand Marx’s “Critique of the Gotha Program” in the first place?

To explore the interesting question raised by Progressive Labor, we have to return to what Marx himself wrote. This is not always as easy as it seems. Most read Marx in light of what Lenin and then the post-Lenin theorists of the Communist Party of the Soviet Union and the Third International made of the “Critique of the Gotha Program.” Others, influenced by the Trotskyist tradition, read this work in the light of what Trotsky or later “Trotskyists” such as the well-known Marxist economist Ernest Mandel made of it.

Partly because of this and partly because, as we will see, understanding Marx’s final major work requires a solid understanding of Volume I of “Capital,” “The Critique of the Gotha Program” is perhaps the most misunderstood work in the entire history of Marxism. To approach this question afresh, we have to put out of our heads all that has been written about the “Critique” by later Marxists and read it as Marx, and Marx alone, wrote it in 1875. Only then can we properly evaluate what Lenin had to say and then what the post-Lenin leaders of the CPSU and other Marxists had to say about Marx’s final major work.

PL’s critique of the ‘Critique of the Gotha Program’

Progressive Labor writes in “Road to Revolution IV,” first published in 1982: “Marx and Lenin described socialism as the early stage of communism. These great revolutionaries doubted that the working class could move immediately from capitalism to communism. They and others believed that important concessions to capitalism and capitalist ideas were necessary to win enough people to socialist revolution.”

How do the socialist societies that resulted from the revolutions led by Lenin, Stalin and Mao, according to Progressive Labor, differ from the communist society that Progressive Labor advocates be established immediately after a successful workers’ revolution? (3) The authors of “Road to Revolution IV” write: “Keeping the wage system was the greatest concession to capitalism…. Wage differences reinforced commodity production—production for sale, for profit rather than for society’s use or need. Goods could never be distributed according to collective need because some workers had greater purchasing power than others.”

Progressive Labor believes that Marx advocated the building of a socialist society as a first step towards a communist society. The socialist society that Marx advocated, according to PL, retained the wage system, commodity production and money.

Now doesn’t this socialist society that PL claims Marx advocated in the “Critique” sound an awful lot like capitalism? No wonder then that in practice, if we follow the logic of Progressive Labor, socialism led first to state capitalism, and then to a return to ordinary private capitalism. Socialist society wasn’t that far removed from capitalism to begin with.

In order to prevent the return to capitalism after future workers’ revolutions, PL believes, those revolutions must immediately proceed to build communist societies without wage labor, commodity production and money rather than socialist societies that retain all these things.

What was the Gotha Program and why did Marx write a critique of it?

The “Critique of the Gotha Program,” which if the Progressive Labor Party is right was the most disastrous document ever written in the history of the entire workers’ movement and perhaps all human history, began its life as a circular letter by Marx in 1875 to the newly formed German Social Democratic Party. This party had emerged from the merger of two currents that had existed in the young German workers’ movement. One was the “Eisenachers,” which followed Marx and Engels, and the other was the current that followed German socialist Ferdinand Lassalle (1825-1864).

At a congress held in the German city of Gotha, the two tendencies had formed a united workers’ party, which was to become the German Social Democratic Party, or SPD, which still exists today. Nowadays, the SPD is a liberal bourgeois party that retains a base in the German labor movement. However, during the era of the progressive work of the Second International—1889-1914—the SPD was the party that all other Marxist parties in the world looked to, including the emerging Russian Bolshevik Party, led by V.I. Lenin (1870-1924). (4)

In order to achieve unity, the newly born Social Democratic Party had adopted a largely Lassallian program. Marx and Engels were all in favor of working with the Lassallians in action—on issues they agreed on—but thought that the merger of the two parties on a largely Lassallian program was a major error.

Marx and Engels began a struggle against the Lassallian Gotha Program, and Marx wrote a circular letter where he presented his criticism of that program. In 1891, after the Social Democratic Party had replaced the Gotha Program with a Marxist one, Engels published the “Critique of the Gotha Program” as a pamphlet.

The differences between Lassalle and Marx and Engels

Lassalle had accepted many of the ideas of Marx and Engels but also had ideas of his own that brought him into sharp conflict with Marx and Engels. Among these was Lassalle’s policy of attempting to forge an alliance with the semi-feudal landowners against the capitalists in Germany. We are accustomed to the idea of a workers’ and peasants’ alliance against the landowners and capitalists—an idea that can be found already in Marx and Engels’ writings.

Lassalle, however, favored an alliance of the workers and landowners, not the peasants, against the capitalists. In contrast to Marx and Engels, he believed that socialism would be achieved primarily through state aid to producers’ cooperatives. Lassalle, unlike Marx and Engels, also believed that the trade union struggle for higher wages was futile because of the operation of what Lassalle called “the iron law of wages,” which he borrowed from Ricardo and Malthus, not without some misrepresentation of Ricardo.

Marx strongly objected to the Gotha Program’s call for a “free people’s state.” Marx and Engels explained that to make the state free is in reality to call for a despotic government. To use a contemporary example, the U.S. National Security Agency has far too much freedom when it comes to collecting information about virtually every person who uses electronic communication anywhere in the world today.

We certainly do not want a “free state” in this sense. Even more importantly, Marx and Engels strongly opposed the idea that the state can be a state “of the people” rather than a state of a specific class.

Many of the ideas of Lassalle have passed into history. Who today raises the slogan of a workers’ and landowners’ alliance? But other Lassallian ideas have re-surfaced in the workers’ movement again and again. None has proven to be harder to eradicate than the slogan of a “people’s state.” For example, the Communist Party of the Soviet Union adopted at its 22nd Congress, held in 1961, a program that described the Soviet state as a “state of the whole people,” claiming that the dictatorship of the proletariat was no longer necessary.

