__TITLE__
Socialism
and
Capitalism:
Score
and
Prospects
__TEXTFILE_BORN__ 2007-05-26T20:31:29-0700
__TRANSMARKUP__ "Y. Sverdlov"
PROGRESS
PUBLISHERS
MOSCOW
1971
[1]Translated by Jim Riordem
Edited by Yuri Sdobnikov
Designed by Yuri Klodt
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__COPYRIGHT__ First printing 1971As the year 1917 recedes into the past, the October Socialist Revolution in Russia becomes ever more meaningful and its immense impact on the destiny of mankind more apparent. History has never known events that have so forcibly stamped their mark on social development. The October Revolution in Russia opened the era of revolutionary renewal of the world.
__ALPHA_LVL2__ 1. A New Era Is BornThe bourgeoisie came to power at the time of the English Industrial Revolution of the 17th century and the French Revolution of the 18th century. Once they had disposed of the feudal aristocracy and broken the royal power, the bourgeoisie began to flaunt the slogans of liberty, equality and fraternity merely to clear the way for ultimate economic and political domination. It was not liberty that prevailed, but a new form of exploitation of the labouring masses; not equality, but a new and deeper chasm of social and economic inequality; not fraternity, but a savage struggle between antagonistic classes. In the period between 1789 and 1871, the bourgeoisie played a comparatively progressive role in social development. This was not to last long. At the turn of the century, the bourgeoisie found itself on a downgrade, bourgeois democracy increasingly giving way to reaction all along the line. Free-enterprise capitalism evolved into monopoly capitalism. The anti-feudalist bourgeoisie gave way to reactionary finance capital which, in collusion with the surviving feudal lords, took up the cudgels against the rising socialist forces.
The salient feature in world affairs after 1871 was the slow maturation and strengthening of the proletariat. It 5 served notice on the world of its determination to change society when the French workers first shattered the bourgeois state machine in the very heart of capitalist France and established their own revolutionary government---the Paris Commune. In the years that followed, imperialism itself created the material conditions for transition to socialism, and the proletarian revolution became historically inevitable. The labour movement gathered momentum and again and again shook the edifice of capitalism. Yet it was to be some time before the working class could achieve its ultimate aim of gaining power.
Early in the present century, the centre of the world revolutionary struggle shifted to Russia. Marx himself had foreseen this possibility when he wrote, in 1877, that ``the revolution begins in the East, hitherto the unbroken bulwark and reserve army of counter-revolution".^^1^^
The great honour and responsibility of commencing the historical rejuvenation of the world on socialist principles fell to the Russian proletariat. At the turn of the century, the workers of Russia took up the battle against tsarism, the landowners and the bourgeoisie. Russia was then'the weakest link in the imperialist chain and the focus of its contradictions. Moreover, by then the conditions necessary for the victory of socialism had formed on Russian soil. The development of her productive forces had created an economic basis for socialist revolution, and the Russian workers stood out as the most revolutionary-minded, the best organised and the most experienced in class struggle. At their head stood a Marxist-Leninist party guided by advanced revolutionary theory and tempered in many class conflicts. It channelled into a single revolutionary tide the workers' struggle for socialism, the country-wide campaign for peace, the peasants' drive for land and the national liberation struggle of the oppressed peoples of the Russian Empire; it effectively directed these forces to the overthrow of capitalism.
Russia became the cradle of the proletarian revolution; the course of history brought her workers to the forefront of the world socialist and revolutionary movement. Victory in the first socialist revolution came as a logical consequence _-_-_
~^^1^^ K. Marx and F. Kngels, Selected Correspondence, Moscow, 1965, p. 308.
6 of the long battle of Russia's Leninist Party for leadership of the working class in all three Russian revolutions: in 1905, and in February and October of 1917. This struggle also embodied the best revolutionary traditions of workers in other lands, among them the valiant English Chartists, the French and German martyrs of the 1848 barricades, the immortal Paris communards, and the workers of America.Marx once said revolutions were the locomotives of history. Although the definition applies to all social revolutions, it best expressed the October events resulting as they did in an unprecedented acceleration of social progress and serving as the most powerful motor of history the world had ever seen.
The cosmopolitan nature of capital led to the global proliferation of capitalist societies; yet it was merely the substitution of one form of class oppression and exploitation for another. The events of October 1917 brought in their wake the abolition of all exploitation and class tyranny, and the rooting out of the cause: private property in the means of production.
The October Revolution in Russia marked the end of the social pre-history and the start of real history: it was the inauguration of socialist society, with mankind shedding the last form of slavery---capitalist, or wage-slavery.
The October Revolution in Russia fully bore out Lenin's theory that socialist revolution would initially win out in one country. But it was also an international proletarian revolution. Integration of the capitalist world economy and the international nature of the working class spring from the capitalist mode of production, and find expression in the world-wide character of the revolution, while the uneven economic and political development of capitalism leads to proletarian revolutions in various countries at different times.
The global significance and international character of the October Revolution were apparent in the victorious solution of the tasks that had matured not only within the confines of Russia but throughout the world. The revolution marked the first stage in the world socialist revolution and provided a powerful base for its further progress. World events have confirmed that the replacement of capitalism by socialism is historically inevitable, and that the working class alone can 7 save society from the horrors of capitalism in its death throes.
Contrary to enemy forecasts, the October Revolution was neither a passing historical anomaly, nor a chance deviation from the mainstream of social development, nor yet an isolated incident in the history of one nation. The socialist revolution in Russia showed that capitalism had outlived itself, that it had no future, and that in its evolution it had generated the objective and subjective prerequisites for mankind's transition to a new and higher social structure.
Although it had outlived its day, the capitalist class will not voluntarily relinquish power. Indeed, world reaction used its entire arsenal against the Russian revolution, the Russian workers and their allies. It poured all manner of filth and slander on socialism, employed the whiteguard counterrevolutionaries and foreign intervention, war and economic blockade, plots and conspiracies, sabotage and terror---all to destroy the Soviet power, restore capitalism, and halt the course of world-wide socialist revolution. But all these attempts failed.
The October Revolution triumphed under the banner of proletarian internationalism. For many decades progressive workers of Britain, France, Germany and the U.S.A., of nations big and small, had fought for the victory of socialism. And when, at last, their cause triumphed in a country with one-sixth of the world's land surface, the world's workingclass movement rose to new heights. Socialist Russia, which had provided a powerful impulse to the movement all over the world, herself received resolute support from the workers of the world.
The imperialists and their agents in the working class and their accomplices, factionalists and splitters in the communist and working-class movement, have resorted to various shifts and dodges to undermine and disrupt the moral and political unity of the international proletariat, all the world revolutionary forces and the world's first socialist state. But there is no power in the world that can separate the Soviet Union from the world's workers, nor separate the latter from the Soviet Union. The Soviet people are assisting revolutionary and liberation movements, the peoples of other socialist states, the workers of industrially-advanced capitalist countries and of Asian, African and Latin American countries, 8 and mass democratic movements everywhere. In turn, the peoples of the world have pledged their support, and continue to do so, for socialist and communist construction in the U.S.S.R.
This solid brotherhood, which has become a regular feature of contemporary development, has been and will continue to be an inexhaustible source of strength for the world revolutionary process. This mighty alliance is a great force that is doing much to strengthen the hegemony of the working class in world social development and fortify socialism's international positions. As the Declaration of the 1957 Moscow Meeting of Representatives of Communist and Workers' Parties pointed out, the vital interests of workers of all countries today require the support of the Soviet Union and all the socialist countries pursuing a policy of peace throughout the world and providing a bulwark for peace and social progress.
The triumph of the October Revolution and the emergence of the Soviet Union signified a great turning-point in world politics, economics and ideology, a turning-point in the destiny of society---from the old capitalist world to a new socialist world---a most profound change in the minds and lives of hundreds of millions of people. The October Revolution heralded the era of socialist revolutions, an era of liberation of colonial peoples from imperialism. The last half-century has borne witness to the triumph of the great ideas and principles of the October Revolution.
Since October 1917, world revolutionary events have radically altered the face of the earth (see Table 1). The socio-political map of the contemporary world shows, first, that a mass movement is sweeping the world for the universal abolition of capitalist exploitation, social and national oppression, and poverty, and for the establishment of peace, democracy and socialism. Imperialism has forfeited its dominance over the bulk of mankind once and for all.
The second distinctive feature of contemporary society is the peoples' resolution to take the path of socialism and communism. Imperialism has been helpless in preventing the birth and progress of the world socialist system, which has now been firmly established on three continents comprising one-quarter of the world and embracing more than one-third of the world's population---more than 1,000 million people, 9 who have cast off capitalism and are building socialist and communist societies.
Third, the colonial system of imperialism is being incinerated in the flames of the national liberation movement. The Russian revolution also marked a turning-point in the course of the national liberation movement, uniting the struggle of the proletariat and other revolutionary forces for socialism and the struggle of oppressed peoples against colonial tyranny. The national liberation revolutions have destroyed colonial empires and dealt a crushing blow to the citadels of colonialism. Dozens of independent national states have emerged on the ruins of the colonial empires. The revolutionary democratic forces of several newly free states are now directing their development along noncapitalist lines.
Table 1 Territory and World Population by mid-1970 Territory Estimated population mln. sq km % of total mln. people %f total The world ....... 135.8 100 3,615 100 Socialist countries . . . 35.2 25.9 1,215 31.4 Of which U. S. S. R. 22.4 100.6 32.6 9.4 68.0 the U. 16.5 74.1 24.0 6.9 50.7 S.S.R., 242.8 2,400 705 205.3 1,695 196', Mosct 6.7 66.4 19.5 5.7 46.9 )W, 1970, Other countries . ... Advanced capitalist countries ..... Of which U. S. A. . . ... Developing nations . . . Source: The Economy of p. 92 (Russ. ed.).Two worlds, that of socialism and capitalism, have been confronting each other internationally ever since the socialist revolution took Russia out of the sphere of capitalist laws. This ushered in an era of contention, coexistence and competition of the two systems, an epoch of decline, disintegration and ultimate demise of capitalism, and of growth, fortification and ultimate triumph of socialism throughout the world. Capitalism cannot extricate itself from 10 the deep crisis that has seized bourgeois society from top to bottom, engulfing its economic and political order, its productive forces, domestic and foreign policy, and its entire ideological superstructure.
It is ridiculous to seek some kind of conspiratorial force or export of revolution behind the world proletarian revolution, the disintegration of colonialism, and the expansion of the world revolutionary movement. Lenin roundly condemned the ``Left''-wing Communist efforts to ``spur'' revolutions; this he branded as completely at odds with Marxism, which had always rejected the ``spurring'' of revolutions which matured in step with the exacerbation of class contradictions. Lenin and the Communist Party of the Soviet Union have always most vigorously resisted any attempts to force the pace of revolutions by means of war, and adventurist theories of exporting revolution, which always find adherents among the petty bourgeoisie, especially at crucial moments in history. The socialist revolution is not a palace revolt, nor is it a putsch by a small band of heroes. It is a movement embracing the great mass of the working people.
Imperialist policy-makers, particularly those in the U.S.A. who consider it their duty to police the world and exploit it, resort to all manner of plots, adventures and export of counter-revolution in order to hamper social progress and underpin the tottering edifice of capitalism. However, none of these policies can modify historical necessity; in fact they merely serve to fortify it.
__ALPHA_LVL2__ 2. Impact of the October RevolutionThe historic significance of the October Revolution is not confined to its revelation of the coming end of world bourgeois domination. The succinct yet forceful description Lenin gave of its international impact was that the ice had been broken, the path cleared and the way shown. He saw the international importance of the October events not just in their effect on revolutionary movements elsewhere, but in that the essential pattern of the Russian revolution was bound to recur on a world scale.
The revolutionary changes in the U.S.S.R. led to the 11 complete and final victory of socialism and transition to communist construction. The years since 1917 have provided a unique test of the vitality and strength of the socialist economy. They have amply demonstrated that the socialist system is a superior form of social organisation in peace and in war.
As pioneers on a difficult and uncharted journey, the Soviet people may pride themselves on having overcome the obstacles in building socialism while surrounded by hostile capitalist powers; they have transformed a weak and backward country into a mighty industrial and agricultural power which can boast a high economic and cultural standard. The three essential ingredients in Lenin's plan for building socialism were socialist industrialisation, the collectivisation of agriculture and a cultural revolution. These aims have been realised.
