The crisis in Russia and the Eastern countries

Sixty years after the outbreak of the Russian Revolution, which shook the world to such an extent that the century-long domination of the bourgeoisie was under a real threat, demonstrations of armed work­ers in Red Square have been transformed into insolent parades of troops marching in step under the complacent gaze of their masters. The Russian bourgeoisie can contemplate its armory of death with a tranquil eye. Com­pared to what it has today the weapons used in the two imperialist carnages look like harmless toys. It can baptize its hellish arsenal with names like ‘October’ and ‘Com­munism’, and embellish its hideous class rule with citations from Lenin. And it can do all this to exorcize the specter of communism. Never in the sixty years since October 1917 has the power of the Russian ruling class seemed so sure, under the aegis of the latest tanks and the most ultra­modern missiles.

But the specter of communism is raising its head once again. World-wide the capitalist system is in crisis, posing the objective basis for the proletarian revolution. Al­though the Russian proletariat has been ground beneath the most ferocious counter­revolution capitalism has ever spawned, the economic sub-soil under the boots of the Russian ruling class is becoming more and more unstable. It is the crisis of capita­lism, and nothing else, which after fifty years of deadly silence, will re-awaken the Russian proletariat which will be led into the whirlpool of revolution by the workers of Eastern Europe.

In this initial article we intend to demon­strate the existence of the general crisis of capitalism in Eastern Europe by showing the particular form it takes in the Russian bloc.

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A few years ago, to talk of an economic crisis in the Russian bloc, to say that the contradictions which undermine decadent capitalism are the same in the East as in the West, would give rise to incredulity or sarcasm among the trusted defenders of the ‘socialist countries’. You could also hear the respectable representatives of the liberal bourgeoisie in the West going into ecstasies over the fact that, while the rest of the world was already in crisis, the phenomena of economic crisis (falling growth rates, inflation, unemployment) appeared to be absent in these countries. How marvelous to find at last an oasis of economic calm, with such wonderfully regular patterns of growth: And just think -- a Russia that was semi-feudal before 1914 had now overta­ken the USA in the production of steel! This sort of thing won the envious admira­tion of the western capitalists and brought cries of jubilation to the Communist Parties and their ‘critical supporters’, the Trotsk­yists. But admiration and jubilation soon changed to disquiet: the economic crisis is over there as well: There is no magic potion in the witches’ cauldron of decaying capitalism, whether it goes by the name of ‘socialist planning’ or ‘Mao Tse-tung Thought’.

In the world press today there are more and more articles pointing out the phenomena of crisis in the Russian bloc. The represen­tatives of capital in Eastern Europe have been to Canassa to ask the West for more and more credit from the big international banks.1 And the Trotskyists, who have been playing second fiddle to the tune about ‘the uninterrupted development of the pro­ductive forces’ in the East, are suddenly struck dumb in their ‘critical support’ for these ‘societies in transition to socialism’. Today they are much happier making a big noise about ‘the democratic opposition’.

Why has this concert of eulogies about ‘socialist planning’ been reduced to a whis­per? In order to understand this, we have to go back to the past, to the appearance of the Five-Year Plans in the 1930s.

The so-called ‘immunity to crisis’ of the Russian bloc

1. The ‘Planning’ of Decadence

The great myth of the Russian bourgeoisie since the Stalinist period of the Five-Year Plans is the ‘immunity to crisis of the socialist world’. This is taken up by all the Stalinist and Trotskyist parties of the world when they advocate ‘radical’ measures like nationalizations and ‘the expropria­tion of private capital’.

Thus, according to them, the countries of the East and all the third world countries where there is more or less complete stati­fication of the economy constitute a ‘world apart’ in the capitalist world. The juridi­cal suppression of private ownership warr­ants the label of socialism, either ‘pure’ or ‘degenerated’. For the Trotskyists the one weakness of this ‘new system’ resides in the parasitism of the ‘bureaucracy’, which uses and abuses ‘socialist property’ for its own personal benefit. It will be enough for the workers to get rid of the ‘bureaucracy’ through a ‘political’ revolu­tion which doesn’t touch the ‘socialist’ economic base for the ‘betrayed revolution’ to be finally completed. Then the workers will really be able to enjoy all the bles­sings of ‘socialist property’. For the Trotskyists, the fact that Russia is a ‘workers’ state’ is proved by the economic miracle of the 1930s. According to the Trotskyists this is the miracle of socialism itself:

“Socialism has proved its right to con­quer, not in the countries of capital, but in an economic arena which covers one-sixth of the surface of the globe; not in the language of dialectics, but in the language of iron, cement and electricity.” (Trotsky, The Revolution Betrayed)

Such an assertion would be funny today if one didn’t know what really lay behind this ‘right to conquer’. More than ten million dead during the first Five-Year Plans2; the proletariat reduced to a state of physi­cal poverty worthy of the horrors of the primitive accumulation of capital at the beginning of the nineteenth century; the headlong march towards an imperialist war which cost seventeen million victims. Such is the balance sheet of this ‘brilliant development’ Trotsky enthused over. Never in the history of capitalism has the dia­lectic of ‘iron, cement and electricity’ uncovered the barbarism of the real dialec­tic of capital, the dialectic of blood and iron.

The fact that the growth of production indices has never been a sign of socialism is a truism which has to be repeated today after fifty years of Stalinist and Trotsky­ist lies. For marxism, the higher the indi­ces of production, the greater is the abso­lute and relative pauperization of the work­ing class, which is forced to sell a labor power which is devalorized the more accumu­lation gathers apace. When the Trotskyists talk about the growth of the productive forces, they ‘forget’ to say that in the real period of transition towards socialism -- that is when the proletariat exercises its dictatorship in a system which is still capitalist -- the growth of production ‘indi­ces’ (in so far as one can talk about ‘indices’) will take the form of the abso­lute and relative development of the consu­mer goods sector. The sector of production goods, on the other hand, is the sector par excellence of capitalism and its infernal cycle of accumulation. Socialism is not proportional to the development of Department I, it is inversely proportional to it. The very condition for communism is that the whole of production is orientated towards the satisfaction of social needs, even if a certain amount must be set aside for enlar­ged social reproduction. But, much more than an arithmetical relationship between these sectors, it is the growth of consump­tion which marks the progress the proletar­iat makes towards replacing exchange value with use value, until the law of value has completely disappeared. Although the Octo­ber proletarian revolution had the task -- with the limited means left over by the civil war -- of developing the consumer goods sector, the dialectic of ‘iron, cement and electricity’ meant an inversion of the ratio between the two sectors, to the benefit of Department I -- not that the figures show an absolute growth of consumer goods either. Thus in 1927-8 (before the Five-Year Plan) the relationship between the consumer goods sector and sector of producer goods was 67.2% as against 32.8%. In 1932, after the first Five-Year Plan, it was already 46.7% against 55.3%. On the eve of the war the consumer goods sector was no more than 25% of overall production. This proportion has remained identical ever since.3

Year	World Industrial Production	Means of Production	Means of Consumption
1917	100	38.1	61.9
1922	100	32.0	68.0
1928	100	39.5	60.5
1945	100	74.9	25.1
1950	100	68.8	31.2
1960	100	72.5	27.5
1964	100	74.0	26.0
1968	100	73.8	26.2
1971	100	73.4	26.6

Respective ratio of the means of production and means of consumption in the world volume of industrial production (in percentages).

This ‘right to conquer’ of capitalism in Russia, taken up by the most brutal counter­revolution in history, expressed itself in the ‘language’ of figures, so dear to Trotsky, by a 50 per cent fall in real wages between 1928 and 19364, by a trebling of the productivity of labor, in other words of the rate of exploitation. With such a rhythm of exploitation the USSR was obviou­sly able to surpass the industrial produc­tion of Britain and soon equal that of Ger­many on the eve of the war.

The Bordigists5 have seen in the rapid growth figures in heavy industry proof that this represented the development of a ‘young’ capitalism, which thanks to its ‘youth’ could not yet be contaminated by the general crisis of capitalism which was brin­ging down the whole world. In short, as with the Trotskyists, the Bordigists see the USSR as a ‘special case’. However, in a table which was reproduced in a recent Programme Communiste (see below) it appears that:

-- the highest rate of growth was not achie­ved in the period of the Five-Year Plans, but during the period of reconstruction: 1922-8: +23%;

-- the fall in the annual growth rate which manifested itself during the Five-Year Plans

-- thus in the midst of the world economic crisis -- followed the world-wide rhythm of the slowing-down of accumulation since the beginning of the century6: 1929-32: +19%; 1933-7: +17%; 1938-40: +13.2%.

As we shall see later, this fall has contin­ued even more markedly ever since.

