Are there economic laws of socialism?

Monthly Review, July-August, 1985 by Harry Magdoff

The Bolsheviks believed that by overthrowing capitalism they were acting in harmony with a scientific law of history. Buty they were equally aware that, apart from general principles, there was no science of how socialism was to be constructed; nor were there preconceived laws of socialist economic development. As Leim saw it,

A transformation must, by historical necessity, take place along a broad line, that private ownership of the means of production had been condemned by history, that it would break, that the exploiters would eventually be expropriated. This was established with scientific exactitude. We knew it when we raised in our hand the banner of socialism, when we declared ourselves socialists, when we founded socialist parties, and when we set out to transform society. We knew it when we seized power in order to embark on socialist reorganization. But the forms of transformation and the rapidity of the development of the concrete reorganization we could not know. Only collective experience, only the experience of millions, can give decisive indications in this respect.

Although there were no specific advance scenarios on how to construct a socialist society, leading Bolshevik theoreticians nevertheless took for granted that the economic laws of capitalism, in fact political economy itself, would no longer apply. For Bukharin this was axiomatic:

Indeed, as soon as we take an organized social economy, all the basic "problems" of political economy disappear: problems of value, price, profit, and so on. Here "relations between people" are not expressed as "relations between things," and the social economy is regulated not by the blind forces of the market and competition, but by a consciously followed plan. In this case, there can be a certain system of analysis on the one hand, or a system of norms on the other, but there will be no room for a science which studies the blind laws of the market, since there will be no market. Thus the end of a commodity society will also see the end of political economy.

This formulation, appearing in a book published in Moscow in 1920, seemed to fit not only the preconceptions about an ideal socialist future but the period of War Communism as well. The shift from War Communism to NEP, however, brought about the reintroduction of capitalist commodity markets and with it the recognition that capitalist laws of economics were again operating, if only during the state of reconstruction of an economy ruined by a devastating civil war and during the early stages of transition to a planned society. Thus the influential economist Preobrazhensky discussed in his New Economics the existence of a conflict between the law of value and the element of planning, noting at the same time that the law of value would die out the further Russia advanced toward socialist planning.

General propositions about the role of economic laws and the conflict between market and planning, however, were not of much help when the time came to work out concretely--for the economy as a whole and for the first time in history--a system of socialist planning. It is hardly surprising that there was no unanimity on how to proceed. Differences in judgment on analytical and organizational matters were intermingled with differences in political and clas perspective. Out of this grew an unusually lively and open debate among Soviet economists throughout most of the 1920s. In general two types of theoretical and practical recommendations emerged, which came to be distinguised as the genetic versus the teleological approach.

The geneticists emphasized the prevalence of economic laws or "regularities." Effective planning, they argued, would have to rely primarily on predictions of the future course of the objective tendencies inherent in the economy, which in turn would set the limits on what the plan could accomplish. The economists of this "school" stressed the role of market forces, profitability, scarce resources, and the need for balanced growth; they were especially conscious of the backward state of agriculture. The teleologists, on the other hand, favored the establishment of ambitious goals, envisioning planning as a deliberate program to change the economic structure and maximize growth. The geneticists' reliance on the economic laws of capitalism was rejected; planning itself would become the "law." The advocates of this approach attached less importance to agriculture and the peasantry, stressing instead the goal of rapid industrialization. They did of course recognize the existence of constraints, but these, they insisted, were physical rather than market limitations.

The lines between these two approaches were not always hard and fast. The need for purposeful direction of the economy was acknowledged by the geneticists, while the teleologists understood the uses of prediction based on the behavior patterns of the economy. As Carr explains,

The issue partly turned on the character of the period. So long as policy was directed primarily to the task of recovery, to a restoration of a level of production and efficiency already attained in the past, the "genetic" approach satisfied practical requirements.