According to the new CPSU program, which replaced the Marxist program that had been adopted in 1919, there were now only two classes in Soviet socialist society—the working class and the collectivized peasantry, plus one social layer, the intelligentsia. Since, according to the authors of the new CPSU program, the two classes and the intelligentsia had an equal interest in making a transition from the existing socialist society to a communist society, there no longer was a need for the dictatorship of the proletariat but instead a Soviet “state of the whole people.”

Did Marx in the’Critique of the Gotha Program’ call for building a socialist society first ?

In his criticism of the Lassallian Gotha Program, Marx said absolutely nothing about building a socialist society as opposed to a communist society. He nowhere mentioned the building of socialism at all in the “Critique.” Instead, he spoke of a transition period between capitalist and communist societies with both political and economic aspects. Marx—and this is what so upsets PL—divided communist society into two stages: a lower stage, where people are paid more or less according to their work, and a higher stage, where people work according to their abilities and receive from society according to their needs.

The state and the transition from capitalism to communism, according to the ‘Critique of the Gotha Program’

“The question,” Marx wrote, “then arises: What transformation will the state undergo in communist society?” Marx immediately qualified the word “state” here when we wrote, “In other words, what social functions will remain in existence there that are analogous [my emphasis—SW] to present state functions?” Notice the use of the term “analogous” in this sentence. We will run into it again.

Marx wrote: “Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.”

So if we are to follow Marx’s logic, there is a transition period between capitalist and communist society that has both political and economic aspects.

As far as the political aspects are concerned, the state can only be a revolutionary dictatorship of the proletariat. What about the non-political aspects of this transition period, especially the economic aspects?

At the beginning of this transition period—the day the working class seizes political power—we still have capitalism more or less modified by the continued existence of older modes of production such as small-scale simple commodity production and maybe hangovers of feudalism or other pre-capitalist systems of production.

Capitalism can be best defined as generalized commodity production where labor power itself has become a commodity. The workers—those who operate the means of production—are separated from them, or using legal language, don’t own them. Instead, a separate class of people—the capitalists—own the means of production. The capitalists purchase labor power from people who belong to the proletariat—people who own neither land nor capital. The proletarians sell their ability to work, or labor power, to the capitalists and get in return a definite sum of money—called a wage. Wages are therefore nothing but the price of labor power.

The question of money once again

In the main body this blog, I put great emphasis on the nature of money in order to explain periodic crises of overproduction. Contrary to what the followers of Keynes and Kalecki assume, money is not a slip of paper with a pretty picture on it issued by a “monetary authority.” I have emphasized that the money relationship of production—a form of the commodity relationship of production—must be represented by a special commodity in whose use value the value of all other commodities is measured. Therefore, price is a definite quantity of the use value measured in the appropriate unit of the particular commodity that serves as money.

In practice, this means a unit of weight of some precious metal—for example, so many grams of gold bullion. Like all commodities, the commodity that serves as money represents a definite quantity of abstract human labor measured by some unit of time. The abstract labor represented by the money commodity differs from the abstract labor represented by all other commodities in one crucial respect: It is directly social.

Since money in not a slip of paper printed by the state, it cannot be created by a monetary authority in whatever quantity is necessary to ensure full employment, as the followers of Keynes and Kalecki assume. Understanding this is key to understanding the periodic crises of overproduction that are the main subject of this blog. It explains that attempts to win lasting “full employment” under the capitalist system, as well as a universal lasting peace among the capitalist countries—a key hope of Keynes—by ending the struggle for markets is hopeless.

While the “Critique of the Gotha Program” does not deal with crisis theory, it turns out that understanding what money is—and what it is not—is crucial to understanding Marx’s deceptively simple final major work.

Under capitalism, the price of labor power is so low—that is, represents such a tiny amount of money in terms of weight—that wages can rarely be paid directly in gold. If wages were paid in gold, it would take a microscope to clearly see the gold coin that would constitute the wage—the price of a weekly quantity of labor power. In the 19th century, wages were therefore paid in token money—coins made of base metals, or later paper money, which can represent amounts of gold that are too small to coin.

In the Britain of Marx’s day, only the best-paid workers were paid in an actual gold coin, the sovereign, which circulated in retail trade until August 1914. Nowadays, in the richer capitalist countries wages are paid by check or in some purely electronic form of credit money, which is payable in legal-tender token money. As I explained in the main section of this blog, token, or paper, money represents a definite quantity of the money commodity through the currency price of gold, whether fixed under the international gold standard or fluctuating day to day under today’s paper money system. This must be kept in mind when we examine the terms that Marx uses in the “Critique of the Gotha Program.” As we will see, they were very carefully chosen.

Did Marx believe that wage-labor would be retained under the first phase of communism?

“Within the co-operative society based on common ownership of the means of production,” Marx wrote, “the producers do not exchange their products; just as little does the labor employed on the products appear here as the value of these products, as a material quality possessed by them, since now, in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor.”

Remember, this is a description of the lower not the higher stage of communism. While under capitalism only the labor that is used to produce the money commodity is directly social, under communism, including its first stage, the labor that goes into the production of all products is directly social.

Marx explained that the lower phase of communism is a co-operative society. It is a gigantic producers’ cooperative that embraces the entire economy. Its central feature is the common ownership of the means of production.

Notice, not some means of production but all means of production, certainly all means of production of any significance. There is not only no private ownership of the means of production. There is also no group ownership of the means of production such as existed with the Soviet collective farms. Therefore, there are no classes at all. We are already dealing with a classless society. As far as their relationship to the means of production—ownership in legal language—all people are equal.

