Marx-Engels | Lenin | Stalin | Home Page
Law of Value- Pricing in the national economy of the USSR
Price in a socialist society
Marxist-Leninist economic theory teaches that price, as a category of commodity economy, is the most developed monetary form of the value of a commodity, "price," Marx points out, "is the monetary expression of value" 1 .
V. I. Lenin defines the ratio of price and value of goods as follows:“Price is a manifestation of the law of value. Value is the law of prices, i.e., a generalized expression of the phenomenon of price” 2 . In prices, the first function of money as a measure of the value of commodities finds its manifestation, which consists, as Marx says, “to supply the world of commodities with material for expressing value, i.e., in order to express the values of commodities as quantities of the same name, qualitatively the same and quantitatively comparable.” 3
In the price of a commodity, the magnitude of value does not appear directly as a quantitatively determined expenditure of social labor time, but "as the exchange relation of the given commodity to the money commodity located outside it" 4 . And since in this respect not only the magnitude of the value of a commodity can be expressed, but also the conditions of its alienation, the very form of price presupposes the possibility of a quantitative discrepancy between the price of an individual commodity and the magnitude of its value, or the possibility of a deviation of the price of a commodity from the magnitude of its value.
Prices presuppose the existence of commodity production, i.e., production calculated on the exchange of products through purchase and sale, with the help of money. Where there are commodities, there are also value and price, which is its money form. The objective necessity of prices and the specific forms in which price formation appears in socialist society are explained primarily and mainly by the existence here, within certain limits, of commodity production and commodity circulation. The exposition of questions of price formation in socialist society is therefore connected with a description of commodity production and commodity circulation in the USSR.(...)The operation of the law of value in the USSR at a given stage of socialist development is manifested in the presence of prices in the following areas of the socialist economy:
a) in the sphere of circulation of consumer goods;
b) in the sphere of circulation of agricultural raw materials between collective farms and state industry;
c) in the sphere of circulation of means of production between state enterprises.
Due to the limitation of the sphere of commodity production and commodity circulation, and at the same time the scope of the law of value, the role of the law of value in the formation of prices is not the same in each of the listed spheres of the socialist economy. In the sphere of circulation of consumer goods, the law of value acts as a regulator of the prices of goods (of course, within certain limits, which will be discussed below), moreover, commodity circulation in the USSR, under the conditions of the existence of two forms of socialist property, represents two markets - an organized market on which huge masses of commodities allowed by the state into trade at stable prices, and an unorganized market.
Let us first consider how the regulating effect of the law of value affects the formation of prices for commodities circulating on the organized market (in state and cooperative trade). Goods circulating in state and cooperative trade are sold at prices set by the state itself. However, the state cannot arbitrarily determine the level of commodity prices.
The level of prices for goods circulating in state and cooperative trade essentially determines the distribution of the total social product and national income between accumulation and consumption, between the share of the whole society and the share received for personal consumption by individual members of socialist society. In determining the prices of commodities, the Soviet state proceeds from the reimbursement of society's costs of their production, from the reimbursement of their value. It is clear that in this case we are talking about the replacement of the cost of production of goods as a whole, within the limits of the entire mass of commodities circulating in state and cooperative trade, or the main commodity groups, and not about the exact coincidence of the price and value of each individual commodity. As stated at the beginning of the chapter, the very form of price presupposes the possibility of a quantitative discrepancy between the price and the value of an individual commodity. The Soviet state takes this feature of the price form into account and, if necessary, fixes prices for commodities with a deviation from their values.
The regulating influence of the law of value cannot but affect in a certain way the value relations between individual commodities. In contrast to the means of production, which are directly distributed among individual enterprises, consumer goods are acquired by consumers (collective farms, the population) in the form of free purchase of certain consumer goods. Due to the interchangeability of many material goods, purchasing demand can, depending on the ratio of income and prices, be distributed in the most diverse ways among different groups of goods. It follows from this that, firstly, the prices of consumer goods cannot represent something isolated from each other, but form a system of prices interconnected by known correlations, which are based on the ratio of goods by value.
