THE MARKET UNDER SOCIALISM
This has not been published before, at least
to our knowledge. It was circulated to the members of the Stalin Society (UK) -
an organisation founded by W.B.Bland.
It forms part of the Collected Works of Bland in preparation.
May 1, 2005
With the permission of the Committee of the Stalin Society, I am circulating to
members a statement on the present situation in Albania by another former
Secretary of the Albanian Society and myself. An Albanian translation is being
circulated underground by Albanian Marxist—Leninists.
I am taking the opportunity at the same time to circulate a clarification and
amplification of the points I made in the discussion which followed Ella Rule's
excellent paper on Stalin's Economic Problems of Socialism in the USSR'.
W. B. Bland
Is there a Market under Socialism?
It was suggested during the discussion that the term 'market' had relevance only
to a capitalist society.
But the dictionary defines the term 'market' as
". . demand (for a commodity)".
('Oxford English Dictionary', Volume 9; Oxford; 1979; p. 305).
and the term 'demand' as
"a call for a commodity on the part of
('Oxford English Dictionary', Volume 4; Oxford; 1979; p. 430).
But in a socialist society, as in a capitalist society, people possess varying
sums of money which they spend in shops on commodities which are on sale. This
willingness and ability to expend money on commodities constitutes
demand, constitutes a market.
Clearly, both in a capitalist society
and in socialist society there is a 'market', for commodities.
Distribution under Socialism
"...the dispersal among consumers of commodities
('Oxford English Dictionary', Volume 4; Oxford; 19009; p. 8S3).
The principle on which distribution is carried out under socialism is that:
"The right of producers is
proportional to the labour
(K. Marx: 'Critique of the Gotha Programme', in: 'Selected Works', Volume 2;
London; 1943; p. 564)
that is, incomes are proportional to --
the distribution of commodities is geared to -- the quantity and quality of work
Marx admits that distribution of commodities according to work performed is
not completely fair, is not
distribution completely according to need. He points out:
"One man is superior to another physically or
mentally, and so supplies more labour in the same time, or can labour for a
longer time...Further, one worker is married, another not; one has more
children than another, and so on and so forth...
But these defects are inevitable in the first
phase of communist society as it is when it has just emerged after prolonged
birth pangs from capitalist society. Right can never be higher than the
economic structure of society".
(K. Marx: ibid.; p. 654, 565).
Nevertheless, this is the nearest that a
socialist society can get to a
completely fair system of distribution, the nearest that a socialist society can
get to distribution according to need. And it is a
much fairer system of
distribution than is a capitalist society, where the purchasing power of one
whole section of society -- the capitalist class -- depends primarily on the
quantity of means of production owned.
According to Stalin:
"...the basic economic law of
socialism...(requires) the securing of the maximum satisfaction of the
constantly rising material and cultural requirements of the whole of
(J. V. Stalin: 'Economic Problems of Socialism in the USSR'; Moscow; 1952;
For the word 'requirements', we may substitute the word 'needs':
"REQUIREMENT: that which is required or needed;
('Oxford English Dictionary') Volume 13; Oxford; 1989: p. 682).
Since it is not possible under socialism for even the
essential needs of society to be
fully satisfied, the principle
of distribution according to work performed fulfils Stalin's criterion of a
socialist society by achieving the maximum possible satisfaction of the needs of
Only after socialism has given way to
communism can a completely fair principle of distribution be introduced
-- the principle
"...to each according to his needs..."
(V. I. Lenin: 'The State and Revolution', in: 'Works', Volume 7; London;
1937; p. 88).
This principle of distribution is possible only when the productive forces have
been developed to the point where there is an abundance of the necessaries of
life and when people's attitude to work has changed from that which existed
under capitalism; that is:
"when people have become so accustomed to observing the
fundamental rules of social life and when their
labour is so productive that they will voluntarily work
according to their ability..."
(V. I. Lenin: ibid.; p. 88).
Because distribution according to work performed gives a material incentive to
workers to maximise production, it advances society as quickly as possible the
requirement for communism of 'an abundance of the necessaries of life'.
Of course, distribution according to need under communism can never be absolute.
While we may say that communism has been attained when all the necessities of
life can be distributed according to need, the productive forces will continue
to be developed and new needs will arise which can at first be satisfied only on
a rationed basis, e.g., on the socialist principle in accordance with work
Planned Production under
According to Stalin, as has been said:
"...the basic economic law of
socialism...(requires)...securing the maximum satisfaction of the constantly
rising material and cultural requirements of the whole of society".
J.V. Stalin: op. cit,.; p. 45).
For the word 'requirements' we may substitute the word "needs":
REQUIREMENT: that which is required or needed;
('Oxford English Dictionary', Volume 13; Oxford; 1989; p. 682).
It was suggested during the discussion that an essential difference between
capitalism and socialism is that under capitalism production is for the market,
while under socialism production is for
I suggest that this is a false contradiction.
Marx defines a commodity as a useful thing produced, not for the personal use of
the producer and his family, as in what he calls 'natural' production, but
for exchange (by barter for
other commodities or by sale for money). According to Marx:
"...a commodity is...a thing that by its
properties satisfies human wants...(and)...is produced directly for
(Marx: 'Capital', Volume 1; p. 43, 86).
A worker in a clothing factory -- whether under capitalism or under socialism --
does not make garments for the personal use of himself and his family, but for
exchange: that is, he produces
garments as commodities for the market.