Second, “the producers do not exchange their products.” This is not only true of the producers of the means of production but also is true of the producers of the means of consumption. Many Marxists over the decades—not only the theoreticians of the CPSU but also the well-known Marxist economist Ernest Mandel (1923-1995), who was in addition to being an eminent Marxist economist also the leader of the “Trotskyist” Fourth International–imagined that this was true of only the higher stage of communism. (5)

But this was not Marx’s view at all. Even in its initial stage, according to Marx, commodity production has already completely disappeared. “Just as little,” Marx wrote, “does the labor employed on the products appear here as the value of these products—since now, in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor.”

Is there money during the lower phase of communist society as foreseen by Marx?

Anybody who has followed and agreed with this blog—or better yet has mastered “Capital”–will realize that there is only one possible answer to this question. The answer is no. Without commodity production, there cannot be money relations. Therefore, money will not exist, if we follow Marx, in the lower phase of communism. If commodity production and money still exist, it is not or not yet the lower stage of communism but at best the transitional phase that lies between capitalism and the (lower) stage of communism.

Wage-labor and the lower stage of communism

Since wages are defined as the sum of money workers receive in exchange for selling their ability to work for a given period of time to capitalists—this includes the capitalist state—how can we speak of wages under the lower phase of communism?

Marx wrote: “For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.”

Notice here Marx does not say the workers receive a certain sum of money for the labor they perform for society but rather certificates that they have furnished a certain amount of labor to society. Marx specifically avoids using the term money here. So there is no wage labor in the sense of a price of labor power in the first phase of communist society as foreseen by Marx in the “Critique of Gotha Program.”

But just as Marx wrote about social functions that are analogous to the present-day state, don’t some elements that are analogous to wages exist here? After all, workers work because they need the certificates that they have performed a certain quantity of work if they are to get access to goods they need to live, giving them the right to draw a certain amount of means of personal consumption. They do not work because work has become their primary need.

Marx certainly does not overlook this. Let’s see what Marx has to say about this not unimportant subject:

“Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labor, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.” [emphasis added]

Now we get to the real problem with the “Critique of the Gotha Program.” Marx assumed that the reader had mastered the fundamentals of his theory of value, money, price and wage-labor—that is, that the reader had mastered the essence of Volume I of “Capital.” If you have not mastered these things, you will get something out of the “Critique,” but it may not be what Marx was trying to convey.

This is exactly the case with the Progressive Labor critics of Marx. The same goes for the far more influential theoreticians of the Communist Party of the Soviet Union in the years in which that party dominated the world Communist movement. Though the PL writers are among those who have not correctly understood the “Critique of the Gotha Program,” we do have to give them credit for pointing to the problems that have arisen from not understanding Marx’s last major work.

Is there class struggle under the first stage of communism?

According to Marx’s definition of the first stage of communism as expressed in his “Critique of the Gotha Program,” all people able to work are required to do so. All the means of production are held in common by society. Therefore, there are no classes, and since there are no classes there is no class struggle. To talk about the class struggle under the lower phase of communism is therefore nonsense. But is there equality and justice? Compared to capitalism or any class society, the answer is yes. But is there full equality and full justice?

Here we get to the distinction between the lower and higher stages of communism. Unlike the higher stage of communism, people are paid, with some modifications, according to their work. This element survives from the “wages system” and still exists in the lower stage of communism, according to Marx. Why is this so?

The reason is that Marx assumed that under the first phase of communism the productive forces would not be sufficiently developed to fully meet the needs of all people. Therefore, we cannot yet have full justice and equality. Different individuals have different abilities to work and different interests and therefore needs. So even if goods—notice I say goods, not commodities—were distributed equally—either in the sense of the exact same material use values or a basket of goods that take on average the same quantity of labor to produce—everybody’s needs would not be equally met and the result would not be perfectly just.

Perfect justice requires, on the contrary, that we recognize the different needs of individuals. Not equality but the meeting of everyone’s needs is required for a fully just society. Notice that a “just” society is therefore not an egalitarian society.

This is explained by Marx as follows:

“But one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only—for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.”

So the achievement, with appropriate modifications, for example for those who cannot work for no fault of their own, the providing of socialized medical care and education for all and perhaps some other modifications, the best that we can do under the first stage of communism will be to pay people according to their work.

But Marx foresaw a day when: “In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”

The word ‘socialism’ is the cause of confusion

The word “socialism” is rather vague, while the word “communism” is far more specific. For example, the name socialist has been used by many political parties since the early 19th century. And not only by parties of the “left” but also parties of the center and even the far right! For example, the liberal bourgeois Radical-Socialist Party was the leading party of the French Third Republic. The most notorious case of this is the National German Socialist Workers Party, better known by its nickname the Nazi party. The Nazis preferred to call themselves “National Socialists.”

The term “socialism” arose in France around 1830 and was counterposed to the word “individualism.” In the mid-19th century, “socialism” was used to describe the various opponents of the “political economists”—who all supported capitalism—and criticized political economists from a more or less working-class viewpoint. The utopian socialists designed various “ideal societies” that they believed would eliminate the evils of capitalist society. Not all these designs involved the collective ownership of the means of production by the workers themselves. The latter solution was considered a subset of socialism. But it was by far the most radical form of socialism and the form most feared by the capitalist class. And the name of that subset of “socialism” was “communism.”

The concept “communism” is actually much older than “socialism.” Broadly speaking, there are two forms of communism. One involves the collective ownership of the means of production. This is the form of communism that is involved in Marx’s “lower stage of communist society.”

Another form of communism involves the collective distribution of the means of consumption according to need. Under a communism of consumption, the individual members of the communist community withdraw products from the common store according to their needs. This form of communism prevailed, or rather was the ideal of, early Christian communities. Christian communism is described quite vividly in the book of the Christian Bible entitled “Acts of the Apostles.”

