13  Expropriation

    After the Krushchev group's decisive victory in the battle for state power (1956-57), an historically unprecedented situation came about in the Soviet Union: a ruling group representing the newly engendered bourgeois forces was in command of an economic system in which socialist, proletarian production relations had the upper hand.

    The superstructure of Soviet society, in other words, was now -- at least in its decisive points -- in the hands of bourgeois forces. But the key centers of the infrastructure or base continued to function and to operate more or less as before in the established socialist way.

    As far as the elementry relations of property in Soviet society are concerned, the seizure of state power by Krushchev's forces already constituted, in and of itself, the expropriation of the Soviet proletariat and the end of the socialist period of Soviet history. The major means of production remained the property of the state, but the state itself was no longer the "property" of the working class. The bourgeois forces, in he very act of capturing state power, usurped the ownership title to the means of production.

    The Krushchev group thus reintroduced the great

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divorce between the working class and the means of production which the Soviet Communist party under Lenin and Stalin had fought ceaselessly to bridge over and to eliminate. The great reconciliation, unification, between the working class and its tools, achieved during the socialist period, was once again ruptured. Khrushchev's seizure of state power in the USSR was the newly engendered Soviet bourgeoisie's "primitive accumulation of capital" described by Karl Marx in "Capital":

    "The process . . . that clears the way for the capitalist system can be none other than the process which takes away from the laborer the possession of his means of production; a process that transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage-laborers. The so-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production." (Capital, I, International ed., p. 714)

    Like the "primitive accumulation" of capitalism on the basis of feudalism, which Marx discusses, the new (or "second") development of capitalism in Russia, this time out of the socialist basis, was in essence a violent process. As is shown by the role played in the seizure by the bourgeoisified leadership of the Soviet army (see the 11th article in this series), the "methods of primitive accumulation are anything but idyllic," as Marx correctly pointed out. Force played the main part. (Capital, ibid.)

    The USSR, in sum, ceased to be a socialist country in the full and complete sense of the term already in 1956-57, with the expropriation of the proletariat. In the same sense the Soviet Union shortly after its birth in 1917, with the formal expropriation of the land, the banks and the major industries by the proletariat as ruling class, ceased to be fully capitalist. Ownership of the means of production was taken over by the working class.

    (The fact that the expropriations in 1917 were proclaimed openly, proudly and defiantly, while their reversal 40 years later took place so covertly that no one could clearly and firmly establish that it had taken place until years later, when the consequences surfaced, does not of

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course affect the substance of the matter. Unlike the proletariat, the bourgeoisie historically -- see again Marx -- has shrouded the ways of its great robberies under various guises, even when it expropriated the feudalists. All the more so when it expropriates the proletariat.)

    At the same time, however, the transfer of property in the means of production from one class to another, both in 1917 and in the reverse case of the mid-1950s, did not in itself bring about any profound changes in the actual relations of production operative in the economic base of the society. As was pointed out in parts 2, 3 and 4 of this series, the economic basis of the USSR in 1917 remained predominantly capitalist, and petty-capitalist at that. The new Soviet power had to embark on a long struggle, full of twists and turns, so as to transform the economic basis and lay the foundations of socialist economy. It had to isolate, restrict, then attack and destroy, the key areas of economic life where capitalist principles prevailed, and establish socialist relations of productton in their place.

    Khrushchev's group had the reverse problem. By seizing state power, they gained legal title of ownership to the means of production. But the transformation of the actual production relations in the infrastructure, the isolation, restriction, destruction of the key strongholds of socialist relations and their replacement by capitalist relations still lay ahead.

    The main blows that Khrushchev and his followers struck in the economic field were touched on earlier (parts 8, 11 and 12) -- abolition of the central planning ministries and the sale of the Machine and Tractor Stations to the collective farms -- and some details about them can now be given to fill in the picture.

    The abolition of the central industrial ministries in Moscow, as several writers on the period have suggested, was in part a purely tactical move on Khrushchev's part, motivated by the immediate needs of his factional struggle against the so-called "antiparty group." For his chief opponents in leadership (Malenkov, Kaganovich and lesser figures; also, after his resignation as foreign minister in June 1956, Molotov) had powerful positions and close ties with the ministries. By abolishing the

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ministries, he deprived his opponents of key power bases. (See e.g., Pistrak, Khrushchev, Grand Tactician, New York 1959, p. 247; Crankshaw, Khrushchev -- A Career, p. 246)

    These short-term tactical motivations explain why Khrushchev himself in 1962 and 1963, and even more so his successors in 1965, were able to turn around and reestablish central industrial ministries to a certain extent. The reestablished ministries, as will be shown, had a different personnel and the kind of "planning" they were to do had nothing in common with socialism. Of this, more later. Meanwhile, Khrushchev's blow at the centralized socialist planning ministries -- their functions were taken over by 105 regional economic councils ('sovnarkhozy') -- had the immediate effect of a widespread resurgence and expansion of the sphere of commodity-money exchange relations.

    "The minister in Moscow," one bourgeois writer on the period noted correctly, "may have had his views distorted by narrow departmentalism, but at least he was able to look at things on a national scale. The chairman of the 'sovnarkhoz' at Omsk cannot see beyond the confines of the Omsk province. Whenever he has choices to make he cannot, with the best will in the world, take the national interest properly into account." (Alec Nove, Economic Rationality . . . , New York 1964, p. 59) An immediate result of the abolition of the ministries, therefore, was to create in the economic decision-making process a strong element of narrow localism: each little region for itself.