Soviet industrialisation was a great achievement of the working class, who spared no effort or material sacrifice to take their country out of its state of backwardness. In a relatively short time, by its own efforts and without outside help, the country created a large-scale socialist industry with a stable high rate of development and an advanced technology that has placed it among the world's leading scientific and technological powers. By 1941, after the first three fiveyear plans, the U.S.S.R. had attained complete economic autarky and had become a powerful industrial state.
At long last, a solution was found for the age-old peasant problem---the transformation of tiny scattered peasant farms into socialist co-operatives largely settled the issue of socialism in the U.S.S.R. Literally millions of small peasant farmers voluntarily joined the collective farms (kolkhozes). Alongside these Soviet state farms (sovkhozes) spread throughout the countryside. Collectivisation once and for all rid the countryside of the curse of the kulak cabal, of class stratification, of impoverishment and starvation. Once Soviet farming had been established on a large-scale, well-equipped socialist foundation, a genuine revolution occurred in economic relations and in the whole pattern of the peasant way of life.
The cultural revolution liberated the common people from their ignorance and spiritual enslavement, and made available to them all the cultural riches accumulated by mankind 12 over the ages. The intelligentsia grew out of the ranks of the working people. The country in which the vast bulk of the people had been illiterate took a giant step forward towards the summit of science and culture.
It required titanic efforts from the Soviet people to turn backward Russia into an economically advanced and culturally ilourishing socialist power. It was no easy task to overthrow the power of the bourgeoisie, the landowners and the tsar in a backward peasant country. But it was even harder to defend the Soviet power against counter-revolution and foreign intervention, and to set up a viable economy and reshape agriculture in the exasperating internal and external conditions. As Lenin had rightly foreseen, ``it was easier for the Russians than for the advanced countries to begin the great proletarian revolution, but ... it will be more difficult for them to continue it and carry it to final victory, in the sense of the complete organisation of a socialist society".^^1^^ Socialist construction was made incredibly difficult by the economic, technical and cultural backwardness that was the legacy of tsarism. Furthermore, for virtually thirty years the U.S.S.R. stood alone as the world's only socialist state, due to delay in the development of the world socialist revolution. This complicated still further the construction of socialism. Nevertheless, the Soviet people managed to accomplish their task, consciously accepting the tremendous sacrifices and deprivations involved for the sake of securing the independence of their country, boosting the nation's resources and fulfilling their internationalist duty.
The Communist Party of the Soviet Union (C.P.S.U.) led the Soviet people to victorious socialism through hard battles against the ``Left''-wing Communists, the Trotskyites advocating ``revolutionary war'', the Right-wing opportunists, national-deviationists and other groups hostile to the ideas of Leninism, and against the doubters, the capitulators and the adventurists. Events have fully borne out the correctness of the policies of Lenin and the Communist Party he founded; they have refuted the prophesies of Trotsky about Thermidor reaction, the ``bourgeoisification'', and the imminent demise of the revolution.
Whatever aspect of social relations we examine today, _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 29, p. 310.
13 great changes are apparent as a consequence of the revolution and socialist construction.The prime political accomplishment is the establishment of a new type of state, a socialist state, and of a higher form of democracy---socialist democracy. In social relations, the people's age-old dream has come true: parasitic classes of exploiters are a thing of the past; no more is man oppressed by man. The working class has come to be the governing force, and the peasants now farm on socialist lines. Soviet society consists of the classes of workers and collective farmers, who are not divided by any antagonistic differences. The people's intelligentsia is taking an active part alongside these friendly classes in building communism.
The revolution in the ideological field has been profound in content and far-reaching in social significance. MarxismLeninism, the ideology that fully dominates political thought in the Soviet Union today, is a truly scientific world outlook. A socialist culture has taken shape, and collective principles have come to dictate relations between Soviet people.
Radical changes have also taken place in material production, the decisive sphere of man's social activity. The paramount economic gain lies in establishing public ownership of the means of production. Soviet power has nationalised industry, the railways, banks and the land. It has abolished the landed estates and realised the peasant's ageold dream of land for himself. In a relatively short period, the Soviet people built a strong socialist economy and now, on this basis, they are successfully tackling their main economic task of building the material and technical base of communist society.
From 1913 to 1969, Soviet industrial output increased nearly 85 times, and that of the U.S.A. 8 times, of West Germany 6, Britain about 3, and France about 4 times. In economic power, the Soviet Union is today the world's No. 2, all the while narrowing the gap with the U.S.A. and fast becoming the world's leading industrial country.
Far-going qualitative changes are now proceeding throughout all branches of the socialist economy, particularly the chemical industry, precision instrument and machine-- building, radio electronics, fast transport, atomic energy and 14 space exploration. All this symbolises the industrial, scientific and technological buoyancy of the Soviet state. In 1967, a new record of over 100 million tons of steel was reached; that year electric power generation attained a 370-fold increase over 1913.
Notwithstanding its multifarious problems at various stages, the Soviet economy has always maintained its upward trend. The rate of scientific and technological progress and of the application of the latest inventions and modifications has accelerated. All the leading branches of the economy have been re-equipped. The output of consumer goods has been greatly increased. Labour productivity has considerably risen due to the workers' growing initiative and to the introduction of the latest machinery and devices, and mechanisation and automation in all economic sectors. The Soviet Union's scientific and industrial achievements have enabled it to equip the Soviet Armed Forces with the latest military hardware. The Soviet Union's prestige in world affairs has been further enhanced.
The 24th Congress of the C.P.S.U. decided that the main task of the current, Ninth Five-Year Economic Development Plan of the U.S.S.R. for 1971--75 is to bring about a considerable upswing in the people's material and cultural standards through a high rate of development of socialist production, its increasing efficiency, scientific and technical progress and ever faster growing productivity of labour. The line of bringing about a substantial rise in the working people's welfare determines the overall orientation of the country's economic development over a long term, constituting one of the most important prerequisites for the further rapid growth of production.
As the five-year plan is fulfilled, the national income of the USSR is to go up by 37--40 per cent, including the consumption fund by 40 per cent and the accumulation fund by 37 per cent. Industrial output is to go up by 42--46 per cent, and average annual farm output by 20--22 per cent. Real incomes per head are to increase by almost one-third. Heavy industry is to remain the solid basis of the country's economic might, and of the people's growing living standards, but the accumulated production potential makes it possible in the new five-year period to have the output of consumer goods develop somewhat faster than the output of producer goods. 15 The plan provides for an increase of consumer goods output over the five years by 44--48 per cent, and of producer goods, by 41--45 per cent. Labour productivity in industry is to go up by 36--40 per cent, as compared with 32 per cent in the 1966--70 period.
The economic reform is gaining scope and momentum in the country and is having a beneficial effect on the national economy. At the factories and mines that have adopted the new system, production is more efficient, labour productivity is rising faster, and plant and raw materials are more rationally utilised. The guiding aim behind this reform is to improve economic efficiency and to make the utmost use of the advantages of the socialist system. The important economic and social measures now being put through are consistent with the further improvement of socialist democracy.
The Soviet people look on their communist construction and improved economic, political and military strength not simply as an essential domestic affair but as their vital internationalist duty. All forces of socialism and revolution have a stake in what is going on inside the U.S.S.R., because their own interests require the Soviet Union to prevail in the economic competition with capitalism in as short a period as possible. As they advance their economy, the Soviet people reinforce the defence capacity of the entire socialist community, toiling for their class brothers wherever they may be, and labouring for the cause of socialism and all mankind. The general line of the C.P.S.U. in building communism is to combine the national and internationalist duties of the Soviet people.
The Soviet people have been effectively pursuing their mission as pioneers of socialism. The Soviet system, the socialist economic structure and the policy of the C.P.S.U. have withstood the severe test of time. Soviet attainments have shown the world that the working class is capable not only of destroying the old world, but of creating a new and incomparably more progressive society, the most just and advanced system---communism.
International events have provided an answer to the question of future development. History has confirmed that socialism is the only social and political order genuinely capable of solving the social problems confronting humanity. Socialism, whose inevitability had been forecast by Karl 16 Marx and Frederick Engels, whose construction plan had been mapped out by Vladimir Lenin, is now a reality in the Soviet Union. The peoples of the world can now see socialism in practice instead of reading about it in books and manifestoes. They have gained a science verified by the experience of socialist construction and a viable socialist society.
The Soviet people have borne the main brunt of combating imperialism; in defeating fascism in World War II they have also fulfilled their internationalist duty to the whole working-class movement, and to all mankind. The last war was a severe test of the viability of the Soviet state and social system. By their crucial contribution to the defeat of fascism, the Soviet people helped to rescue world civilisation and save the people of the world from fascist bondage and destruction. But for this contribution, socialism today would not be scoring its successes and developing in depth and breadth, the world working-class movement would not be on the upgrade, and the national liberation movement would not have broken down colonialism.
The international proletariat can well regard the U.S.S.R. as its own land. By building socialism, the Soviet working class and the whole people have under the leadership of their Communist Party erected a strong base for the revolutionary movement of the proletariat and all downtrodden classes and nations. They have enriched the world revolutionary forces with experience, equipped them with knowledge of how to attain both the immediate and ultimate goals of the working class, and to ensure the establishment and progress of the new social system. Thus the working class and the entire people of the Soviet Union have fulfilled their greatest internationalist, revolutionary duty.
It has fallen to the Soviet Union to play a highly responsible part in world affairs. As the centre of the world revolutionary movement, the U.S.S.R. bears an immense international obligation to the world's working class and to all opponents of imperialism. The Soviet people are justly proud to hear the fraternal Communist and Workers' Parties say that the Soviet people and the Soviet Communists are true to their internationalist duty and have lived up to their high reputation as the homeland of Leninism.
Today, the Soviet Union is the chief economic, political __PRINTERS_P_17_COMMENT__ 2---235 17 and military bulwark of the world socialist community, which itself is a magnificent achievement of the world's working class.
The U.S.S.R. renders fraternal assistance to other socialist countries, and smooths and accelerates the advance to communism for the whole community of free nations. It stands as a redoubtable bastion, providing encouragement to the communist and working-class movements both in the industrialised and in the less developed countries of the capitalist world. It sustains peoples in their efforts to wipe out the last vestiges of the colonial system, to consolidate and to attain both political and economic independence. It is doing all in its power to save mankind from the threat of thermonuclear war, thereby performing an invaluable service to humanity.
Soviet success in building socialism and communism is due to the fact that the C.P.S.U. has followed undeviatingly Marxist-Leninist policies, boldly providing answers to the new problems engendered by life, giving correct evaluations of changing events, and finding ways of using concrete historical conditions in the interests of the revolution. The indestructible ties with the people and the cohesion of the C.P.S.U.'s ranks have enabled the Party to make the most of Soviet achievements in fortifying the world positions of socialism and of all the forces working for a revolutionary renewal of the world on socialist lines.
The experience of October 1917 and of subsequent Soviet progress has demonstrated that socialism is the only alternative to the ills of exploitation and social and national subjugation. Furthermore, it is now axiomatic that nations can arrive at socialism only by way of a socialist revolution.
Soviet experience has further shown that the working class can only pursue their mission as creators of the new society in firm alliance with non-proletarians, including peasants. An essential law of the proletarian revolution and socialist construction is that leadership must be provided for the non-proletarians by the working class, with the Marxist-Leninist Party as its nucleus. Only with the hegemony of the working class, which rallies all the working people, is it possible to build and strengthen a society in which people are held together by relations of brotherly solidarity and comradely mutual assistance.
18Soviet history shows that a country wishing to make utmost use of the fruits of the scientific and technical revolution in the interest of society as a whole and rapidly boost its productive forces in a balanced manner must base its economy on socialist property in the means of production. It came as no surprise that the world's socialist pioneer has also pioneered the peaceful uses of atomic power and space research, and leads the world in scientific and technological progress. Illustrative of the immense potential of dynamic communism are its sophisticated space rockets and inter-planetary spaceships, powerful nuclear power stations, Soviet manned space ilights, the landing of an automatic station on the surface of Venus, flights round the moon and return to earth, and automatic docking of space equipment in orbit.