Communism of consumption as the Christian ideal

“Now the company of those who believed were of one heart and soul, and no one said that any of the things which he possessed was his own, but they had everything in common. And with great power the apostles gave their testimony to the resurrection of the Lord Jesus, and great grace was upon them all. There was not a needy person among them, for as many as were possessors of lands or houses sold them, and brought the proceeds of what was sold and laid it at the apostles’ feet; and distribution was made to each as any had need.” (Acts 4: 32-36, emphasis added)

So the expression “to each according to their need” should not be credited to Marx but the unknown (to us) author of the book of “Acts”!

Notice that this author wrote about the distribution of goods according to “need,” and not the equal distribution of goods. In this respect, the ancient Christian author of “Acts” was well ahead of today’s socialists and communists who talk about an “equalitarian” society.

However, unlike Marx, the author of “Acts” is understandably unconcerned with the question of who produced the material use values that the apostles distributed communistically in their communities. This author lived in a society where most of the material use values were produced by slave labor. Therefore, the author shows no interest in communism in the sphere of production.

In Marx’s lower phase of communism, in contrast, communism prevails in the means of production—the associated producers own their means of production in common—but the means of consumption are distributed not according to need but in proportion to the work performed.

According to Marx, only in the higher phase of communism will it be possible to distribute the means of consumption according to need, thereby recognizing the ideal of the author of “Acts” of “to each as any had need.” We will then have communism in the means of production combined with the “Acts” author’s communism in the sphere of the means of consumption.

Socialism versus communism?

By the late 19th century, that very bad word “communism,” or “communist,” had largely died out and been replaced by the far more respectable term “social democrat” or “socialist.” Engels on one occasion pointed out that the term “social democrat” was actually incorrect, because it implied that the aim of the workers’ movement was to achieve a socialist democracy when in fact the aim was to achieve communism in the means of production and distribution.

Such a society would have no need of the state or even functions analogous to the state. Such a society would have moved far beyond even the most democratic state conceivable—a democratic workers’ republic.

In retrospect, use of the term “social democrat,” and even the term “socialist” as opposed to “communist,” can be seen as a sign of incipient opportunism in the face of the tremendous pressure that bourgeois society placed on the young workers’ movement.

The word “communism” was then as it is today a nasty word in polite bourgeois society—the book of “Acts” notwithstanding—but the word “socialism” can as we have seen mean almost anything. Despite this, during the era of their progressive work—1889 to 1914—the parties of the Second International, including the Russian section that Lenin belonged to, used the words “socialist” or “social democratic” to describe themselves. As far as I know, no workers’ party of that era used “communist” in its name.

Lenin revives ‘communist’ as a party name

However, in the radical atmosphere of the Russian Revolution of 1917, Lenin advocated ditching the name Social Democratic and reviving “Communist” as a party name. When the October Revolution occurred, the name of the party that led it was still officially the Russian Social Democratic Labor Party (Bolshevik). But following Lenin’s suggestion, “Social Democratic” was replaced by “Communist” in 1918. When the Third International was founded in 1919, one of the 21 conditions that a party had to meet to gain admission was to call itself Communist Party of such and such country.

Though the Third International dropped the term “social democratic” completely—except to describe their reformist opponents who remained in the rump Second International, who often still call themselves “social democrats,” the term “socialist” continued to be used despite its ambiguity. It came to be attached to what Marx had called the lower stage of communist society. This usage was adopted by Lenin in “State and Revolution.” As far as Lenin and the founders of the Third Communist International were concerned, socialist society and the first stage of communist society were identical. A socialist society was simply another name for a fully communist society as far as ownership of the means of production by the associated producers is concerned, but where bourgeois right, not communism, prevailed in distribution.

Perhaps in retrospect, it would have been better to use the term “communist construction” or the building of a communist society instead of the terms socialist construction or the building of a socialist society. The distinction between the lower and higher phase of communism is like the distinction between a partially constructed building and a fully constructed one. Whatever the stage of construction, at a given point in time the construction workers are constructing the entire building.

The main purpose of differentiating between the lower and higher stage of communism is to remind ourselves that even when we have achieved communism in the sphere of production, our construction is still not complete. Because of the long tradition of describing the society that the workers’ movement had been trying to achieve as socialist, Lenin used “socialism” interchangeably with the first stage of communism. Though this is a matter of pure speculation on my part, perhaps the next great workers’ revolution and workers’ international will ditch the word “socialist” and “socialism” just like Lenin and the Bolsheviks and Third International dropped “social democrat” in describing themselves.

Watering down of the concept of ‘socialist society’ by the CPSU and the Third International after Lenin

After the death of Lenin, Stalin, starting in the second edition of his “Problems of Leninism,” published in late 1924 and supported by the leaders of the future “right opposition” of Bukharin, Rykov and Tomsky, began to insist that a “socialist society”—in Lenin’s sense, the lower stage of communism—could be built in the Soviet Union alone because of the vast size and tremendous natural resources of that country.

In the first edition of “Problems of Leninism,” Stalin had indicated, on the contrary, that a full socialist society—in the sense of the lower stage of communism—could not be fully achieved in the Soviet Union alone but would require the efforts of the workers holding state power in a number of highly industrialized countries not including backward Russia. This had been the view of all the leaders of the CPSU and the Third International during Lenin’s lifetime.

Today we know a lot more about the history of the Communist Party of the Soviet Union than was known as late as the 1970s and 1980s. Back then, we learned that Stalin and his supporters believed that it was possible to build a “fully socialist” society in the Soviet Union alone, while Trotsky and his supporters in the Left Opposition believed that a full socialist society could be built only after workers had conquered political power in a number of advanced industrial countries not including Russia.