 

Rate of growth of Russian industry

Period	Plan	Rate of growth: annual average
1922-28	Before the Plans	23.0%
1929-32	1st plan	19.3%
1933-37	2nd plan	17.1%
1938-40	3rd plan (3 years)	13.2%
1941-45	WAR	---
1946-50	4th plan	13.5%
1951-55	5th plan	13.0%
1956-60	6th plan	10.4%
1961-65	7th plan (7-year-plan 1959-65)	8.6%
1966-70	8th plan	8.4%
1971-75	9th plan	7.4%
1976-80	10th plan	6.5%

Calculations based on figures in Narodnoe Khoziaistvo SSSR.

How are we to explain, in spite of this declining rate of growth, the fact that there was still considerable growth in this, one of the weakest of the industrialized coun­tries? The Stalinists use this as irrefut­able proof of ‘the superiority of socialist planning over capitalism’. They ‘forget’ one little thing: the USSR began from an extremely low level (it only regained the 1913 level of production in 1928) and was able, without totally stagnating, to rein­force or at least maintain its production in relation to world production. But the immediate slowing down of the rate of accum­ulation after that shows that Russia was not able, by means of some kind of ‘primitive accumulation’, to achieve the rates of growth of the major capitalist countries at the end of the nineteenth century. In contrast to these countries, which went through a long period of accumulation with a regular growth in the rate of accumulation, the highest figures for Russia were reached over a period of four years; and this is according to offi­cial statistics. If we don’t use ‘optimis­tic’ figures, we would have to reduce the whole scale by 30 or 40 per cent.7

Despite all the state capitalist measures which it carried out at such a frenzied pace, the USSR did not escape the general crisis which followed the 1929 crash. The official figures, even though they are obviously in­flated by the Russian economists, cannot hide the reality of a fall in production; they show that the crisis was present in Russia and that it followed the same rhythm as the rest of the capitalist world.

What then was the reason for autarky? Was it that Russia was able to escape the bank­ruptcy of 1929? In fact Russia was in the same situation as the other countries, it faced the same difficulty in exporting and importing. By the end of the 1930s Russian foreign trade was one-third of what it had been in 1913.

 

Value of imports of the United States, of Europe and of the USSR from 1928 to 1938 (according to the League of Nations, Annuaires Statistiques).

The Five-Year Plans were financed at the price of raging inflation: from 1928 to 1933 the mass of money went from 1.7 billion rubles to 8.4 billion. In 1935 the ruble had to be devalued by 80 per cent (cf Bord­iga, Economic and Social Structure of Russia). The relative ‘imperviability’ of the Russian frontiers to world trade thus expressed itself in total bankruptcy; as it did with the Nazi economy on the eve of the war. But, the Trotskyists and Stalinists will say, Russia’s part in world production between 1913 and 1938 went from 4% to 12%; the indices of production trebled or quad­rupled in a few years. What was the reason for this ‘miracle’? It was the same as for the miracles achieved by Germany: ‘socialist’ Russia threw herself body and soul into the war economy. Goring’s “Guns not butter” was paralleled by Stalin’s prosaic saying “you can’t make casseroles when you’re making cannons”.

1 For the first time in the history of the Russian bloc, a country like Hungary was obliged to open all its bank accounts to the IMF, to prove its solvency and get the credit it needed.

2 According to Souvarine, when a census was made of the population of 1937, instead of the 170 million anticipated, only 147 million ‘socialist citizens’ (the 1928 figure) were found. After having liquidated the results and the ‘counter-revolutionary’ statisticians, another census in 1939 finally managed to find the 170 million. It’s difficult to know how, between the cemeteries and the concentration camps, these 23 million managed to reproduce themselves.

3 Figures taken from Annuaire Statistique du COMECON, 1971.

4 See L’URSS, Telle qu’elle est, by Yvon (1937), the testimony of a French worker who went to work in Russia and saw that the real monthly wage had fallen from 800kg of bread in 1924 to 170kg in 1935, finally settling at 260kg in 1937.

5 We are talking about Programme Communiste in France and Italy, and Il Partito Comunista in Italy. Both consider that capitalism in Russia only entered its ‘mature’ phase in the 1960s, after going through a ‘juvenile’ phase of expansion in the Five-Year Plans. Bordiga even saw Stalin as a ‘romantic revolutionary’ (sic) produced by a ‘tumultuous’ capitalist development.

6 See The Conflict of the Century, by Fritz Sternberg.

7 Souvarine, who examined many of the contradictory official declarations shows, “that not one figure has any precise meaning”.