The progress of Soviet society is proof that the agrarian and peasant problem can only be solved by a radical transformation of agriculture in a socialist way, through the voluntary association of peasant farmers in agricultural cooperatives to save them from privation and rank poverty, and assure them of progress towards a life of plenty.
The Soviet people have come a long way since 1917, and have shown in practice that socialism alone, by turning the labouring people into masters of all the resources, enables them to develop social production and to distribute material goods in the interests both of society as a whole and of each individual, and use the national income as best befits the interests of society. Socialism alone puts an end to national oppression and creates all the necessary conditions for a voluntary union of free and equal nations and nationalities within a single state.
Soviet experience has shown that socialism eliminates the mercenary motives that underlie relationships in a class society. It opens the way for man's all-round development and genuine freedom. For the first time in history it establishes a basis for equality between people: everyone's identical relation to the means of production and release of all working people from exploitation. There lies true social justice, the supreme evidence of the individual's true freedom.
The basic human rights are effectively guaranteed in the Soviet Union: equal right to work, equality of men and women in every sphere of social life, the right to receive an education and paid holidays, the right of all citizens to 19 all-round physical and intellectual development, and to material security in old age, in the event of sickness or disability. Socialism gives people a great sense of certainty in their own and their children's future, a secure feeling that their affluence is permanent, and this engenders a spirit of historical optimism.
World events in the past half century have borne out the historical justice of the October Revolution and the superiority of the Soviet socialist system. At the same time, they have refuted imperialist claims that capitalism is being renewed and given a new lease of life, as an ``affluent society" for all. With the vices of their system staring them in the face, bourgeois politicians are forced to resort to social mimicry and manoeuvre. This simply goes to show that socialism has become a living revolutionary example undermining the foundations of capitalism.
__ALPHA_LVL2__ 3. The Socialist SystemWhen socialism outgrew the bounds of one country and became a world system, it was the greatest historical event after the October 1917 Revolution. The socialist system had its beginnings in the Soviet Republic. Favourable conditions for the overthrow of the capitalists and landowners in several European and Asian countries were created by the defeat of German nazism and Japanese militarism in the Second World War, with the U.S.S.R. playing the decisive role, the weakening of imperialist positions in the world, and the mighty surge of the revolutionary liberation and anti-- imperialist movements. This was a major advance for the world socialist revolution.
Post-1917 history naturally falls into two stages which differ primarily in the balance of power between the opposing socio-economic systems. At one time, there was only one socialist country, with the dictatorship of the proletariat established within the national boundaries of one state. In the early Soviet years, Lenin compared the young Soviet Republic, struggling in a hostile environment to beat off the attacks of foreign interventionist armies and domestic counter-revolutionaries, to a tiny island battered by waves 20 of imperialist predators. ``Materially---economically and militarily---we are extremely weak,'' he said. Yet even at that time he foresaw the important part socialism was to play in determining the future of mankind. Lenin said, ``Morally ---by which, of course, I mean not abstract morals, but the alignment of the real forces of all classes in all countries--- we are the strongest of all. This has been proved in practice; it has been proved not merely by words but by deeds; it has been proved once and, if history takes a certain turn, it will, perhaps, be proved many times again."^^1^^
Since the October Revolution sweeping changes have occurred in the lives and destinies of men, nations and whole continents. In its thousand years feudalism had not been able to generate enough economic power to set in motion a community of nations bound by economic ties. Capitalism, emerging in the 16th century, became a world economic system only in the 19th century. It took the bourgeois revolutions 300 years to put an end to the political power of the feudal elite. It took socialism 30 to 40 years to generate the forces for a new world system.
The formation of the socialist community heralded a new stage in the world proletarian revolution. The capitalist encirclement had been broken. Imperialist supremacy gave way to the growing ascendancy of the world socialist forces. Dictatorship of the working class, embodied in the world socialist community, has become an international force that is beginning to exert a decisive influence on world affairs. The world working class and its chief accomplishment---the world socialist community---today stand at the centre of world events.
When the world capitalist economy emerged, the bourgeoisie took especial pride in fulfilling the ``civilising mission" of capital expansion. Not a word was said about the world dichotomy of the industrially advanced and the agriculturally backward, the metropolitan states and their colonies, the oppressors and the oppressed. But that was capitalism's real ``civilising mission''. The world socialist system has developed by quite different laws and on totally different lines, namely, the sovereignty, voluntary accord and full identity of the vital interests of the working people of all _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 33, p. 151.
21 countries within the community. The social, economic and political community of sovereign nations building socialism and communism has become the motive force of world-wide progress. The world socialist economic system rests on common socialist relations of production, and it has developed on the sound basis of the economic laws of socialism.In terms of world history, the socialist community is young, but it has already accumulated valuable collective experience in socialist construction. It is not one country, but a large group of countries that today bear witness to the general nature of the basic trends and laws that lie behind socialist revolution and construction, whatever the economic levels, and the historical and national specific forms.
The world revolutionary movement can now draw on the experience of the people's democracies---another form of proletarian dictatorship---in addition to that of the Soviet power. It can draw on the knowledge of peaceful and nonpeaceful forms of socialist revolution, the use of parliament and of one- or multi-party systems in reshaping society along socialist lines. It has at its disposal the experience of socialist construction in industrial and agrarian less developed countries, including those that have bypassed the capitalist stage of development, and the experience of agricultural cooperation and drawing the peasants into socialism with regard for national and peasant traditions.
In the course of their development, the socialist countries are constantly encountering fresh problems that are as complex and diverse as life itself. Therefore, the advance to socialism and communism insistently calls for a creative approach to all new issues on the well-tried basis of MarxismLeninism, and exchange of opinion and experience. This makes it possible---at the right time---to sum up and make fuller use of the best experience from each country and the entire socialist community; it enables each nation to pursue the most appropriate policy in building socialism and communism. This collective experience of the socialist states is an invaluable asset of all the revolutionary forces. Verified in practice by a whole group of countries, it is a powerful catalyst of social progress throughout the world.
The U.S.S.R., with socialism established fully and completely, is now proceeding with the full-scale construction of communism. Other socialist countries have converted their 22 pluralistic economies into predominantly socialist ones. The success of their policy of socialist industrialisation has created advanced economies. They have built a developed industry and raised the living standards of their people. Not long ago, some of these countries were backward agrarian states; many have now become and others are about to become industrially advanced socialist states. In most of them, industrial production amounts to almost 75 per cent of their gross social product.
Most have successfully tackled or are tackling the seemingly intractable problem of encouraging peasants to switch from small-scale private farming to large-scale cooperative socialist farming. They are all consolidating their socialist systems, improving social relations, raising living standards, and completing construction of the material and technical basis for socialism, where this has not already been accomplished. They have reached the stage of building a developed socialist society before starting on a gradual transition to communism.
In material production, the decisive sphere of social activity, socialism is rapidly gaining on capitalism, as the following figures indicate:
Table 2 Socialist Countries' Share in World Industrial Output 1017 Under 3 per cent 1937 Under 10 per cent 1950 About 20 per cent 1909 About 39 per cent (the Soviet contribution amounted lo almost 20 per cent) Source: The Economy of the U.S.S.R., 1969, Moscow, 1970, p. 92 (Russ. ed.).In 1969 socialist industrial output was two-thirds of that of the advanced capitalist states. Taken together, the socialist countries accounted for 20 per cent of the world's electric power, compared with 14.9 per cent in 1960. They produced virtually a third of the world's steel and cement, over 50 per cent of its coal, grain and sugar-beet, and 40 per cent of its cotton and milk.
The socialist countries' growing share of world output is a material expression of the progressive historical process in 23 which the sphere of imperialist exploitation and capitalist influence is narrowed down while the world positions of socialism are enlarged. The socialist economy has been growing at a faster pace than the capitalist economy.
From 1966 to 1970, industrial output in the socialist countries increased at an annual average of 7.3 per cent, including the U.S.S.R. 8.5 per cent, as compared with the 5.3 per cent for the developed capitalist countries, including 3.3 per cent for the U.S.A. In that same period, national income in the socialist countries grew at an annual average rate of 7 per cent, including the U.S.S.R. 7.6 per cent, as against 4.8 per cent for the developed capitalist countries, and 3.4 per cent for the U.S.A.
The socialist countries have now set themselves the task of outstripping the capitalist system in the share of world production, and the most advanced capitalist countries in industrial and agricultural output per head and in productivity of social labour. The radical economic reforms now under way in the socialist countries are designed to bring nearer the realisation of this goal. They are intended to make the socialist economy more productive by combining central planning with rational application of such factors as profit and material incentives. If the socialist states are to make correct use of the favourable objective opportunities for continued rapid economic progress, they have primarily to apply the general laws of socialist construction, taking into account the interests of the world socialist system as a whole and the historical and economic specifics of individual countries; they have to make full use of the advantages stemming from the very existence of the world socialist community. Today, full value from the economic laws of socialism can be obtained only by applying them both within an international and national framework.
International socialist co-operation of labour is a force accelerating social production in every socialist country, enabling every member-country to use its resources rationally and to the full, to boost the productive forces, to improve efficiency in production, and to organise enterprises so that they reap the benefit of optimum capacity and up-to-date equipment. This also enables them to overcome various difficulties arising from the fact that the states have entered the socialist community at different times and at different 24 levels of economic development, with unequal advantages of raw materials and fuel and power resources.
Economic co-operation promoting balanced and proportional growth of the socialist economy has gone a long way from short-term, bilateral trade agreements to multilateral economic ties, co-ordination of key targets in current and long-term economic plans, co-ordination of capital investment and research programmes, and elaboration of common technical policies.
The prevailing international situation increases the need to sustain the solidarity and strength of the world socialist community and promote political and economic co-operation between all the socialist countries; it is more important than ever before to strengthen the international solidarity of the working class, to support the peoples fighting colonialism and neo-colonialism, and to work steadily for a stronger alliance with those fighting for national liberation.
Socialist unity has suffered a serious setback from the divisive course being pursued by the incumbent leadership of the Chinese People's Republic. The great-power chauvinism of Mao Tse-tung and his group in their attitude to the socialist countries, their splitting tactics within the world communist movement, have nothing in common with Marxism-Leninism. Their policy merely harms the cause of socialism and of the world working-class and liberation movement as well as the Chinese people's socialist gains and, objectively, provides sustenance for imperialism in continuing its aggressive policies. For the sake of the unity of all revolutionary forces against imperialism, the Chinese people must overcome the pernicious policy of Mao Tse-tung.
As the socialist community has grown in strength, it has exerted ever greater influence on the destinies of mankind and the whole course of world social progress. It is exerting an ever-increasing influence on the level, way and overall direction of the current scientific and technological revolution, and on the development of productive forces throughout the world. The progressiveness of a social system, particularly in the space and atomic age, implies far more than a mere ability to boost production. The main thing is to harness economic development for the welfare of man, instead of using it to manufacture mass destruction weapons. Socialist economic progress is a convincing example 25 of how rapidly mankind could augment its social wealth and welfare, but for capitalism. Socialism alone is able to apply scientific and technological achievements for the common good; socialism alone can exert rational control of the swiftly growing productive forces. When socialism demonstrates its superiority over capitalism in this vital respect, it gives hope to millions of people all over the world, who see that science could greatly improve their lives and bring lasting permanent peace. More and more people look to socialism for salvation.
The world socialist system, the U.S.S.R. first and foremost, with its impressive economic and military potential, is increasing its influence over the issues of war and peace. Both the Soviet Union and other socialist countries have more than once foiled imperialism's aggressive intentions, halted the export of counter-revolution and saved the world from a catastrophic global thermonuclear war.
Another historic contribution of socialism is that it has greatly accelerated the disintegration of imperialism; now that the world socialist system is the dominant factor in world development, it has a large part to play in the breakup of the world capitalist economic structure. Capitalism's international division of labour is in acute crisis. Now that the imperialist policy of rape and plunder of weak states has come up against the socialist policy of selfless assistance and economic co-operation with less advanced countries on the basis of equal rights and mutual advantage, even small nations who were but recently bound to the colonialists with economic and political ties are able to fend off the economic assaults of the imperialist powers.