However, both the opening up of some of the archives of the CPSU since that party was overthrown by the Gorbachev-Yeltsin counterrevolution and the publication of the memoirs of prominent Soviet leaders indicate that things were not quite that simple. The old Bolshevik V.M. Molotov (1890-1986) was the second most important person in the Stalin group for many years and was always a strong opponent of Trotsky and “Trotskyism.” He was extremely active in the struggle against “Trotskyism” and was throughout a strong supporter of Stalin in the CPSU and later was to defend Stalin from Khrushchev’s denunciations. However, in “Molotov Remembers” he indicated that he never believed that a full socialist society could be built in the Soviet Union alone. Eventually, Molotov’s disbelief about the possibility of building a “fully socialist society” in the sense of the lower phase of communism was to bring him into conflict with Nikita Khrushchev. (6)

As doubts grew, especially after the defeat of the German revolution of 1923, that new socialist revolutions were going to occur in the industrialized Western Europe countries anytime soon, Lenin’s successors came under considerable pressure to declare that the Communist Party could fulfill its entire program even if the proletarian revolution remained confined indefinitely to the borders of the Soviet Union. This led to pressure to water down the concept of socialist society—that is, begin to define socialist society as something different than the way Marx defined the lower phase of communist society in “Critique of the Gotha Program.”

More specifically, the period of revolutionary transition of capitalist society into communist society, when the state can be nothing other than the dictatorship of the proletariat, began to be described as “socialist society.” Since it was remembered that Lenin in “State and Revolution” had used the first phase of communist society interchangeably with “socialist society,” the transitional period between capitalism and communism began to be confused with Marx’s first phase of communism.

In 1934, the CPSU leadership and the Communist International started boasting that the Soviet Union had already entered into “socialism.” They pointed to the collective farms to justify the claim that the Soviet Union was now fully socialist. In a Soviet collective farm, the members owned collectively some of the means of production. But this group ownership was not the same as state ownership, where all the members of the state—the workers organized as the ruling class—are the collective owners of the means of production, including in agriculture. Nor is it the same thing as the ownership by the associated producers of the means of production.

More specifically, during the phase of the dictatorship of the proletariat, state property is the collective ownership of the means of production by the working class organized as the state power. Therefore, state property under a workers’ state is quite different than the state property of a capitalist state.

In addition, not all means of production within the Soviet collective farms were owned collectively by the members. The peasants had private plots where they produced privately and sold the commodities they produced on private farmers’ markets. Because of the chronic shortages of material use values, there were also opportunities for people outside of agriculture to engage in private commodity production.

This was sometimes called “speculation” in the Soviet terminology. It was endemic by the time of the lax and increasingly corrupt regime of Leonid Brezhnev, who headed the CPSU from 1964 to his death in 1982, where the growing, mostly illegal private sector was dubbed the “second economy.”

The tendency for commodity production to give birth to real capitalism was counteracted by the repressive activities of the Soviet state but less and less so as time went on. The result was that there remained a petty, and sometimes not so petty, bourgeoisie in Soviet society that had a tendency toward development into a new capitalist class.

Far from being a thing of the past, class struggle had entered into an extremely dangerous new phase in the post-Stalin Soviet Union. The claims to the contrary of the CPSU in the post-Stalin period played right into the hands of the resurgent capitalist class and their ideological representatives among the intelligentsia.

The second economy and the role it played in the destruction of the Soviet Union is described in the book “Socialism Betrayed” by Roger Keeran and Thomas Kenny. (International Publishers, 2004) Keeran and Kenny hold that the second economy was consistently repressed under Stalin and was therefore less of a problem in the period of his leadership. Even if this is true, the very need for the use of state power—repression—to repress a “second economy” shows that despite its enormous and undeniable accomplishments, Soviet society still had a long way to go before it reached even the lower phase of communism, or socialism in the prevailing usage.

Before society can be described as having reached the lower stage of communism, the private sector that breeds a petty bourgeoisie of small business people must become an economic impossibility. When society achieves the lower phase of communism, any attempts by individuals to engage in private business will come to nothing. Private businesses will die out, not because they are repressed by state power but because there is less and less business for them to do. Therefore, there will no longer be any need to repress such attempts. People will be free to set up private business and hire wage labor without limit—if they can find anybody willing to work for them—but they won’t get very far.

Any attempts to hire wage labor under the lower stage of communism will fail not because there are laws against it but because the would-be employers will not be able to find anybody willing to work for them.

The capitalist-breeding class of petty-bourgeois small business people must die out due to the operation of economic forces. As this process is in the main completed, so does the need to hire police—or even employ armed workers—to regulate and repress the private sector if it oversteps the legal limits, because there will no longer be any private sector to repress. Only when we get to this phase will it be possible to say that society has fully achieved the lower stage of communism.

During the transitional period between capitalism and the lower phase of communism, society necessarily has features of both the capitalism that is going out and the lower stage of communism that is not yet fully here. For example, some of the means of production—but not all—will be owned by the workers’ state. Other means of production will be owned by cooperatives, and some will be owned privately including state capitalist enterprises operating on a national scale under the control of the workers’ state with national accounting such as Lenin advocated in his important work “The Tax in Kind,” published as a pamphlet in 1921.

Even leaving aside the state capitalist enterprises as foreseen by Lenin, the hiring of wage labor, depending on the circumstances, might be allowed like it is in Cuba today but within strict limits. If these limits are violated, the repressive power of the workers’ state will be brought to bear. The planned economy based on production for use will to one degree or another interact with the private sector through the market. As we approach the lower phase of communism, the private sector will grow less and less significant, and the market will not be abolished but instead, like the private sector itself, gradually wither away.