Of course, there are fundamental differences between the production of garments
under capitalism and under socialism. Under capitalism, the garment worker is
exploited; under socialism he receives, directly in wages or indirectly in
social services, the full value of his work. Under capitalism, production is --
as a whole -- anarchic; under socialism production is centrally planned by the
socialist state. Under capitalism, the motive and regulator of production is the
gaining of profit by capitalists from this exploitation; under socialism, the
motive and regulator of production is the provision of the maximum possible
satisfaction of the needs of society.
But people expend the money in their possession, within the limits of their
purchasing power, on commodities which they believe will yield them maximum
satisfaction, will yield maximum satisfaction of their needs.
Thus, production for the market is not,
in itself, in contradiction with production for the maximum satisfaction of the
needs of society. Indeed, the
closer the production of consumer goods is geared to demand, to the market, the
closer does it come to yielding maximum satisfaction of the needs of society.
Under competitive capitalism, production is geared to the market
automatically, through the profit
When there is a shortage of a certain commodity on the market, the price of this
commodity rise, so that the rate of profit on the production of this commodity
rises above the average. Spurred by the motive to obtain the highest possible
rate of profit, capitalists rush in to increase the production of this
commodity. In consequence, production of this commodity rises until prices fall
to the point where only the average rate of profit is yielded.
When there is a glut of a certain commodity on the market, the opposite occurs,
and production falls to the point where an average rate of profit is yielded.
There are vital differences in a socialist society.
In the first place, means of production do not come on to the market at all.
In the second place, the profit motive has been abolished along with the
In the third place, the price of a commodity is
fixed by the state -- in general
according to its value, that is, according to the average amount of labour
involved in its production.
It is, therefore, impossible for the production of consumer goods to be geared
automatically to the market. It
must be geared to the market by
conscious decisions of the central planning authority.
Let us take the matter of women's clothes. -- a subject on which I have... [Ms
Under the capitalist system, we know that this is a field in which a great part
is played by fashion, defined as:
"...a prevailing custom...spec.
with regard to apparel or personal adornment".
('Oxford English Dictionary', Volume 5; Oxford; 1939; p. 682).
It is clearly advantageous to the capitalists involved in the clothing industry
that fashion should exert a strong influence on the ideas of people in society,
and that fashions should change periodically. In this way, women consumers can
be persuaded to purchase new clothes long before the old ones have worn out on
the grounds that to wear last year's fashion is a reflection on the wearer's
social standing, which is measured by her purchasing power.
It was the American sociologist Thorstein Veblen who pointed out the relation
between clothes and social class. He noted that in feudal days, when the common
people worked on the land, upper class women in Europe used to cultivate
ultra-white skins to make their class position clear. Then, after the industrial
revolution drove working class women into factories for ten hours a day, upper
class women went in for deeply sun-tanned skins to demonstrate their different
class position. And nothing could demonstrate more clearly than the crinoline
that the wearer didn't work in a factory.
Under capitalism, a new fashion tends to be introduced at one of the periodical
haute couture (high fashion) shows. The original designs are hand-made for a
princess or pop-star, and cost several thousand pounds, so that they demonstrate
that the wearer belongs to the upper class.
Many of these new designs are then bought at a high fee for mass production. But
by the time they have trickled down to Marks and Spencers, a new fashion has
been introduced by the haute couturists, and the process begins again.
In a socialist society, of course, the position is quite different.
Nevertheless, clothes designers will still be necessary. Suppose the planning
authorities say: "Fashion is a bourgeois deviation", and instruct them to design
only jeans as 'the symbol of a classless society'.
There is no great problem about producing enough jeans to meet the requirements
of the whole population. But what of the women who don't want to wear jeans? Do
they have to go on wearing the same old skirt for all time? Do you make it a
criminal offence to wear a skirt? Are skirts really counter-revolutionary? Can
such a policy be reconciled with the basic law of socialism -- 'the maximum
satisfaction of the requirements of society'?
Of course, it is perfectly legitimate in a socialist society for education to be
given on the public media, in schools, etc. on the aesthetic and health aspects
of clothing. But the test of the success of such education is still, ultimately,
There can be only one correct position on the planning of production in any
field of consumer goods: To undertake "market
research", defined as
"...the systematic investigation of the demand
('Oxford English Dictionary', Volume 9; Oxford; 1989; p. 380).
Such systematic investigation in the field of women's clothing will tell the
planners what proportion of women want to wear jeans all the time, occasionally
and never. Designers can show new designs in fashion parades held in stores,
factories and community centres throughout the country. Those attending can be
asked to vote on new designs: 'Would you be interested in purchasing Design 4 if
it were put into production and available at a reasonable price?'. The results
of such investigations will be incorporated in the production plan for women's
Finally, what happens if the planners fail, as a result of neglecting market
research, so that production of consumer goods is not geared to the market? Some
types of clothes goods remain unsold and pile up in warehouses -- not because
people do not have sufficient purchasing power to buy them, for in a socialist
society this is geared to the total value of consumer goods produced), but
because they do not want them.
Further, there will be a shortage in the shops of other types of clothing that
people do want to buy, causing time-wasting queues and public dissatisfaction to
build up. Crooks and spivs will begin to operate a black market in skirts and
costumes in little back-street workshops, and soon distribution in this field
falls into the hands of a local mafia.
Lenin said that socialist democracy
"...is a million times more democratic than the
most democratic republic".
(V. I. Lenin: 'The Proletarian Revolution and the Renegade Kautsky', in:
'Selected Works', Volume 7; London; 1946; p. 135).
We must see that this is made reality by ensuring that the production of
consumer goods is geared to the market,
to what what people actually want, and not to what some bureaucrat thinks they
ought to want. This requires
production to be based on scientific and democratic market research.