The world socialist system is increasing its impact on the condition and struggle of the working class and all working people in the capitalist world, whose campaign for social progress and democracy is inspired by socialism's economic advance, its rising standards of living, the farreaching social rights enjoyed by all working people, and the genuine democracy that prevails in all the socialist countries. At the same time, the growing preponderance of the socialist forces over the capitalist, the moral and material support of the people in these countries by the U.S.S.R. and other socialist countries provide the working people of the capitalist world with increasingly favourable 26 conditions in which to campaign for their immediate and ultimate goals, and pave the way for transition to socialism. In this manner, the conditions of the class struggle have been changing within the capitalist countries; socialist ideas have been gaining ground and the workers' class consciousness mounting.
Socialist revolution may win out by peaceful means or through an armed uprising. Today, however, the strength of world socialism makes non-violent revolution in some countries much more likely than before. Internal counter-revolution is finding it increasingly difficult to gain support from outside, from the international imperialist bourgeoisie, and that is why there is no inevitable necessity that the overthrown exploiters will use force, start a destructive civil war and open foreign intervention.
In this situation, a victorious revolution can immediately concentrate on building socialism and carrying through radical social and economic change. Once it has overthrown the capitalist power, the working class can rely on the economic and political might and fraternal support of the existing socialist countries. Not only can it take advantage of past experience in building socialism and communism; it can be assured of economic, scientific and cultural assistance. And this will greatly help to accelerate the transition to the new way of life and enable new socialist states to consolidate their position in the world.
Even the smaller states can defend their vital interests with the help of the U.S.S.R. and the other socialist nations, and repulse attacks from aggressive imperialist powers. Heroic Vietnam is an outstanding example of this in her courageous fight against the American war machine.
Socialist success in the campaign for peace and democracy is leading to a stronger and broader social base and growing political activity of the general democratic movement against monopoly rule in the capitalist countries. Furthermore, with the growing preponderance of socialism, there is a real possibility today that the remaining colonies and semi-colonies will gain true independence from imperialism even before socialism has completely prevailed and while capitalism and imperialism still remain in a part of the world. While victory in the fight for political independence by the peoples who have broken the shackles of colonial bondage is only feasible 27 with the support of the world socialist system, the more so economic independence, which cannot be gained without socialist backing.
Socialist and communist advances in the U.S.S.R. and the socialist community as a whole and the world balance of power between socialism and imperialism have a substantial impact on the working-class struggle in the advanced capitalist countries and on the successful completion of national liberation and anti-imperialist revolutions. Whether the massive peasant campaigns and popular movements will overthrow the tyrannical regimes largely depends on the successes of world socialism. So, too, does the future of the democratic movements against the monopolies and imperialist governments, against national oppression, and for lasting peace. In politics, economics, technology, science and culture, socialism is fast becoming the world centre of attraction and the decisive force in the revolutionary reshaping of human society.
[28] __NUMERIC_LVL1__ Chapter Two __ALPHA_LVL1__ PRINCIPAL TRENDS IN THE ECONOMICEconomic competition between socialism and capitalism is an objective historical process whose content is the drive of the socialist formation for the highest standards in every sphere of economic and social life on the basis of the highest possible productivity of social labour. In this context, the U.S.S.R. has made an important contribution to history by laying a sound economic foundation for promoting world revolutionary progress.
__ALPHA_LVL2__ 1. Russia's Economic Level JustTsarist Russia, despite her swift capitalist development and high concentration in industry, was very far behind the world's leading capitalist countries. Her national income per head (within the U.S.S.R.'s present boundaries) was oneseventh of the U.S. figure, one-fifth of the British, one-third of the French, and just over one-third of the German. Russia's national wealth per head came to no more than 13.5 per cent of the U.S. figure. And in fixed capital accumulation---a crucial sector of the national wealth---Russia was farther behind; her industrial plant and equipment, i.e., her production facilities were worth less than one-twentieth of the U.S. figure.
One cause of this was the lopsided structure of the Russian economy. The major part of the national income came from agriculture, where labour was least productive.
The structure of Russian industry did not match up to the needs of a country that wanted to develop independently. Output of producer goods was low. Domestic production covered only one-sixth of the demand for metal-working lathes, one-quarter for textile plant, one-eighth for steam 29 Table 3 Struclurc of Russian and U. S. National Incomes in 1913 (per cent) Russia U.S.A. Agriculture, forestry and fishing . Industry ..... 54.0 21.8 24.1 34.0 Transport . . . 8.9 14.2 Huilding ........ 7.1 fi.7 Trade ...... 8 2 22.0 Total . . . 100.0 100.0 Sources: S. N. Prokopovich, Estimated National Income of 60 Gubernias of European Russia, 1900--1913, Moscow, 1818, p. 64 (Russ. ed.); Historical Statistics of the United States. 17S9-1945, Washington, 1949, p. 14. engines, and one-tenth for spare parts for industrial machinery. Producer goods made up approximately one-third of industrial production, as compared with two-thirds in the U.S.A.
It is not surprising therefore that Russian gross industrial output was one-eighth of the American, and one-thirteenth in per head terms. Industrial labour productivity in Russia was one-ninth of the U.S. level.
In summing up the general state of Russia's economic life on the eve of the First World War, Lenin wrote: ``In the half century since the liberation of the peasants the consumption of iron in Russia has increased fivefold, but Russia still remains an unbelievably, unprecedentedly backward country, poverty-stricken and half-savage, four times worse-off than Britain, five times worse-off than Germany and ten times worse-off than America in terms of modern means of production."^^1^^
The full extent of the economic lag and its tendencies are apparent from the following figures. In 1900 Russia's per head production of pig iron was one-eighth of the American, one-sixth of the German, and one-third of the French. Yet, thirteen years later the gap had increased to oneeleventh of the American, one-eighth of the German, and _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 19, p. 292.
30 one-fourth of the French. The oil figures tell the same story: in 1900, Russia produced 9 per cent less than the U.S.A., but 81 per cent less in 1913. Table 4 National Income and Industrial Growth in Russia and U.S.A., 1000--13 (per cent) liussia U.S.A. Overall national income growth . 2.8 3.6 net industrial production . . . 3.8 4.0 Per head national income .... 1.2 1.7 net industrial output per head of population . 2.0 2.6 Sources: S. N. Prokopovich's estimate in P. I. Lyashchenko, A Jlistory of the National Economy, Vol. II, Moscow, 1956, pp. 348--49 (Uuss. ed.); Historical Statistics of the United States, 17S9-1945, pp. 14, 26, 231.By the end of the last century railway construction in Russia was well under way, but while it helped to develop industry and expand the home market, its scope was inadequate in relation to the country's territory and population. In length and density of track per 10,000 population, Russia lagged far behind the U.S.A. and Europe's major capitalist countries (see Table 5).
Agriculture was the chief source of livelihood for over four-fifths of the people of Russia, and provided the state with most of its resources. Yet in 1913 net agricultural production stood at about 60 per cent, and per head agricultural production at 40 per cent of the corresponding U.S. indexes.
Russia's industrial workers had a much lower living standard than their American comrades. In 1913, Lenin estimated that industrial wages were 4 times lower than in the U.S.A., and average farm wages 4.6 times lower.^^1^^ The material condition of most Russian peasants was much worse.
The cultural level of Russia's working people, mostly peasants, was one of the lowest in Europe. According to the _-_-_
~^^1^^ Ibid., Vol. 19, p. 36. V. I. Lenin, Collected Works, Fifth Russ. ed., Vol. 23, pp. 168--69.
31 Table 5 Railways in Russia arid Major Capitalist Countries in 1913 (1,000 km) Railway track per 1,000 sq km per 10,000 population U.S.A. . . 402.0 63.4 68.0* 40.8 38.1 51.3 117.8 3.2 76.2 121.7 41.7 9.5 5.1 10.3 8.3 Germany Russia France ...... Great Jiritain * Within the 1939 Soviet boundaries. Source: The World Economy. Collection of Statistical Materials. 1913--1927, Moscow, 1928, pp. 272--74, 670--72 (Russ. ed.). 1897 Census, only 21 per cent of the population could read or write. Four-fifths of all children and adolescents had no schooling at all. On this score Lenin wrote: ``There is no other country so barbarous and in which the masses of the people are robbed to such an extent of education, light and knowledge---no other such country has remained in Europe; Russia is the exception."^^1^^ By comparison with America, Russia had one-fourth the number of people studying per 1,000 population. Lenin went on to say that ``America is not among the advanced countries as far as the number of literates is concerned. There are about 11 per cent illiterates and among the Negroes the figure is as high as 44 per cent. But the American Negroes are more than twice as well-off in respect of public education as the Russian peasantry".^^2^^One of the main reasons for Russia's backwardness was the survivals of feudalism and serfdom in every aspect of economic, political and social life. Draught animals and mainly wooden implements were common to Russian £arms; just prior to the 1914--18 war Russia had 8 million oneblade and 3 million multi-blade wooden ploughs (and 6 million iron ploughs) and 5,700,000 wooden harrows. _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 19, p. 139.
~^^2^^ Ibid., pp. 139--40.
32 Harvesting machinery and steam threshers were the preserve of the big and medium landowners. Though there were less than 30,000 big landowners in 1913, they had as much land (70 million dessiatines^^1^^) as 10 million peasant farmers. This gave a big landowner on average as much land as 330 poor peasant families; the average poor peasant holding amounted to 7 dessiatines, compared with the big landowner's 2,300 dessiatines.The landed estates were therefore the economic basis for preserving what was left of feudalism. The impoverished peasant, indentured in every possible way, continued to toil for the landowner. By 1913, in various parts of Russia, the share of land tilled by peasants on the metayage basis was between 21 and 68 per cent of their own land. Virtually half of all the peasant farms remained essentially sub-marginal, producing practically no marketable produce and therefore unable to purchase goods in exchange. The remnants of serfdom kept the peasants poor and oppressed, reduced purchasing power in the country, and restricted the internal market for industry. The rapid social differentiation given a fresh impetus after the 1905 revolution made things much worse for the great bulk of the peasants. By 1912, more than 31 per cent of all Russian farms were horseless.
The social and cultural backwardness of the Russian countryside stunted initiative, preserved the old routine farming methods and kept farming technically and economically backward. Development was held up by the semifeudal nature of agrarian relations, and rested mainly on obsolete techniques and scattered small-scale commodity subsistence and near-subsistence farms. The three-field system predominated. Only 4 per cent of the arable land was under industrial crops. Consequently, in 1913 Russia had to import about one-half of her requirements of cotton, over 80 per cent in raw silk, and a large part of her wool.
Russia attracted substantial capital investment from abroad. At the turn of the century Russian capital was unable to sustain a sufficiently high rate of capital accumulation or create its own technological base for development and this impelled her ruling circles to encourage foreign investments. On the eve of the First World War, Russia accounted for _-_-_
~^^1^^ 1 dessiatine = 2.7 acres.
__PRINTERS_P_33_COMMENT__ 3---235 33 27.5 per cent of French invested capital, 23.4 per cent of the Belgian and 15.4 per cent of the German with total foreign investment in Russian industry amounting to more than 2,000 million rubles, or almost one-third of all the jointstock invested in Russia. Although native Russian capital dominated the economy, foreign capital was being invested faster: between 1900 and 1913, foreign capital grew by 85.5 per cent and Russian capital by only 59.3 per cent. The former held sway in a number of leading industrial sectors, notably mining, metal-working and machine-building. Onehalf of the capital invested in the coal mines of the Ukrainian Donets Basin was foreign. In iron ore, oil and metallurgy, foreign investment was as high as 80 per cent.The influx of foreign capital certainly played some part in developing the economy and raising the level of technology. But the cost was excessive. Foreign capital was predatory and every year took away from Russia much more in super-profits. In the 14 years just before the war, foreign investment in Russian industry totalled 1,198 million rubles, which produced a net profit for export of 1,767.5 million rubles.
Between 1894 and 1913, total foreign payments, excluding repayments of foreign loans, amounted to over 2,800 million rubles, much more than the book value of basic capital in Russian industry accumulated by 1913 over many decades. Another important way of robbing Russia was the granting of loans to the tsarist government to finance its anti-national home and foreign policy. On the eve of the war, Russia had the world's largest external debt. From 1895 to 1914 it rose by 144 per cent to 5,000 million rubles, with the state revenue at 4,600 million rubles. Between 1900 and 1913, debt repayments by the Russian government came to 2,400 million rubles. Russia's chief creditor was France, which accounted for 80 per cent of the foreign debt.