The ‘socialist’ principle of distribution in light of Marx’s ‘Critique of the Gotha Program’

The 1936 Soviet Constitution proclaimed a new principle of “socialist distribution”–citing Marx in his “Critique of the Gotha Program.” The slogan was “From each according to their ability, to each according to their work.” Were the authors really following Marx’s “Critique of the Gotha Program” when they coined this phrase?

In “Critique of the Gotha Program,” we do find the concept of payment according to work performed, but it is called there not the principle of socialist distribution but “bourgeois right”–that is, the same principle that prevails under the bourgeois system of wage labor, where workers are more or less paid according to the amount of work performed. But isn’t the principle of “From each according to their ability, to each according to their work” at least implied in “Critique of the Gotha Program”?

Other defects of the lower phase of communist society

Marx wrote that the lower phase of communist society includes other defects besides the retaining of “bourgeois right” in the sphere of distribution. In addition, there is the “enslaving subordination of the individual to the division of labor.” From this flows the “antithesis between mental and physical labor.” As a result of the survival of the “enslaving division of labor,” labor is most certainly not “life’s prime want.” People have not yet become the “new man” of Che Guevara’s vision, not only because they carry all sorts of psychological baggage from the old society. Far more importantly, it is the insufficiently developed level of productive forces that prevents the abolition of the “enslaving division of labor.”

Ultimately, this is the reason why the book of “Acts” author’s ideal of distribution according to need has not in fact been realized among Christians. This isn’t because they have been bad people; indeed, many of the early Christians had strong communist convictions, much like the members of the Progressive Labor Party have today.

Rather, it is because, as Marx the materialist explained, right can never be higher than the level of economic development. Will all individuals under the material conditions that will prevail in the lower stage of communism—not to speak of the transition between capitalism and communism when we have the dictatorship of the proletariat—really be able to work according to their true ability? No.

For example, virtually all the great thinkers of history—Aristotle, Newton, Marx, Einstein, to limit ourselves to the West—who did work according to their ability were born into the property-owning classes if not the ruling class itself. If these individuals had been born into the toiling classes, there is virtually no chance they would have achieved what they did.

Under the first phase of communism, the situation on this front will be tremendously improved compared to the conditions that prevail today or could have been achieved in the Soviet Union or other socialist countries. But as long as anything survives of the distinction between physical and intellectual work, as well as the equally enslaving sexual division of labor, only the relatively privileged will be able to work according to their ability. (7)

The state and economy during the transition from the lower to the higher stage of communism

Since there are no longer any classes during the lower stage of communism, the state is no longer truly a state, defined as an organization of repression by which one class holds down another class. The functions that remain that are analogous to the state are now reduced to the enforcement of bourgeois right in the sphere of distribution. There will have to be some mechanism or police to enforce bourgeois right in distribution.

For example, there might be a system of courts to settle disputes over exactly how much labor various individuals have contributed and therefore exactly how much they are entitled to draw from the social stock of means of personal consumption. There would also have to be some organization to enforce laws against shoplifting by individuals attempting to draw more from the social stock of consumer goods than they are entitled to in light of the amount of labor they have performed.

Because the distribution according to the amount of labor performed is unjust, inevitably some individuals will be tempted to correct the injustice as it applies to them through anti-social individual acts—commitment of crimes, in legal language.

The state of entire people or a bourgeois state without the bourgeoisie?

Could this organization be analogous to the state described as a “state of the whole people”? In that case, the mistake of the theoreticians of the Communist Party of the Soviet Union would be that they mistook what still was very much a transitional society between capitalism and the first phase of communism for the latter phase, where the dictatorship of the proletariat would become not only unnecessary but impossible because there would be no classes and therefore no proletariat. In that case, their mistake was still a grave one, since it implied that there was no need for the workers to keep a vigilant eye out for potential Gorbachev’s and Yeltsin’s.

Marx and Engels, however, were hostile to any concept of a “peoples state,” or the “state of the whole people,” for when the state becomes the state of the entire people it completely disappears. Lenin called the “state” during the lower stage of communist society, insomuch as we can call it a state, a “bourgeois state without the bourgeoisie.” There is no bourgeoisie or capitalist class, nor is there even a petty bourgeoisie, not even in the form of collective farmers.

Within the classless society, there is still bourgeois right in the sphere of distribution—the author of “Acts” would find this quite unjust as does PL—and to that extent, there is a need for a bourgeois state, though now without the bourgeoisie.

The difference between Lenin’s formulation in “State and Revolution” and the formulation of the 22nd Congress of the Communist Party of the Soviet Union shows the depth of the CPSU’s and the old Communist movement’s theoretical decline between the time of Lenin and the time of Khrushchev. The CPSU had already traveled far down the road of decline that led from Lenin to Gorbachev by the time the 22nd Congress met.

There will be no revolutionary breaks between the lower phase of communist society and the higher phase. More and more goods will be distributed according to need rather than the amount of labor that a particular person has contributed to society. There will be less work for the courts—or whatever they will be called—to settle disputes over the amount of work that a particular individual has contributed and their right to withdraw goods from the common stores. These organizations will meet less and less often and will finally cease to meet altogether as the number of cases they have to handle dries up. Alongside that process, the struggle against “shoplifting” will die out and with it whatever organization is needed to carry out that struggle.

At the same time, the extremely high development of the productivity of labor and the shortening towards zero of the amount of work that individuals have to contribute will lead to the disappearance of the division between manual and intellectual work. The intelligentsia will wither away because everybody will have the opportunity to be an “intellectual.”

