14  The 'Debate'


    If a history is ever written of the great hypocrisies of the 20th century, especially those perpetuated in politics, a chapter of it must go to describing the program for "advancing to communism" put forward by Nikita Khrushchev at the Soviet party's October 1961 22nd Congress.

    It was a period of muddle and confusion in the USSR, especially in the economic sphere. The old system, gutted and partly sold off by Khrushchev earlier, no longer functioned as it used to; yet the outlines of what was to replace it had not yet crystallized. As if to give sense and direction to this murky transition, Khrushchev stepped in with the declaration that the USSR would be a fully communist, classless society by the year 1980 and that the period ot building communism had now begun.

    This declaration seemed to lend consistency and legitimacy to Khrushchev's political theses about the abolition of the proletarian dictatorship (in favor of the "state of the whole people") and of the proletarian political character of the Communist party (in favor of a "party of the whole people"). For if communism were just around the corner, if class distinctions had all but disappeared, if everyone was a proletarian, then "in

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respect to which class can there possibly be a dictatorship? There is no such class," argued Krhushchev. (Documents of the 22nd Congress of the CPSU, New York 1961, Vol. 2, p. 157)

    But, on the other hand, even this shallow appearance of formal consistency disappeared when it came to the matter of Khrushchev's proposals in the realm of political economic reorganization. Those who picked carefully through the soup of Khrushchev's general rhetoric for the meat of specific proposals regarding the economy found a peculiar clash of flavors.

    Under the rhetorical heading, for example, of the need to "draw upon the creative initiative of the masses and give it ever greater scope," there is the explanation that "this calls for a further gradual extension of managerial powers and of the responsibility of local bodies and enterprises." (Documents Vol. 2, p. 98)

    This is sheer doubletalk, where "masses" really means managers and directors, and releasing "creative initiative" means increasing the directors' repressive powers. The same logic-chopping marks Khrushchev's approach to the economic categories:

    "In the course of communist construction it is our task to make still greater use of, and to improve, the financial and credit levers, financial control, prices and profits. We must elevate the importance of profit and profitability." (ibid. p. 99)

    The "advance toward communism," in other words, is to be achieved not by downgrading and gradually eliminating profit and profitability as drives that regulate economic behavior, but just the contrary by extending and strengthening them. To illustrate more clearly what he meant, Khrushchev observed:

    "It would do no harm if we were also to learn from the foremost capitalist models how to speed up construction, initiate and run new enterprises. . . . We should not scorn useful foreign experience, and should critically adopt all technically and organizationally valuable points available in the West, including the field of speeding the turnover of funds and getting greater returns from capitai investments." (p. 96, emphasis added)

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    Borrow from the West not only technology, Khrushchev was saying, but also the secrets of its economic organization, which allow its corporations to realize maximurm profits with the maximum speed.

    These passages, to be sure, were wrapped up in so many layers of "communist" reassurances and promises that an inattentive reader might altogether miss their significance. That these passages contained the grain of Khrushchev's program, however, while all the rest was chaff, became clear over the course of the great "economic debate" that was launched directly after the congress and lasted until early 1964, shortly before Khrushchev's own ouster.

    The "debate" was in essence a faction fight, conducted -- as far as its visible portion went -- in the pages of economic journals and Pravda (the party organ), between two main camps within the newly emerged bourgeois forces within Soviet society. Very broadly speaking, one side upheld the interests of the economic planning bureaucracy, or what was left of it, over and against the power of the enterprise directors and managers; while the other fought for the supremacy of the enterprises over the remnants of the economic planning structures.

    It is significant that neither side fought -- or was permitted, in the pages of the revisionist party-controlled press, to come out -- for the revival of "counterplanning" or other ways of direct mass participation in the planning process. (For counterplanning, see part 6 of this series.) Insofar as Marxist-Leninist points of view occasionally crept into the debate, they were on the side of the "planners," but this planning machinery had grown so distant from the activity of the working class at the point of production that it represented, at the time of the debate, only another form of bourgeois hegemony.

    The partisans of "planning" pushed a scheme known as the NVP, for Normative Value of Processing, a mildly novel way or keeping the accounts of enterprises and evaluating their performance under the plan. It was basically a minor adaptation of the old machinery; and it was said that it forced managers to be more economical in the use of raw materials and supplies. Because the intent

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of the new wrinkle was to keep the old planning forms basically intact, the NVPers were dubbed the "conservatives" in the debate.

    On the other side, calling themselves "liberals," was a loose coalition of economists whose best-known spokesman was Yevsei Liberman, professor at a business-management institute in the Ukrainian city of Kharkov. Though there were many differences among them, and they frequently shifted their emphasis as the winds of the debate blew, the main points in their case were to strengthen the role of profits and to enhance the autonomy of the enterprises from the plan.

    As regards profits, the "liberal" school denied, a la Khrushchev, that there was anything contradictory between socialism and an enhanced role for profit-maximization in the conduct of enterprises. After all, Liberman argued, society as a whole must show a "profit" -- and excess of production over consumption -- and "what is good for society is good for every enterprise." (See E. Zaleski, Planning Reforms in the Soviet Union, Chapel Hill 1967, p. 79)

    But while the role of profit was a key storm center in the debate, Liberman and many of his partisans emphasized that this was not the fundamental issue for them. "We find it strange," Liberman wrote, "when people argue: what is better -- the normative processing cost [NVP], for example, or profit?" What they were proposing, Liberman underlined, was not merely a "revision of indices, but . . . a reform of the enterprise's relations with the national cconomy." It was, he said, the "whole system of relations" that required change. (Felker, Soviet Economic Controversies, Cambridge, 1966, p. 87)