Russia's economic backwardness also told on the pattern of her exports. Although millions of Russian peasants lived a life of starvation, hundreds of millions of rubles were earned every year on the sale of grains and other farm produce. Official government policy was ``starve, but export''.
Participation in the imperialist world war only added to the country's economic misery. By the end of the war, the national income had fallen by more than a quarter, from 34 16,400 million to 12,200 million rubles. In the first year, military expenditure absorbed 27 per cent of the national income; by the third year of hostilities, it was eating into over 50 per cent of the national income. By the end of the war, the disorganisation of industry, agriculture and transport had reached catastrophic proportions.
According to the 1917 Census, at least one-third, sometimes as many as one-half, the farms in most gubernias had no labourers. The mass requisitioning of horses for the army had removed the basic productive force from agriculture: in 50 gubernias of European Russia, the number of draught horses had declined from 17,900,000 in 1914 to 12,800,000 by 1917, i.e., almost 30 per cent. This situation had a damaging effect on the principal agricultural crops. As a result, the country was faced with a terrible food crisis and famine. Spreading unemployment added to the plight of the workers in town and country.
Lenin summed up the situation in the following words:
``The war has created such an immense crisis, has so strained the material and moral forces of the people, has dealt such blows at the entire modern social organisation that humanity must now choose between perishing or entrusting its fate to the most revolutionary class for the swiftest and most radical transition to a superior mode of production.... The war is inexorable; it puts the alternative with ruthless severity: either perish or overtake and outstrip the advanced countries economically as well... . That is the alternative put by history."^^1^^
The Russian proletariat, and later the Soviet people, took up the challenge of history and resolutely tackled the most difficult economic problems that were crucial to the fortunes not only of Russia but of all mankind.
__ALPHA_LVL2__ 2. Start of Economic CompetitionThe drive to transform the socio-economic structure of Russia began immediately after the uprising on November 7, 1917. The Soviet Government was officially installed on _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 25, pp. 363--64.
35 November 8 and issued its decrees on peace and land, following this up with a Law on Workers' Control ( November 27, 1917), decrees establishing the All-Russia Economic Council (December 15, 1917), and nationalising banks (December 27, 1917) and large-scale industry and trade (June 30, 1918). All loans contracted by the tsarist government were cancelled (January 20, 1918), a special decree on socialisation of land was passed (February 19, 1918), foreign trade was nationalised (April 22, 1918), and a state grain monopoly was instituted (May 14, 1918). All these measures were designed to concentrate political and economic power in the hands of the proletarian state and cut short the economic crisis which the imperialist war and tsarist criminal folly had brought on the country.Resistance from the capitalists and landowners, the civil war imposed on the people and the foreign intervention disrupted the operations to put the economy back on its feet; in fact they precipitated a fresh demolition of the productive forces. Between 1914 and 1920, the country lost some 19 million able-bodied men (aged 16 to 49) from death or injury in battle, starvation and epidemics.
The main sectors of the economy suffered a grave setback. Industrial production fell by 1920 to 13.8 per cent of the 1913 level (see Table 6). Of the 4,877 state-run industrial enterprises, only 2,984 factories were said to be operative, and these too were badly crippled. There were no raw materials, no skilled workers, no machinery. Between 1917 and 1920 arable land under grains dwindled by 21 per cent; the grain crop fell by 39 per cent and by 60 per cent in comparison with 1913. During the civil war, the number of farms able to produce for the market dropped to a critical level. The horse and the one-blade wooden plough (sokha) emerged from the world and civil wars as the basic instruments of farm production. The economic significance of these `` unsophisticated machines" even increased during the economic chaos that followed on the heels of the civil war. And to add to the privation, crop failure and famine hit the country in 1921.
By the time the young Soviet Republic had expelled its internal and external enemies and finally set to putting the country in order, the United States of America appeared to stand on an unattainable pinnacle of technological and 36 Table 6 Gross Industrial Output (1913=100) 1917 1920 Mining . . . 09.8 19.1 Metal-working and machine-building . . Chemicals 110.6 94.0 7.5 11.1 Food 32.4 15.9 Leather and footwear 120.7 28.0 Textiles ........ ... 60.2 10.1 Woodworking . . 42.9 16.9 Paper and printing 95.6 15.0 Power and water-supply 1 Other industries \ 68.5 14.2 Total ................ 05.9 13.8 Estimated from The World Economy. Collection of Statistical Materials, 1913--1927, p. K. economic achievement. It had already become the most potent capitalist power in the world, with its advanced industry and highly developed farming. Seen against this industrial background, Soviet Russia's industrial level was very low indeed (see Table 7).
The Russia of 1921 lagged a whole century behind the U.S.A. in the production of virtually all material goods, but Soviet Russia had one important advantage in the coming drive for rapid and extensive technological and economic progress. This was her new, advanced social system and the Party that was at the head of all the Soviet peoples and was equipped with a clear-cut programme for building socialism.
The five subsequent years were to demonstrate that Soviet Russia possessed immense potential for economic progress. Roughly by 1926, the rehabilitation period was over, and the economy began to pick up. Between 1913 and 1928 fixed capital grew by 18 per cent, gross industrial output by 32 per cent, and large-scale industrial output by 52 per cent. The national income had increased by 19 per cent. Even at that early period priority was being given to the manufacture of producer goods, the result of a vigorous 37 Table LI. S. Industrial Superiority, 1920--21 Total industrial output...... Steel ............ Pig iron .......... Coal............. Oil............. Iron ore ........... Engineering and metal-working Chemicals.......... Food ............ Textiles........... Footwear........... Woodworking........ Paper and printing...... Building materials...... 59 times greater 203 322 77 82 419 132 321 29 35 29 78 167 63 Estimated from The World Economy. Collection of Statistical Materials, 1S13--1921, pp. 3, 7, 9. 11, 23, 31--33, 46--47. Figures ot physical output are for 1920, the rest, for 1921. drive to industrialise the country. While steel smelting still stood at the 1913 level, production of producer goods had gone up 55 per cent in 1928 over the 1913 level, machinebuilding and metal-working output was up by 75 per cent and generation of electricity by as much as 157 per cent. The country was forcing the pace in creating the essential levers of economic reconstruction and a technical base for unfettered, independent socialist economic progress.
__ALPHA_LVL2__ 3. Lenin's Plan for BuildingLenin firmly believed in the rapid industrialisation of the U.S.S.R. as first priority if socialism were to be built. His plan for building socialism provided for establishing a powerful heavy industry and envisaged two further measures that were to be of historic importance: the organisation of the millions of peasants in co-operatives within collective farms, and a far-reaching cultural revolution. In one of his last works, Lenin was to write: ``Indeed, since political power 38 is in the hands of the working class, since this political power owns all the means of production, the only task, indeed, that remains for us is to organise the population in co-- operative societies. With most of the population organised in cooperatives, the socialism which in the past was legitimately treated with ridicule, scorn and contempt by those who were rightly convinced that it was necessary to wage the class struggle, the struggle for political power, etc., will achieve its aim automatically.'' He further made it clear: ``Strictly speaking, there is `only' one thing we have left to do and that is to make our people so `enlightened' that they understand all the advantages of everybody participating in the work of the co-operatives, and organise this participation. `Only' that. There are now no other devices needed to advance to socialism. But to achieve this `only', there must be a veritable revolution---the entire people must go through a period of cultural development."^^1^^
Socialist economic planning based on social property in the means of production stands to the greatest credit and advantage of the socialist system, and helped to fulfil Lenin's plan for transforming Russia in the shortest possible time. The proletarian government was able directly to control the economy and concentrate on the primary targets.
In the early part of 1918, when the threat of foreign military intervention hung over the country and civil war had become a bitter reality, Lenin writes a Draft Plan of Scientific and Technical Work proposing that the Supreme Economic Council empower the Academy of Sciences to set up a number of specialist bodies urgently to draw up a plan to reorganise industry and boost the economy. He emphasised that socialist organisation of social production should be based on electrification and the correct deployment of industry.
The GOELRO Plan for Russia's electrification was approved by the Eighth Congress of Soviets in 1920 and became a historic landmark in socialist economic planning. It was in fact the initial plan for industrialising Russia. In addition to the building of 30 large power stations with a total capacity of 1,500,000 kilowatts (before the revolution the _-_-_
~^^1^^ V. I. Lenin, Collected Works, Vol. 33, pp. 467, 4C9-70.
39 capacity of all of Russia's power stations amounted only to 1,100,000 kilowatts), the plan envisaged a big increase in the extraction of oil, coal, and peat, the smelting of pig iron, steel, and ferrous metals, and the production of cement, paper, machinery, textiles and mineral fertilisers. In fact, the keystone of the plan was to establish a heavy industry and to revive and restructure transport. The GOELRO Plan saw the light of day when the country lay in ruins and it is not surprising that it appeared to be an extremely audacious and imaginative programme for carrying Russia from the dark ages into socialism.In the wake of the 10--15-year electrification plan, followed the First and Second Five-Year plans. Under those plans, designed to establish the material and technical basis for socialism and abolish what was left of the exploiting classes, socialist industry was developing at unprecedented rates. In the space of two five-year plan periods (1928--32 and 1933--37), the economy was completely restructured on a new technologically advanced foundation. More than 6,000 large industrial enterprises were started, including such world-renowned projects as the Magnitogorsk and Kuznetsk metallurgical combines, the Volgograd, Kharkov and Chelyabinsk tractor works, the Gorky Motor Works, the Rostov Farm Machinery Factory, the Urals and Kramatorsk heavy engineering works, the Dnieper Hydro-Electric Station and the Dnieper Aluminium Combine, and the Berezniki and Voskresensk chemical combines. In the Urals, Siberia, the Far East and the Arctic North, new industrial centres, cities and ports sprang up. The country escaped from technical and economic dependence on the most advanced Western countries.
The widespread socialist industrialisation gave the country a powerful material and technical basis for collective farming. Hundreds of thousands of tractors, combine harvesters and other farm machinery now poured into the countryside and made it possible greatly to extend the area under crops and to grow more wheat.
This meant improved living standards for the Soviet people. Urban unemployment and rural overpopulation became evils of the past. Between 1913 and 1940 the population increased by 22 per cent while the number of gainfully employed increased by 170 per cent, workers' real wages by 40 85 per cent and real agricultural incomes doubled. For the first time in history, a government had afforded its people education at all levels and a health service both free of charge. The number of general school pupils increased 4.6 times, special secondary school pupils 27 times, and students 7.2 times, doctors 7 times, hospital beds 4.5 times, etc.
Practically all school-age children attended primary or incomplete secondary schools, and adult illiteracy was being wiped out. Between 1918 and 1940, some 1,800,000 young men and women graduated from special secondary schools and 1,200,000 from higher schools. From 1914 to 1941 the number of research institutes increased 6.3 times and research workers 9.8 times.
But living standards could not be markedly improved because the Soviet government had to give priority in use of economic resources to heavy industry, transport and agricultural reconstruction. Sizable resources had to be allocated for defence so long as the capitalist encirclement remained. And the slow rate of growth in agriculture, while the collective farms were being established and a bitter class struggle raged in the countryside, further hindered production of consumer goods.
The fulfilment of the First and Second Five-Year plans resulted in the construction of socialism, the main historical task of the period. All exploiting classes and all causes dividing society into exploiters and exploited were rooted out. The socialist economic system became the foundation of all social progress, so that by 1937--39 the socialist economic sector accounted for 99 per cent of the country's fixed capital and 99.8 per cent of industrial output. By occupation, 97.4 per cent of the population were industrial and office workers and collective farmers; 2.6 per cent were individual farmers and artisans.
The Soviet economic system, based as it is on social property, opened up fresh reserves of productive power---the creative energies and initiatives of millions of working people, which took the form of socialist emulation. They produced at well above the old technical rates, brought out and cleared bottlenecks in industry, thereby making for the fastest growth of production with the available supplies of raw materials and machinery.