Similarly, agriculture will have become simply another branch of industry. Even today, the difference between what has traditionally been called the “peasantry” and the people who live in cities is losing much of its significance in the countries with highly developed agriculture. The U.S. farmer of today who is highly dependent on industry, science, meteorology, and computers shows little resemblance to the peasantry of old who lived in villages isolated from the rest of the world.

Now that labor becomes life’s primary want, people will at last be able to work according to their full abilities and will draw from the common stores according to their wants. The principle of communism in the sphere of distribution as well as in the sphere of production will prevail. Even the ancient author of “Acts” would be happy. The last remnants of bourgeois right will be left behind as people receive not equally, since they are not all the same, but rather according to their needs, just like they will contribute according to their true abilities.

_______

1 The idea that held the Social Democratic parties of the Second International, formed in 1889, together was that the working class should form its own political party. Every person who believed in this principle was welcome to join the Social Democratic party. Inevitably, the Social Democratic parties attracted middle-class reformers, many of whom held views that reflected prevailing pro-imperialist and racist beliefs, as well as revolutionary-minded workers and not so revolutionary-minded workers as well.

In retrospect, we can see that the Social Democracy of 1914 represented the infancy of the workers’ movement. The first imperialist world war and then the Russian Revolution were to make clear that revolutionary and reformist tendencies constituted two political parties within the workers’ movement and could no longer co-exist in a common political party. (back)

2 When I refer to “Trotskyists,” “Stalinists” and “Maoists,” I refer to the self-identification of the political organizations and individuals active today with these titanic figures of the last century. I am not saying that Trotsky, Stalin or Mao would necessarily recognize these present-day political organizations or individuals as true continuators of their politics or ideas. (back)

3 Progressive Labor’s belief that a communist society should be established immediately after the workers come to power without any transitional stages resembles the view of early U.S. Marxist Daniel De Leon (1852-1914). De Leon was the leader of the now all-but-defunct U.S. Socialist Labor Party. Though a member of the Second International, the SLP was separate from the much larger U.S. Socialist Party, also a member of the Second International. The U.S. Socialist Party’s most famous leader was Eugene Debs (1855-1926).

Unlike today’s Progressive Labor Party, De Leon believed that a peaceful revolution could be achieved in the U.S. through the ballot box. The Socialist Labor Party advocated that industrial unions representing all workers in a given industry regardless of skill and craft be organized. When the SLP won the control of the U.S. presidency and Congress through elections, it would move to dissolve both the office of the presidency and Congress. The political state would not wither away but simply be abolished by the stroke of a pen.

Industry would then be administered by the industrial unions, which would include all workers of both brawn and brain. If the capitalists resisted, the industrial unions would lock out the capitalists and thereby break their resistance without bloodshed. Its mission completed, the Socialist Labor Party would then dissolve itself.

The Progressive Labor Party aims to build not a Leninist-type vanguard party but rather a mass party that will eventually include all workers. This all-inclusive party, playing essentially the same role as the SLP’s industrial unions, will then run the new society, though unlike the old Socialist Labor Party, PL does not believe that can be accomplished peacefully through elections.

What the old SLP and today’s PLP have in common is the belief that communism, called socialism by the old SLP, can be introduced without any transitional stages. (back)

4 Lenin’s party began as a faction within the Russian Social Democratic Labor Party, or RSDLP. The Bolsheviks, or majority faction in Russian, were counterposed to the Mensheviks, or minority faction, at the Second Congress of the RSDLP held in 1903. In the beginning, the division involved what appeared to be relatively minor organizational differences, with the Bolsheviks favoring a somewhat more centralized and disciplined party than the Menshevik faction did. In general, the Bolsheviks were the “hards,” while the “Mensheviks” were the “softs.” As the years went on, the differences developed further to the extent that by 1912 the Bolshevik and Menshevik factions had evolved into what were in effect two separate parties, though both were members of the Second International.

In 1914, after the SPD and other Social Democratic parties voted for war credits, Lenin broke from the Second International and called for a new Third International. In 1918, after coming to power, the party’s name was changed from Russian Social Democratic Labor Party (Bolshevik) to Russian Communist Party (Bolshevik) and later evolved into the ruling Communist Party of the Soviet Union. It was dissolved in August 1991 by Soviet President Mikhail Gorbachev, who had been the CPSU general secretary since March 1985, a few months before the formal dissolution of the Soviet Union itself in December 1991. (back)

5 In the Soviet Union, and also in the capitalist world, there was an ongoing debate whether the products of Soviet industry when they were sold to either state enterprises or to employees of the state were commodities. Both N. Bukharin and Yevgeni Preobrazhensky held that they were not. In his final work, Stalin, after consulting with party experts on economic theory, took the position in his “Economic Problems of Socialism in the USSR,” published in 1952, that the products of the state enterprises that functioned as means of production were not commodities but that products of other state enterprises that functioned as means of consumption were. According to Stalin, the two different forms of property in the Soviet Union—state-owned industry and the group property of collective farms that dominated agriculture—meant that items of personal consumption were still commodities. According to him, when state farms fully replaced collective farms, all Soviet products, including means of personal consumption—leaving aside foreign trade—would cease to be commodities.

However, after the 20th Congress of the Soviet Union, when criticism of Stalin was officially encouraged, the majority of Soviet economists in criticizing Stalin’s “Economic Problems of Socialism” began to claim that all the products of the state enterprises, including products that were used by other state enterprises as a means of production, were commodities. These economists rather inconsistently held that labor power was not a commodity. It was then claimed that the lever of commodity-money relations had to be developed to ensure the transition from socialism to the higher stage of communism. It seems that the Progressive Labor Party has confused this view with the one Marx expressed in his “Critique of the Gotha Program” when in fact they have virtually nothing in common.