As a result of the socialist socialization of the means of production, both in town and in the countryside, and the emergence on this basis of the law of planned, proportional development of the national economy, spontaneous price fluctuations typical of a commodity-capitalist economy have been completely eliminated within the organized market. The anarchic nature of production inherent in the latter is manifested in the spontaneous, disorderly movement of market prices, which constantly deviate from the values of commodities, do not coincide with them, or coincide only as an exception. The law of value finds its way through this disorderly chaos of commodity prices only as the blindly operating law of averages. The cyclical nature of capitalist production finds its expression in the cyclical movement of commodity prices: their rise is in the upswing phase, sharp, impetuous, as a rule, fall, in the crisis phase.
In contrast to capitalism, one of the characteristic features of the economy of a socialist society is the direct planned fixing of prices for commodities circulating within the organized market. The possibility for the Soviet state to directly set prices for goods was the result of the nationalization of industry, transport, land, and banks; elimination of private capitalist elements in the economy on the basis of the socialist socialization of the means of production in industry and agriculture; establishing a monopoly of foreign trade; expanding the scope of the law of planned, proportional development.
Goods produced at state enterprises go directly to the disposal of the Soviet state as the owner of these enterprises. Through state procurement, contracting and purchases, and also as a result of the use of a system of payment in kind for the work performed by the MTS, the Soviet state also concentrates in its hands the bulk of the marketable output of the collective farms. By virtue of the monopoly of foreign trade in the USSR, imported goods, as well as goods of domestic production, enter the organized socialist trade turnover. Thus, at the disposal of the state are concentrated huge masses of goods, representing the vast majority of commodity circulation in the country.
Since the main part of the means of production is the direct property of the Soviet state and is used in state enterprises, and since the state acquires the bulk of the marketable output of the collective farms, the solvent demand of the workers, the collective farm peasantry, the intelligentsia is determined mainly by the money income received from the state (wages of workers and employees, incomes peasants from the sale of agricultural products to the state, pensions, scholarships, etc.).
All this allows the state, taking into account the objective laws of commodity and monetary circulation, to establish the necessary correspondence between the monetary incomes of the population and the supply of goods at state prices. Finally, the determination of costs in state enterprises and the establishment of state prices for agricultural products placed at the disposal of the state make it possible to plan the costs of production and circulation of goods sent to state and cooperative trade, which is necessary for setting prices.
Thus, under the conditions of commodity circulation in socialist society, a new type of price arises, which history has not known until now, a price directly established by the socialist state, a stable price not subject to spontaneous fluctuations.
So far we have been talking about the nature of prices and the conditions that determine their formation within the limits of an organized market - state and cooperative trade. However, the presence of two forms of socialist property finds its manifestation at the present time in the existence of a collective-farm market in addition to state and cooperative trade. Part of the surplus of collective farm products is sold at this market. Here, too, individual collective farmers realize a part of their income in kind, received from the socialized economy in the order of distribution of production according to workdays, and also from personal household plots. Prices on the collective-farm market are not determined by the state, but are formed on the basis of an agreement between sellers and buyers. Hence the spontaneous manifestations of the action of the law of value in this market, which are found in spontaneous price fluctuations depending on the ratio of demand and supply of goods.
Thus, the existence of two markets means the existence within the limits of commodity circulation in the USSR of two prices, different in their nature and forms of formation, and the possibility of discrepancies between these prices. The discrepancies between state prices and the prices of the collective-farm market create the possibility of a certain spontaneous redistribution of the incomes of the population through the collective-farm market. This possibility turns into reality in cases where there is a discrepancy between supply and demand for individual food products at one point or another. That is why the range of deviations of prices on the collective-farm market from state prices for foodstuffs serves as an important indirect indicator of the state and cooperative trade in foodstuffs in individual regions of the USSR.
The absence of direct price planning for commodities circulating in collective-farm trade does not mean, however, that the operation of the law of value as a price regulator in this trade is absolutely unlimited. The main and decisive place in commodity circulation is occupied by state and cooperative trade. The collective farm market plays the role of an additional source of food supply. Therefore, the prices prevailing on the collective-farm market are not something isolated, independent of the stable planned prices at which the vast majority of commodities circulating in the country are sold. Using the law of value, the Soviet state influences the level of prices on the collective farm market by selling the masses of goods at its disposal at stable, consistently lower state prices. Growth in the production of commodities, the formation of substantial food reserves at the disposal of the state, and the all-round development of state and co-operative trade are the decisive means by which the state influences the collective-farm market and the prices that are formed on it.