Soviet economic plans were increasingly based on the 41 experience of the front-rankers in production and scientific and technological achievements. Research establishments, on the one hand, and shopfloor workers on the other, both played their part in bringing out the immense reserves and potentials latent in a socialist economy. As a result, there was massive participation in the business of planning economic development.
By consolidating the new relations of production, it took the Soviet people 15--20 years to build almost all of the material and technical basis meeting world scientific and technological standards. The boosting of the productive forces during the initial five-year plans---at a much faster rate than in the U.S.A.---brought a qualitative change to the economic competition between the U.S.S.R. and the U.S.A. by enabling the former to reduce the gap separating it from the world's leading capitalist producer.
By 1937, the Soviet Union was already turning out as much as one-third of U.S. industrial production, a 3-fold improvement over 1913, and a 20-fold improvement over 1920. The U.S.S.R. had moved into second place in the world's industrial league. In 1940, it was on the whole poised to enter the decisive stage of economic competition with the major capitalist countries, primarily the U.S.A.
__ALPHA_LVL2__ 4. The Great Patriotic War andNazi Germany's treacherous attack put an end to the period of the peaceful economic progress in the Soviet Union, which was plunged into the most destructive and tragic war the world had ever known. The Second World War far outdid World War I in scale of operations, in human participation and in the resources involved. And for the four final years, the Soviet-German front was the war's chief theatre of operations.
The scale of the Soviet war economy far exceeded that of tsarist Russia in the first war (see Table 8). In the 1941--45 period, by comparison with 1914--17, the Soviet Union manufactured 29 times more artillery pieces, 89 times more mortars, 78 times more machine-guns, 6.9 and 6.4 times more cartridges and rifles, respectively. Growth in the Soviet wareconomy potential to the extent of its ability to withstand 42 and repulse the nazi onslaught was a vital consequence of the pre-war industrialisation policy.
When Germany attacked and in the early stages of the war, the Soviet economy compared unfavourably both in volume of military production and in preparedness with that of Germany, which had been reinforced by resources from the occupied territories. Soviet industry had been geared to peaceful development and was not switched in time to mass production of the latest military hardware. Inevitably, the Soviet Union was to suffer for this in the initial period of hostilities. By early 1943, however, Germany had lost her superiority in both the quality and quantity of combat equipment. The Soviet army was now receiving sufficient quantities of modern tanks, planes, anti-tank and antiaircraft artillery, automatic weapons, etc. The Communist Party and the Soviet Government, relying on the potential created by the Soviet system and the socialist economy, mobilised the country's resources for victory. In a short time, the country's economy was completely reoriented to a total war effort.
Table 8 Production of Military Hardware* U.S.S.R. Tsarist Russia Tanks, armoured and selfpropelled vehicles .... 30,000 insignificant Planes . . . 40,000 Artillery pieces ...... 120,000 3,900 Machine-guns 450,000 5,800 Shells, bombs and mines . . 240,000,000 16,300,000 * Average annual production for the three final years of the First and Second World wars. Sources: Y. Y. Chadayev, The Economy of the U.S.S.R., 1941--1945, Moscow, 1965. p. 211 (Russ. ed.); G. I. Shigalin, The National Economy oi the U.S.S.R.During the Great Patriotic War, Moscow, 1960, p. 115 (Russ. ed.).Despite its much smaller industrial base, in comparison with Germany or the U.S.A., the Soviet Union turned out, on annual average, more tanks, self-propelled vehicles, artillery pieces and mortars than either of these nations; in 43 planes, it was second only to the U.S.A. This was a triumph for the Soviet war economy and the Soviet socialist system. The American writer, Max Werner, had this to say:
``All available Russian resources were more strongly concentrated on the war effort, and utilised to a greater degree than the German. Germany had more steel, but in Russia more steel out of every thousand tons was used for arms production than in Germany. Germany had more machinery, but in the Soviet Union a large proportion of all available lathes turned out war materiel. That is why the dramatic struggle of Magnitogorsk against the industries of the Hitlerdominated European continent was possible."^^1^^
To put the Soviet war achievement in true perspective, one must understand the terrible price that Soviet people paid for victory. On the way to V-Day---and without the successful Soviet war effort the Allied victory would have been inconceivable---the Soviet Union suffered shattering losses: as many as 20 million Soviet people lost their lives; the material loss in state and civilian property amounted to the staggering figure of 679,000 million rubles (in 1941 prices). Some 32,000 industrial plants that had previously employed 4 million workers were completely destroyed. The war destroyed 60 per cent of the capacity of steel foundries and of coal production, 65,000 kilometres of railways; 1,710 cities and over 70,000 villages were razed to the ground; 98,000 collective farms, 1,876 state farms and 2,890 machineand-tractor stations were plundered; many millions of head of cattle, pigs and horses were either slaughtered or sent to Germany. Apart from the direct losses suffered---the destruction of approximately one-third of the national wealth--- the Soviet nation bore considerable losses from the lower national income that resulted from the cancellation and reduction of work at many industrial and agricultural enterprises and the overall slowdown of economic growth.
The production of steel, oil, cement and all the basic consumer goods had to be drastically curtailed. By 1945, for example, steel output was down to two-thirds of the 1940 figure, oil production to 62 per cent, cement to about one-third, and the production of consumer goods was more than halved. The standard of living fell victim to the great _-_-_
~^^1^^ Max Werner, Attack Can Win in '43, Boston, 1943, pp. 24--25.
44 war effort: putting the economy on a war footing, spending huge sums on defence and the vast ruin in the occupied territories. Housing and the municipal economy were hardest hit and took longest to recover. As a result, some 25 million people were rendered homeless. Consequently, the war not only deprived the Soviet Union of normal economic development but destroyed much of what had been created before the war at such self-sacrificing effort.Unlike the Soviet Union, the United States substantially gained economically from the Second World War, as it had from the First World War. Its material losses were slight and it benefited from the booming war market that strongly stimulated U.S. industry. Nothing is more indicative of the war-time U.S. industrial upsurge than its increased electric power output. Between 1939 and 1945, U.S. electric stations increased their generation of electric power by 1.7 times.
The U.S. iron and steel industry found the war a considerable boon: capital investment in the ferrous metal industry for 1940--45 amounted to $2,500 million (half of it in government funds). In 1939, only 138 of the 236 blast furnaces were in commission; by 1945, all were working to full capacity. During this period, pig-iron output increased from 51 million to 61 million tons. Production capacities for smelting alloyed steels increased 3.5-4-fold, and those for aluminium 7-fold. The machine-tool industry, whose total output was valued at only $200 million in 1939, improved to $1,321 million by 1942. In chemicals, output of a whole range of important products also grew severalfold during the war.
While the U.S.S.R. was bearing the brunt of the nazi offensive and suffering huge losses, the U.S.A. was making a good profit from the war, setting itself up as a near-- monopoly supplier of many vital commodities. All the same, the unproductive nature of arms manufacture had an inhibiting effect on some branches of U.S. economic life. So, for the five years from 1940 to 1945 national reproduction of wealth (in fixed prices) virtually marked time, while the value of buildings and other facilities, especially in urban areas, fell by 4.2 per cent. Similarly, spending on the health service---a vital sector for servicing the reproduction of labour resources ---also fell. The proportion of health expenditure in the national product diminished by 8 per cent at the same time 45 as the cost of medical services climbed by 15 per cent. Furthermore, U.S. industrial growth, being geared to military requirements, was of a temporary nature; this inevitably engendered economic difficulties when it came to switching the economy on a peace-time footing.
Even before the war's end, the Soviet Government had begun to implement a plan for economic rehabilitation, whose most important feature distinguishing it from the process in Western Europe was that it was based on domestic resources, despite the extremely heavy war damage. Concurrently with its own rebuilding, the Soviet Union was rendering considerable economic -assistance to the other European states that were now building socialism.
Because financial and other material resources for capital construction were naturally limited in the immediate postwar years, basic resources went to the key economic sectors--- heavy industry and the railways---which had priority in equipment, raw materials, fuel components and labour. In the early post-war years, it was impossible to tackle some problems in agriculture, housing and the consumer goods industry. The pre-war consumption level was reached by the early 1950s.
The implementation of the plan for economic rehabilitation and further development ensured a mighty upsurge in Soviet material production, whereas in the U.S.A. the shrinking of the war-time markets caused the usual difficulties and growth rates at once dropped (see Table 9).
Table 9 Economic Growth Rates: U.S.S.R. and U.S.A. U.S.S.R. U.S.A. National income Average annual growth 1941--45 ...... __ 32 9.8 1946--50 14.6 insignificant Industrial production Average annual growth 1941--45 ...... ---1.7 9.9 1946--50 ...... 13.6 1.2 Source; The Economy of the U.S.S.R., 1959, Moscow. 1960, pp. 77, 141 (Russ. ed.). 46In the immediate post-war five-year plan period, the Soviet economy began to recover at a high rate of growth, whereas in the U.S.A. the buoyant economy of wartime gave way to the slow economic development of peace-time. Employment declined and the number of jobless rose from its war-time low of 670,000 to 1,040,000 in 1945, 2,270,000 in 1946 and 3,142,000 in 1950. By 1950, U.S. war-time production figures had still to be attained: the industrial index stood at 133 in 1943, 130 in 1944, and only 113 in 1950 (1947--49= 100).
Meanwhile, the Soviet Union had completed its economic rehabilitation and was moving ahead. Many thousands of large and medium-size industrial plants were restored and built anew from 1946 to 1950. The country had already surpassed its pre-war industrial output level in 1948, i.e., long before the West European countries did so, despite the latter's receipt of large U.S. subsidies. By 1950, Soviet industry was turning out considerably more than it had done before the war. In fact, but for the war, the Soviet Union would have been much closer to U.S. production levels in the main industrial products by 1955 (see Table 10).
Table 10 Industrial production: U.S.S.R. and U.S.A. Unit Soviet output U.S. 1955 output 1940 1955 Probable 1955 output but for the war Coal * mln. tons 166 31 18 6 48 391 71 45 22 170 5GO 125 75 40 250 421 330 106 51 629 Oil Steel ...... '' Cement '' '' Electricity ** 1,000 mln. kwh* Physical.
** Total generated.
Calculated from: The Economy of the U.S.S.R., 1956, Moscow, 1957, pp. GO-63 (Russ. ed.); The Economy of the U.S.S.R.. 1959, Moscow, 1960, pp. 156--58 (Russ. ed.); The Economy of the Capitalist Countries After the Second World War, Moscow, 1959, pp. 928--31 (Russ. ed.); estimation of probable industrial output from The Soviet Socialist Economy, 1911--1957, Moscow, 1957, p. 212 (Russ. ed.). 47The U.S S.R. maintained its rapid economic progress and by 1958 national income was 3.8 times the 1940 figure, and 2.3 times the 1950 figure. Between 1951 and 1958, national income grew at an average of 13.5 per cent a year. In 1958, gross industrial output was 4.3 times the 1940 figure, and 2.5 times the 1950 figure. The industrial gap between the U.S.S.R. and the U.S.A. had considerably narrowed, largely due to the much faster growth in the major Soviet industrial sectors (see Tables 11 and 12).
Table 11 Industrial Production: U.S.S.R. and U.S.A. Unit Actual output in 1958 Soviet output as percentage of U.S. output U.S.S.R. U.S.A. 1950 1958 Coal * ....... mln. tons 425 382 44 111 Oil . . » » 113 331 14 34 Steel „ „ 55 77 31 71 Cement ...... „ 33 52 26 60 Sulphuric acid . . . „ 4.8 15 18 32 Electricity ** . . . 1,000 mln. kwh 219 724 22 32 Cotton fabrics . . . 1,000 mln. sq m 4.7 8.8 33 54 * In terms of hard coal. ** Mains feed. Sources; The Soviet Achievement of iO Years in Figures, Moscow, 1957i pp. fil-62 (Russ. ed.); The Economy of tlie U.S.S.R., 19S8, Moscow, 1959, p. 120 (Russ. ed.); The Economy nl the U.S.S.R., 19S9, Moscow, 1960, pp. 156--59 (Russ. ed.); The Economy of the Capitalist Countries Alter the Second World War, pp. 928-2'J.Soviet industry was growing much faster despite a much less favourable sectoral structure. U.S. industry had largescale iron and steel facilities that were not being used to the full. The Soviet Union had rapidly to build up its iron and steel industry, which is highly capital-intensive and has a lengthy gestation period. While the U.S.A. made scarcely any progress in its fuel industry, particularly in coal mining, the Soviet Union more than doubled output in this very capital-intensive industry between 1951 and 1958. The U.S.A. had no need to accelerate production in engineering, while the U.S.S.R. trebled production in that period. During these 48 Table 12 Industrial Output: U.S.S.R. and U.S.A. (1958 as a percentage of 1950) U.S.S.R. U.S.A. All industry .......... 249 125 Electricity . ... 258 186 Fuel 210 118 Ferrous and non-ferrous metals . . Chemicals ........... 230 320 88 163 Engineering and metal-working . . Textiles ............ 323 208 135 99 Food .............. 204 119 Source: The Economy of the U.S.S.R., 106i, p. 94. years, the U.S.A. concentrated on building up its chemical and power industries. The Soviet Union, besides promoting these highly effective industries, also poured men, money and materials into other sectors of the economy which took time to develop. Consequently, the higher industrial growth rate in the Soviet Union was attained on a less favourable material base and in the face of more substantial difficulties.