    There is little doubt that the Liberman-school proposals echoed the views primarily of the enterprise directors and managers who wanted to gather into their hands not only more power over the workers -- on this both camps agreed -- but also more power relative to the planners. What was variously hinted at or spelled out by the "liberal" ideologists was that the enterprise management, in order to be able to pursue maximum profit, must be made free of restrictions imposed from above and allowed to decide more or less where to buy

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supplies and where to sell their output and at what price. Since Khrushchev's 1957-58 "reforms," they had been doing so to a great extent already, but in the shadow of illegality. (See part 12 of this series.) The catch-phrase "new relations between enterprises and the national economy" meant to make it legal. Basically, these managers and directors wanted to set themselves up as classic capitalist entrepreneurs. Liberman, with his sophisms borrowed from Adam Smith -- "what's good for society is good for every enterprise" is almost verbatim Adam Smith -- was their prophet.

    Through the first two years of the debate, however, according to several accounts, the "liberals" had very much the worst of it in the press. The NVP-partisans, with their emphasis on the old machinery, had the force of habit and familiarity on their side; and their new wrinkle, the NVP index itself, had been tested experimentally in the Tatar, Donetsk and Lithuanian regions. Good results had been claimed for it. What the liberals advocated, by contrast, was pure, untested theoretical speculation; and even as theory it was dubious to many, because its emphasis on profits smelled of capitalism and it meant an obvious downgrading of the plan. As 1964 began, the "liberals" went on the defensive and grew increasingly silent. A note of triumph crept into the pronouncements of the NVP-partisans. It was then, in early 1964, that Khrushchev personally intervened, making strong official statement in favor of profits, which threw the weight of the party leadership behind the Liberman school.

    In summer came the coup de grace against the NVPers. In a series of articles appearing in Pravda, prominent Khrushchevites led by the academician L. Leontyiev (not to be confused with the older, Marxist-Leninist A. Leontiev) accused the "antiprofits" school of "Stalinism."

    "The problem which we face now in determining if profit should be the basic index in judging the work of the enterprise," Leontyiev wrote, "can be attributed in no small way to the lack of regard for the immutable law of economic construction during the Stalin era. This immutable law, regardless of the system under which it operates, is universal; an economy must produce more

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than is expended on production; and it is this principle, however unheeded it has been in the past, that theoretically provides the foundation for the acceptance of profits today in the Soviet Union." (Quoted in Felker, pp. 77-78)

    This breathtaking piece of brazenness -- as if there had been no economic growth in the USSR under Stalin's leadership! -- and of metaphysics ("immutable law") served as a warning signal to the NVP-advocates that, if they persisted, they would go the way of the so-called "antiparty group" into oblivion. Under these circumstances the "liberals" emerged triumphant. They were granted an experimental trial of some of their ideas in a series of light-industrial enterprises producing for the consumer market (the Bolshevichka-Mayak experiments), while the experiments of their opponents were discontinued.

    Nikita Khrushchev, however, did not remain in power long enough to tend the fruits of what he had sown. In October 1964 he was out-maneuvered and deposed by his colleagues, headed by Leonid Brezhnev and Alexei Kosygin. A harvest failure due largely to Khrushchev's "virgin lands" scheme, the unworkability of some of his tactics such as splitting the party into agricultural and industrial regions, his blunders in foreign policy vis-a-vis Yugoslavia, Cuba, China and Albania, and to a large extent the vulgarity of his style -- notably banging his shoe on the podium at the United Nations -- had made Khrushchev into a figure of scorn and ridicule who threatened to bring discredit on the class he represented.

    His successors criticized him for "subjectivism" and for "going ahead too fast;" and made a number of minor adjustments of substance and style in Soviet policy, domestic and foreign. But they were quick to announce, in early November, that his economic reorganization would continue and spread along the same basic lines. (Linden, Khrushchev and the Soviet Leadership, Baltimore 1966, p. 225) At the end of the year they extended the scope of the Bolshevichka-Mayak experiments, injecting the new system for the first time also into heavy industry. (Felker, p.51)

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    Things then began to move very quickly. In March, a plenary meeting of the Central Committee of the party declared it was time to "begin devising measures to improve the rationality of the system." In June, an important conference was held in Moscow, bringing together economists, enterprise directors and planners from all parts of the USSR, to actually "devise measures." The consensus of the meeting, according to Pravda's report, was that "the time had come . . . to decrease detailed planning from above and to reduce the quantity of indices assigned to the enterprises, and, in so doing, to provide conditions for operational independence and for developing healthy economic initiative on the part of the enterprise."

    The time had come also "when the role of profits in appraising enterprise operations could be elevated to a more prominent position among the set of indicators and that profits themselves should provide the principal sources for the formation of enterprise funds. . . ." There was also agreement that the time had come to tackle what was called "the market problem," which, Pravda said, "exists not only for consumer goods but also for the means of production. There is no end of work in this sphere." (Quoted in Felker, pp. 91-92)

    Toward the end of September 1965 the Central Committee met again. At the end of it, Premier Kosygin, in a lengthy speech, announced a series of economic "reforms," which one writer rightly termed "certainly the most prominent [measures] in the economic sphere since Stalin's . . . reforms in 1928 that terminated NEP." (Felker, p.93) These measures, however, went plainly and clearly in the opposite direction. Instead of subjecting the enterprises to planning, they virtually (and eventually, completely) subjected planning to the enterprises; instead of eliminating the market in means of production and labor power, they expanded, legalized and strengthened it; instead of eliminating profiteering, they raised it to a principle -- in short, instead of constructing socialism, the Kosygin reforms restored capitalism.