Unfortunately, the claim that products retain their commodity character under socialism, which makes absolutely no sense in the light of Marxist theory, became the official CPSU position. In reality, the economists who accepted these views were thinly disguised supporters of “neoclasical marginalism.” These Soviet marginalists, who claimed that they were applying mathematics in their analysis of the socialist economy, came to dominate the Soviet universities’ economics departments by the 1960s. By then, marginalists were ruling the economics departments both in the East and the West.

Ironically, the Cambridge “capital controversy” between economists in Cambridge, Massachusetts, and Cambridge, England, during the 1960s revealed that marginalism was actually mathematically untenable. Despite this, marginalism continued to rule the universities in the Soviet Union, Eastern Europe and the West.

The supporters of what came to be called “perestroika” under Gorbachev then argued that in order to make full use of the “levers of commodity-money relations,” held to be vital to the transition to the higher stage of communism, the economy had to be decentralized, with enterprises encouraged to produce for profit rather than use. The views of these “reform economists” were famously criticized by Che Guevara, who realized that there was something terribly wrong with the prevailing Soviet economic theory and that such views would logically lead to the restoration of capitalism. Che proved to be right. In the end, to make full use of the “lever of commodity-money relations,” it proved necessary to restore private ownership of the means of production.

The eminent Belgian Marxist Ernest Mandel took part in the debate on whether the products of Soviet industry were or were not commodities. Mandel agreed with Stalin that means of production that were sold to other state enterprises were not commodities but that means of consumption retained their commodity character.

However, unlike Stalin and his economic advisors, Mandel held that the means of consumption retained their commodity character not because of the survival of two different forms of property, state and collective farms, but rather because the means of consumption were scarce. Because they were scarce, consumer goods produced by state industry had value and therefore retained their character as commodities.

Mandel held that commodity-money relationships won’t wither away entirely until the higher stage of communism is achieved and scarcity eliminated. Only then will consumer products be distributed free of charge and therefore lose their commodity character.

However, a close reading of Marx’s “Critique of the Gotha Program,” as well as “Capital,” indicates that this was not Marx’s view. Marx held that all products—not only means of production but also means of consumption—are not exchanged as commodities under the first stage of communism. Instead, the individual workers exchange their labor-certificates that show that they have performed a certain amount of labor. In proportion to the quantity of labor performed, the workers have the right to withdraw from the social stock an equivalent amount of means of consumption–based on the labor required to produce them–to meet their private needs. As we saw, these items of personal consumption are not commodities and the certificates that workers receive for performing a given quantity of labor are not money.

Since there was still a considerable amount of private commodity production, both legal and illegal, in the Soviet Union, classes and class struggle still existed there, and the Soviet Union was still far from fully realizing the first stage of communism, despite the claims of its leaders to the contrary. However, insomuch as the means of consumption that were produced in state-owned industry were sold to the people who worked in state-owned industry, what Marx said about the first stage of communism was already true for the Soviet Union. If these relations had been universalized—no second economy or need to put down the second economy by state repression—commodity production in the Soviet Union would indeed have ceased and Soviet society would in reality have achieved the first stage of communism. (back)

6 This sheds light on an incident that occurred in 1955 in the Soviet Union after Nikita Khrushchev became first secretary of the Central Committee of the CPSU but before his denunciation of Stalin, which came the following year. Molotov, who was then foreign minister and sat on the leading bodies of the CPSU, had published an article where he said that the “foundations of socialism” had already been fully built in the Soviet Union.

Khrushchev in a meeting with non-party intellectuals criticized Molotov’s formulation, defending the official position that held that socialism had already been fully constructed in the Soviet Union and not simply the foundations of socialism. This was consistent with the claims of the post-Stalin leadership that class struggle had already come to an end within Soviet society.

Ironically, Khrushchev had briefly supported the Left Opposition led by Leon Trotsky in 1923-1924. However, around the time the question of whether a socialist society could be fully built in the Soviet Union—Trotsky, who unlike some modern “Trotskyists,” did not deny the possibility that it was possible to carry out socialist construction in the Soviet Union alone for the time being—had become a central issue in the struggle between Stalin and Trotsky, and Khrushchev switched over to the Stalin camp.

In 1955, it was Khrushchev, not Molotov, who supported “Stalinist” orthodoxy against the “semi-Trotskyist” position of Molotov. Molotov, as had become the custom in the CPSU beginning with Stalin, was forced to recant and admit his “error” and not merely submit to the views of the majority, though future events showed that Molotov was, to say the very least, closer to the truth than Khrushchev was. Molotov, however, defended Stalin against Khrushchev’s “de-Stalinization” campaign, which he held was really a revival of the ideas of the Right Opposition led by Bukharin in the 1920s.

In 1961, under Khrushchev, the 22nd Congress of the Soviet Union adopted a formal program that replaced the revolutionary program that had been adopted by the Russian Communist Party in 1919. The new program not only claimed that a full communist society—in the sense of the higher state of communist society—could be built in the Soviet Union while capitalism continued to exist elsewhere—but that Stalin himself had claimed this was true starting in 1939.

Outdoing Stalin, the new CPSU program set a date. Communist society in the main would be completed by 1980. Neither Marx, Lenin or any other communist leader had set a date for the realization of the higher, or for that matter the lower, stage of communism.

Later, during Gorbachev’s perestroika, the more and more openly anti-communist supporters of “perestroika” used the 1961 program’s empty promise of “full communism” by 1980 to “prove” that the communist perspective was forever utopian and that the entire communist perspective had to be abandoned. (back)

7 Trotsky criticized the formulation “from each according to his ability, to each according to his work” in the “Revolution Betrayed.” And to do him justice, Molotov did so as well in “Molotov Remembers.” (back)

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