After the war, the world socialist system grew in area and strength and this undoubtedly helped the Soviet Union to overcome some of its economic difficulties. Division of labour between socialist nations, economic co-operation and the sharing of scientific and technical expertise all played their part. In 1958, trade with its socialist partners amounted to 74 per cent of total Soviet foreign trade. It supplied them with the equipment and raw materials they needed and imported diverse machinery and tools from the industrially advanced socialist countries. It was able to take advantage of their accumulated technical experience, so that, together, the socialist nations were able to solve their technical problems by pooling resources.
Nor was agriculture neglected. By 1949, having healed the severe wounds of war, Soviet farmers were almost back at their 1940 level. In the years that followed they received __PRINTERS_P_49_COMMENT__ 1---235 49 much modern machinery which, together with the largescale reclamation of virgin and waste lands, enabled them to raise their total output to a level approaching that in the U.S.A.
The Soviet Union was now catching up with the U.S.A. through its superior rate of growth, capital accumulation and labour productivity. And with the fulfilment of the Seven-Year Plan (1959--65), the social product and national income balance between the two countries tilted in favour of the Soviet Union in several key sectors. In 1957, the Soviet gross social product and national income were 50 per cent of the U.S. figures; in 1967, they had risen to 63 per cent. Per head, the Soviet social product and national income had risen from 42 per cent to 52 per cent of the U.S. levels. In 1967, Soviet industrial output was more than two-thirds of the American total.
In 1957 the Soviet Union had already caught up with and even outstripped the U.S.A. in several key industrial lines, as the table below indicates.
Table 13 Industrial Production: U.S.S.R. and U.S.A. J967 c utput Soviet out-- Unit U.S.S.R. U.S.A. put as percentage of U.S. output in 1967 Goal * .... Oil mln. tons 595 288 511 435 116 66 Steel . . . . ,. 102.2 118 90 Cement .... ,. >. 84.8 67 127 Sulphuric acid Mineral `` '' 9.7 27 36 fertilisers „ 40.1 62.4 64 Electricity** Cotton fabrics 1,000 mln.kwh 1,000 mln. 589 6.4 1,384 8.4 43 77 Leather footwear sq m mln. pairs 561 615 91 * Output. ** Gross output. Source: The U.S.S.R. in Figures. 1967, Moscow, 1908, pp. (Russ. ed.). 50In the economic competition with capitalism, the Soviet people have brought a new approach to a whole range of practical problems that have vital importance for all countries embarking on the path of accelerated economic development and progressive social transformation of society.
At every stage of development, fast economic growth was ensured by expanding the sources of national-economic accumulation. This was made possible because first, all exploiting classes had been swept away, and with them had gone the colossal non-productive expenditure on their upkeep and the appropriation and repatriation by foreign capitalists of the national wealth; second, employment in material production was growing rapidly; and third, productivity of social labour was growing fast through the introduction of up-to-date hardware.
The first and second factors were foremost in promoting capital accumulation during the initial stages of Soviet growth. But once the economy could rely on the sound material and technical basis of socialism, with its accompanying advanced industry, power and transport, it was labour productivity that became the key factor. Since the last war, rapidly increasing productivity has made it possible to augment capital accumulation while raising the standard of living.
For many years, the U.S.S.R. has kept well ahead of the U.S.A. in labour productivity growth rate (see Table 14). From 1940 to 1950, it increased 2.1 times faster than in the U.S.A., from 1950 to 1960, 3 times, and from 1955 to 1965, almost 2.2 times. The relative reduction in recent years in the gap between rates of productivity growth in the two countries is due to the fact that different factors bear on productivity at different economic growth periods. In particular, higher labour productivity during the period of socialist industrialisation stemmed from the large-scale changeover from antiquated forms of small-commodity production to large-scale socialist industrial production. Another reason is that industrialisation was accompanied by a radical change in the structure of the economy: employment in lowproductivity sectors---agriculture and the handicrafts--- declined in favour of employment in industry, transport, etc., where labour productivity was comparatively high.
The 1928--40 period was particularly noteworthy for the __PRINTERS_P_51_COMMENT__ 4* 51 changing employment structure, as a result of which the social product grew by 35 per cent; similarly it produced a near-35 per cent increase in overall production during the subsequent eighteen years (1940--58). Changes in the employment structure today exert a certain influence on the growth of productivity, although the most impressive shifts have already occurred and their future significance will gradually diminish. During the 1960s, labour productivity was mostly influenced by the changing occupational structure induced by mechanisation and automation, by the sharp decline in unskilled and auxiliary types of work, and by the introduction of new techniques and technology.
Table 14 Average Annual Growth in Labour Productivity: U.S.S.R. and U.S.A. * (per cent) U.S.S.R. U.S.A. 1941--50 6.2 3 1951--60 7.8 2.6 1956--65 5.6 2.6 * National income per worker in material production Sources/ TheU.S.S.R. in Figures, 1965, p. 36; The Economy of the U.S.S.R., 1958, Moscow, 1959 (Russ. ed.). and for subsequent years; Handbook of Basic Economic Statistics, July 1965, pp. 12, 16 and 17.The U.S.S.R. has had a considerable advantage over the U.S.A., its chief rival, in increasing its productive capacity. In the U.S.A. higher labour productivity has precipitated multifarious problems due to the restricted possibility of extending production and consumption; a relative surplus of productive capital has accumulated, thereby reducing the stimulus for capital accumulation. By contrast, there is practically no limit to increasing production and consumption in the U.S.S.R.; as a result capital accumulation has grown and has guaranteed additional sources for higher labour productivity and accelerated growth rates.
Thus, growth in capital investment in the Soviet economy has accelerated capital accumulation and implied faster 52 growth rates, while the limited growth of capital investment in the U.S. economy has kept the rate of economic development comparatively low. This inter-relationship is evident from the following table.
Table 15 Average Annual Rate of Growth of National Income and Capital Investment in the Soviet and U.S. Economies (per cent) U.S.S.R. U.S.A. Gross capital investment National income Gross capital investment National income 1941--50 7.4 7.0 5.5 5.5 1951--55 11.3 11.3 3.7 3.9 1956--60 1961--65 14.2 6.2 9.1 6.3 insignif. 6.0 2.3 4.6 Sources: The Economy of the U.S.S.R., 19BS, pp. 617--19; The U.S.S.R. in Figures, 1965, p. 36; L. I. Nesterov, Capital Investment of the U.S.S.R. and the U.S.A., Moscow, 1965, p. 181 (Russ. ed.); Statistical Abstract of the United States, 1966, p. 322.In the Soviet Union, the average rate of growth of capital investment in production and the national income growth rate for 1928--65 were considerably higher than those in the United States. This is convincing evidence of the dynamic process of capital accumulation in the U.S.S.R. for the purpose of boosting the country's productive forces. There is the closest relationship between the capital accumulation growth rate and increased national income. The superiority in capital investment growth rate has ensured the Soviet Union a relatively higher national income growth rate than that of the United States.
Since the last war, the investment pattern has changed markedly in the direction of a greater proportion of more active elements of fixed production assets. Thus, between 1940 and 1965 the share of expenditure on machinery and plant in the capital investment of state and co-operative organisations increased from 15 to 34 per cent.
On the whole, growth in fixed assets in the Soviet economy has been occurring about four times faster than in the United 53 States; growth in the fixed assets of Soviet industry is 10--15 times faster than the corresponding U.S. growth rate. In the long term, Soviet superiority in the rate of capital accumulation has a decisive effect on the potential economic opportunities for growth, while the U.S. social system restricts the opportunities for increasing the rate of capital accumulation. Furthermore, the level of capital accumulation also depends on the extent to which production is effective. The more effective it is, the less capital investment it requires, other conditions being equal, per unit of growth of national income. At the present juncture of the economic competition, increased effectiveness of production is becoming as important as quantitative growth.
__ALPHA_LVL2__ 5. The Present StageThe current stage of the peaceful economic competition with capitalism contains a number of qualitatively new characteristics. The U.S.S.R. now has a viable material and technical basis that has completely transformed a once backward country into a leading industrial nation. In volume of industrial output, it now stands second only to the U.S.A.; in technical and economic level of production it is now in the front rank.
Industries like machine-building, chemicals, power, metallurgy, oil and gas, being in the van of technical progress, have played a leading part in economic development and in stimulating higher labour productivity throughout the Soviet economy. Machine-building factories are today turning out a wide variety of modern technological equipment up to world-class standards. Ferrous and non-ferrous metal industries have impressive achievements to their credit. The proportion of the most progressive types of fuel---gas and oil--- in the national fuel balance now comprises more than onehalf. That of producer goods in gross industrial production amounts to three-quarters. The U.S.S.R. occupies a leading world position in space research, nuclear physics, mathematics, electronics, radio engineering, missiles, aircraft construction and many other spheres of science and industry.
54In agriculture, too, the Soviet Union has made substantial progress. The level of Soviet farm output in 1966--67 was 85 per cent of the U.S. level, and 70 per cent per head. In place of the millions of small plots and farms, Soviet farming now has some 50,000 large socialist farms in the form of collective (kolkhoz) and state (sovkhoz) farms.
Modes of cultivation have radically altered: more than 1,821,000 tractors, over 580,000 harvester combines and over 4,100,000 other farming machines work land that used to be almost totally cultivated by heavy manual labour before the Revolution. In addition, in 1968 alone, agriculture received 36,300,000 metric tons of chemical fertilisers. Complete mechanisation has taken much of the hard toil out of farming. Ploughing before the revolution largely involved horse-drawn wooden ploughs---it is now completely mechanised; the harvesting of grain used to be done mainly by hand---now 100 per cent of the operations are mechanised; 98 per cent of winnowing, 84 per cent of haymaking, 88 per cent of potato planting and 70 per cent of potato lifting, etc., are now mechanised. These essential changes in the system of cultivation, the application of chemicals and machinery to farming have greatly improved agricultural production and the incomes, education and culture of Soviet farmers.
All these economic advances are most noticeable in Soviet living standards, as the table amply testifies (see Table 16).
In socialist society, popular consumption has been growing as national wealth increases, not merely on account of personal income, but, more importantly, on account of the social consumption funds, state provision of free medical services, pre-school and school education and other social benefits. Free health services and education that are universally accessible are among the greatest attainments of the Soviet system. So, too, is the unique guaranteed security of employment.
For all the Soviet success in the economic competition with the U.S.A., it would be wrong to suppose that the fight for world economic supremacy has become easier. This is explained, on the one hand, by the fact that the scale of Soviet production and accumulation, the fixed assets in industry and capital investment, have all greatly increased, and the economic links have become more extensive and 55 Growth of Soviet Living Standards Table 16 Per-unit increase of 1968 over pre-1917 Indexes Heal industrial incomes........ Heal farm incomes........... Workers and other employees..... School pupils (7-17 years) ...... Special secondary school pupils (15--18 years) ............... Students............... Graduates of higher and special secondary education.............. Newspaper circulation......... Children in day nurseries....... Hospital beds............. Doctors (excluding dentists)...... Average life expectancy........ 7.1* 11.0* 7.4 5.1 78.0 35.2 72.4 37.6 ,429 12 23.4 2.2 * Wages after lax, with addition of pensions, allowances, free education, medical service and other benefits from the state, and with account of elimination of unemployment and reduced working hours. ** Earnings in money and kind from public and subsidiary farming after tax, with addition of free education and medical service, pensions and other state benefits. Sources: The U.S.S.R. in Figures, 1966, Moscow, 1967, pp. 140--49, 153, 165--66, 178--79 (Russ. ed.); The Economy of the U.S.S.R., 1960, Moscow, 1961, p.808 (Russ. ed.); The Economy of the U.S.S.R., 1968, Moscow, 1969, pp. 80, 91, 572, 675, 723, 730, 738 (Russ. ed.). more complex, and on the other by a considerable increase in the pace of world scientific and technological progress since the end of the last war.