    But, while plannning could be fragmented into 100 pieces, the material production process could not. Advanced large-scale industry draws its materials from, and sends its output to, many different regions all over the country. Soviet regional planners therefore, and the directors of enterprises even more so, found themselves under the new system faced with an enormous headache in procuring essential raw materials and supplies and distributing their output outside the immediate regional planning area. Such central organs of coordination and forecasting as remained were of little help, as numerous complaints in the press attested. (Nove. p. 104) They were compelled by the setup to rely on their own "enterprise" and "ingenuity."

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    Thus arose what another writer describes as "an unofficial network of interenterprise relationships" in which "blat" (personal influence) and "tolkachi" (brokers, "fixers") created the nationwide links formerly provided by central planning. An enterprise director needing materials phoned a crony in another region who had them or contacted a broker who knew where to get them; and this whole system of deals was worked "off the books," informally, under various covers, through person-to-person negotiations. "A veritable army of 'tolkachi' . . . assisted industrialists in dealing with their most difficult problem, that of securing supplies. These specialized middlemen made it their business to know where equipment and materials of all kinds could be obtained on the ubiquitous 'free market.'" (M. Miller, Rise of the Russian Consumer, London 1965, p. 33)

    This was in fact not yet a free market, hence the quotation marks. It was an illegal market, and both the managers and the specialized brokers could be heavily punished under existing Soviet law if caught making deals outside the plan. But this black market was so necessary under the system, and prosecutions so few, that it should more properly be called a "grey" market.

    It is easy to recognize in the figures of the "tolkachi" the reincarnation of the NEPmen of the 1920s. (See part 3 of the series) Likewise the managers' own interenterprise dealings outside the plan revived a relationship that was legal in the early phases of Lenin's New Economic Policy, when enterprises could buy and sell from each other on their own hook. (See e.g., Maurice Dobb, Soviet Economic Development, New York 1966, pp. 131-148) But what was temporarily legal in early NEP, as part of the limited retreat to state capitalism at the time, was outlawed and in fact stamped out as the 1920s ended. Just the opposite under Khrushchev. There the rights and powers of the enterprise managers gradually expanded.

    A key step here was the abolition of the law on economic sabotage, which had made directors liable to criminal charges for nonfulfillment of the plan; the new regulations, writes Granick, are "much less severe than they once were." Khrushchev, this student of Soviet executives observed, went "a long way toward eliminating

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the trauma previously embedded in Soviet executive positions." (Red Executive, p. 43, 136) He did so not by giving greater responsibilities for coordinating production to the workers themselves, but by enhancing the powers and legalizing many of the illegal practices of the enterprise directors. Khrushchev's general report to the 22nd Congress of the CPSU in 1961 -- a document which pretends to map out the advance to communism in the USSR by 1980 -- included the "further gradual extension of managerial powers" in the party program, to leave no doubt on this score. (Documents, Vol. 11, New York 1961, p. 98)

    At about this time also, there was a rash of court cases in many areas of the USSR where workers protested that managers had dismissed them from their jobs illegally. (Conquest, Industrial Workers, p . 20) Most were reinstated at the time; the managers had acted too hastily. Later on, after Khrushchev, the managers achieved the power to fire virtually at will and their private dealings were legalized, as will be shown.

    Thus the major Khrushchev "reforms" in industrial organization reveal a definite overall pattern. Step by step they broaden the area in which commodity-money exchange relations -- the breeding ground of capitalism -- govern economic behavior. At first, this extension takes place in the shadows; gradually it is legalized; and the demand for further extension is written into the party program.

    In agriculture Khrushchev's attack on the strongholds of socialist production relations was, if anything, more direct and complete than in industry. During 1957-58, as already mentioned, the Soviet state under Khrushchev sold off to the collective farms the Machine and Tractor Stations (MTS). It was a case of the state expropriating itself for the "benefit" of the collective farms, the only avowed and open tampering with socialist property relations that Khrushchev and his successors engaged in. The move gave the collectives, as Stalin had said, the "exceptional status . . . not shared by any other enterprise in our country," of owning basic instruments of production (Economic Problems of Socialism, p. 95), but this analysis, together with Stalin's warning that it would lead to the

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regeneration of capitalism, was attacked and discarded by Khrushchev as so much "dogmatism" connected with the "cult of the personality." (Linden, Khrushchev and the Soviet Leadership, Baltimore 1966, p. 61).

    Along with the sell-off, Khrushchev abolished the plan targets (production quotas) to which the collective farms had been subjected. The farms were thus, more than any other kind of enterprise at the time, "on their own" -- with little relations other than commodity-exchange relations to link them with the towns. It was only a short time thereafter, due in part to the cost of having to maintain their own machinery, in part to the profiteering spirit that seized hold of the farms, that the controlled prices paid to the collective farms by the state had to be increased in a number of product lines. In 1962, as a direct outcome of the new setup, meat and dairy product prices to the consumer were raised 30 percent and 20 percent respectively. (Miller, op. cit. p. 235)

    The political impact of the sell-off was also considerable. The MTSs had been not only the mechanical backbone of the collective farms, but also played the role of outposts of the industrial proletariat among the peasantry. Their actions in executing state policy necessarily exercised enormous leverage on the collective farms; and among the workers at each MTS there was a party branch whose role was to participate in the collective farm leadership and guide it in a proletarian direction. With the sale of the stations, these roles collapsed and large numbers of party cells on the collective farms ceased to exist. (Nove, op. cit. p. 65)

    All of these and other Khrushchevian measures, however, did not quite yet amount to a restoration of capitalism. By the time of the 22nd Congress in 1961, the socialist fabric of production relations was stretched very thin and was full of holes, but the main strands still held. It required a fresh bourgeois offensive -- four more years of demagogy, wrecking and purges -- before they snapped.