These new circumstances necessitated improvement of methods and forms of industrial management and an extensive economic reform whose main aim is to make social production much more efficient.
The successful fulfilment of the Directives of the 23rd Congress of the C.P.S.U. on the U.S.S.R.'s economic development plan for 1966--70 was an important stage in the Soviet people's effort to consolidate the positions of socialism in its economic competition with capitalism. The Directives said 56 that greater efficiency of production was the main factor behind economic growth and rising living standards.
In fulfilling the five-year plan, the Soviet people scored major successes. In 1970, national income was 41 per cent over the 1965 level, growing at an annual average rate of 7.1 per cent, as compared with 5.7 per cent in the 1961--1965 period. Industrial output increased by 50 per cent. The industries ensuring modern technical progress developed at a fast pace. In the five years, output in the chemical and petrochemical industries increased by 78 per cent, engineering and metal-working by 74 per cent, and electric power by 54 per cent. Almost 1,900 large industrial enterprises were commissioned. In the 1966--70 period, the annual average increase in gross farm output was 21 per cent higher than in the 1961--65 period. The targets set by the 23rd Congress of the CPSU in raising the population's material standards were overfulfilled. The average monthly wages of industrial and office workers went up from 96.5 rubles in 1965 to 122 rubles in 1970. Payments from social consumption funds were considerably increased. Pensions for war-disabled veterans were increased, the pension age for collective farmers was lowered, and social insurance improved. In the five years, a total of 518 million sq m of living space was built, and this helped to improve the living conditions of almost 55 million persons.
Consequently, in the Eighth Five-Year Plan period, the U.S.S.R. made a large stride forward in creating the material and technical basis of communism and in raising the people's living standards. The 24th Congress of the C.P.S.U. noted these successes and approved the Directives for the new and still grander plan for the U.S.S.R.'s economic development from 1971 to 1975.
In deciding on its economic policy, the C.P.S.U. starts from the fact that the supreme goal of production under socialism is to improve the people's living standards, and to provide for the fullest satisfaction of their material and cultural requirements. The Directives envisage a further increase in the working people's cash incomes, mainly through higher payments for their work. The social consumption funds are also to increase considerably. In the Ninth Five-Year Plan period, 22,000 million rubles is to go into raising the people's living standards as compared with 10,000 million in the Eighth Five-Year Plan period. The scale of housing 57 construction is to be further enlarged so as to improve the living conditions of roughly 60 million persons.
The level of economic development achieved makes it possible to provide for some priority growth in the consumer industries, while a high rate of growth is to be maintained in the heavy industry, above all the branches embodying technical progress.
The 24th Congress of the C.P.S.U. proposed a concentration of effort on the solution of the key problem: greater efficiency of social production, with the acceleration of scientific and technical progress and application of the latest scientific and technical achievements in the national economy as the primary task. This will help considerably to raise labour productivity, which is to account for 80 per cent of the growth in national income, 90 per cent of the growth in industrial output, and 100 per cent of the growth in rail freight turnover. It will also help to increase the share of those employed in the non-production sphere from 22.5 per cent in 1970 to 25 per cent in 1975.
Some Western economists say the Soviet economic reform is evidence of a convergence of the two systems which should result in capitalism and socialism becoming a ``unity'' free from the vices and endowed with the virtues of each system. They point to a ``redistribution and equalisation of incomes" and efforts to plan and regulate the economy in the advanced capitalist countries. A report by a U.S. Congress Joint Economic Committee ``New Directions in the Soviet Economy" alleged that the application to the socialist economy of terms like profit, demand and interest on assets was incompatible with Marxist theory and had been borrowed from capitalist practice.^^1^^
These claims are groundless, first, because they ignore the crucial difference between capitalism and socialism: under socialism the basic means of production are owned by the working people in whose interests the national income is distributed, whereas under capitalism private property in the means of production blocks radical social change and abolition of exploitation. Second, because under socialism, besides the specific economic laws engendered by the new, _-_-_
~^^1^^ New Directions in the Soviet Economy, P. 11-A, Washington, 1966, p. 9.
58 more advanced relations of production, there are also the more general economic laws which operate in other modes of production. But these more general laws are modified in substance and form, and this is especially true of commoditymoney relations and the law of value categories.It is quite legitimate for the socialist economy to use commodity-money relations at certain stages of development, and this is dictated by the development of the socialist productive forces. This particularly applies to the present stage of socialism, with the vast accumulation of material and production resources that must be used in the most efficient way.
In evaluating the prospects in the economic competition, account should also be taken of capitalist economic growth, which is extremely erratic. In the U.S.A., for example, postwar crises occurred in 1948--49, 1953--54, 1957--58 and 1960--61. Over the ten years from 1950 to 1960, industrial growth averaged 3.5 per cent a year, and for 1956--61, 1.9 per cent. Since 1962, there has been an upsurge in industrial growth rates which went up to 9 per cent in 1966. Certainly, state-capitalism methods of stimulating investment have done something to increase growth; so, too, has the vast increase in military commitment. The state has carried through a whole series of measures---income and profit tax cuts, shorter write-off periods, etc.---that have stimulated investment in production. The capitalist state, by withdrawing and redistributing up to 40 per cent of internallygenerated surplus value, is capable of exerting some pressure on the economy. But government stimulation of private capital cannot be a permanent and decisive factor in eliminating the contradictions, rejuvenating the economy and effecting high growth rates. No fundamental change has taken place in the capitalist economy to warrant the announcement of an era of crisis-free and rapid progress.
__ALPHA_LVL2__ 6. Economic and Cultural RevolutionAs never before, the progressive forces of the world, especially the peoples of former colonial and semi-colonial possessions of the imperialist powers, are confronted with the 59 vital issue of how best and most radically to accelerate their economic development, how to put world scientific and technological experience to good use for the benefit of social progress in their part of the world. This is a problem of paramount importance for most countries in Asia, Africa and Latin America. The Soviet Union's immense experience in economic, political, social and cultural development of Russia's former colonial territories therefore acquires invaluable significance for all economically underdeveloped countries.
One of the key historical consequences of the October Revolution has been the elimination of economic, political and cultural inequality in the development of the Central European part of the U.S.S.R. and of the once colonially exploited territories of tsarist Russia. This task was made formidable by the extremely low level of the productive forces in those areas. The remaining vestiges of feudalism and even earlier societal forms added to the burden of colonial exploitation. It was the task of the Russian proletariat, equipped as it was with an advanced revolutionary theory, to demonstrate in practical terms the advantages of the socialist system in transforming the previously backward areas into modern thriving economic entities. That this task was carried out in a relatively brief period is more proof of the advantages of socialism in its economic competition with capitalism.
In the course of economic development spurred by capitalist penetration into Russia's backward colonial territories there was a growth in the actual inequality between the centre and these territories. Prospects for closing the gap and attaining a higher development level for all these areas either did not exist or, at best, lay in the remote future. In 1913, the whole vast area of Turkestan (now Uzbekistan, Tajikistan, Turkmenistan and Kirghizia) accounted for only 1.7 per cent of manufacturing and mining output as contrasted with European Russia's 67.2 per cent (excluding Poland).
As capitalism in Russia took its natural haphazard course, the colonial territories soon became agrarian and raw material appendages of the more prosperous industrial regions. They had no large industry, with very rare exceptions, such as the Baku and Grozny oilfields, Georgian manganese and 60 Siberian gold. What industry there was mostly belonged to foreign capital, local industry consisting only of small artisan works employing agricultural raw materials. In 1911, Turkestan had no more than 143 artisan enterprises, only 9 of which employed over 25 people. In these areas, the industrial proletariat made up less than one per cent of the population. In 1913, there were only 204 Tajik industrial workers, in 1916, 242 Turkmen, and so on.
The cultural level of most of the nationalities there was also extremely low. At the turn of the century, only 2.6 per cent of the indigenous population of Central Asia could read or write, that is, only about a tenth as many as in Russia's central areas. Before the revolution there was not a single higher school in these cultural backwoods.
Table 17 Literacy in the Russian Empire, 1897 Per cent Men Women Total Total population 29.3 13.1 21.1 including: European Russia ....... Caucasus 32.6 13.2 13.7 6.0 22.9 12.4 Siberia ......... 19.2 5.1 12.3 Central Asia 7.9 2.2 5.3 including: Russians 37.0 13.8 26.0 Turkic peoples ....... 4.4 0.7 2.6 Source: A. Rashin, The Population of Russia Over 100 Years, Moscow, 1956, pp. 307--08 (Russ. ed.).With the switch to socialism, these backward areas with their virtually illiterate populations found themselves presented with the objective conditions and real opportunities for becoming advanced national states. With the social reforms that accompanied the October Revolution sweeping through these backward territories, the political and economic requirements of their peoples were soon realised. And with the espousal of Soviet economic and political gains, these nationalities were able to develop their own culture, national in form and socialist in content. Today, the non-Russian 61 republics have an advanced industry, large-scale socialist farming and highly skilled white- and blue-collar workers and scientists. Their standard of living and culture bears no comparison with that of fifty years ago.
Rapid economic growth brought about radical changes in the sectoral structure of the national income by these republics, with industry figuring prominently. In Armenia and Azerbaijan, industry accounts for 50 per cent of their national income, which makes them industrial nations. Within each of the fifteen Soviet republics, the economy relies on local primary products, which are used with an eye to the economic interests of the country as a whole. In Azerbaijan, it is oil. In Kazakhstan, the very rich natural deposits have enabled the republic to create a thriving heavy industry. It now has a greater per head output of coal, iron ore, cement and sulphuric acid than the U.S.S.R. average. All the republics are fast developing their own power industry: Azerbaijan alone is today generating five times more power than the whole of pre-revolutionary Russia. In electric power per head of population, the republic now stands ahead of Japan, France and Italy.
It has been the overriding policy to take careful account of national conditions and to bring the economic level of Table Students per 10,000 Population, 1968--69 Soviet Socialist Republics Other countries U.S.S.R.........187 Azerbaijan.......188 Armenia........220 Georgia........190 Kazakhstan......146 Kirghizia.......150 Tajikistan.......145 Turkmenia.......131 Uzbekistan.......192 Italy.......65 * France......88 ** Britain......63 ** Iran.......14 * Pakistan.....26 ** Turkey......30 ** U.S.A.......226 * 1966--67. * 1965--66. Source: The Economy of the U.S.S.R., 1068, pp 174. (>8!> 62 the more backward areas up to that of the more advanced. Each Union republic has been able to diversify its industry and sustain each sector with modern methods and machinery. Georgia, for example, specialises in ferrous metallurgy, machine-tool building, automobiles, chemicals, manganese and non-ferrous metals. Armenia produces a range of precision tools, radio electronics, computers and tools. Azerbaijan makes equipment for extracting and refining oil and has a number of petrochemical plants. Uzbek industry is now advanced enough to produce electric vacuum, semi-conductor and electronic appliances and a variety of sophisticated machinery and machine-tools. Meanwhile, the favourable climate has enabled the non-Russian republics to continue as major producers of vegetables, fruit, tea, cotton, silk, wool, astrakhan and other farm produce.
The economic progress of the Soviet republics is unparalleled as will be seen from a comparison with the nonSoviet countries sharing a common border with them: Afghanistan, Iran, Turkey and Pakistan. In 1964 these four countries together generated per head 95.6 per cent less electricity than the Central Asian republics; they smelted 98 per cent less steel, mined 97 per cent less coal, produced 85 per cent less cement and almost 99 per cent less sulphuric acid.^^1^^
Yet the progress of the once