The economic turnover of agricultural raw materials between collective farms and state industry is connected with the existence of prices at which these raw materials are sold to the state.
What are these prices, does the law of value have a regulating effect on these prices, just as it does with respect to the prices at which collective farms sell their surplus consumer products on the collective farm market?
Agricultural raw materials, in contrast to the surplus of consumer products, are not sold by collective farms to any buyer, but are supplied only to the state.
JV Stalin points out that “the influence of the law of value on the price of agricultural raw materials cannot in any way be regulating. First, our prices for agricultural raw materials are fixed, set by a plan, and not "free". Secondly, the scale of the production of agricultural raw materials is determined not by the elements and not by any random elements, but by a plan. Thirdly, the instruments of production necessary for the production of agricultural raw materials are concentrated not in the hands of individuals or groups of individuals, but in the hands of the state. What then remains of the regulating role of the law of value? It turns out that the law of value itself is regulated by the above-mentioned facts inherent in socialist production.
But not being a price regulator, the law of value has an impact on the formation of prices for agricultural raw materials, and is one of the factors in this matter. The circulation of agricultural raw materials between the collective farms and state industry takes place in such a way that the collective farms cede to the state the right of ownership of this part of their production, and the state acquires the right of ownership of it. The prices at which the collective farms supply raw materials and the state industry purchases them determine the cash income of the collective farms in this part of their output, on the one hand, and the amount of outlays, as well as the accumulation of state industry, on the other. That is why, in determining prices for agricultural raw materials, the state cannot act arbitrarily, disregarding the cost of production of products of individual branches of agriculture.
Since the turnover of the means of production within the country is not related to the actual ones. sale and purchase relations, prices in the sphere of production of the means of production do not fulfill the functions of distributing the social product and national income between the production sectors of the socialist economy, and also between accumulation and consumption. Changes in prices affect here only relations within the state economy (a reduction in profits in some sectors and a reduction in costs in others, a reduction in deductions from profits to the state budget, on the one hand, and a reduction in state budget expenditures, on the other), without causing a redistribution of national income between accumulation fund and consumption fund, as well as between the state and collective farm sectors of the economy. With each successive reduction in prices for the means of production in industry, the balance of settlement relations between the state budget and the state economy is usually reduced without loss or gain for the state budget. The only exception is the loss from lower prices for horse-drawn agricultural implements and livestock-breeding equipment sold to collective farms at wholesale prices with a trade markup.
...and the expedient form by which socialist society can exercise this control in conditions where the direct measurement of labor costs by labor time is impossible.
The use of prices to check and control the work of an enterprise finds its manifestation in the fact that the scale of the production activities of individual enterprises is measured indirectly, as cash income from manufactured products at established state prices. The costs of enterprises for the manufacture of products are also calculated on the basis of current state prices for material elements of production. Since the assessment of the results of the economic activity of the enterprise, which determines the material incentives for the enterprise and its employees, is carried out on the basis of a comparison of cash income and cash expenditures of the enterprise, it becomes possible to use prices as an additional incentive for production growth and cost savings.
As a result of the socialist socialization of the means of production, both in town and in the countryside, the law of value also lost its significance as a regulator of prices for agricultural raw materials, although it is one of the factors in their formation. Since the circulation of agricultural raw materials between the collective farms and state industry is connected with the distribution of the social product and national income between the productive sectors of socialist society, procurement prices for agricultural raw materials essentially determine the incomes of collective farms and collective farmers, on the one hand, and the accumulation of state industry, on the other.
In the sphere of commodity circulation, the law of value retains the role of price regulator. But since this regulating influence of the law of value is essentially limited by the socialist socialization of the means of production and the planned management of the economy, under socialism there is no "free" price play for consumer goods circulating on the organized market.
The planned setting of prices for consumer goods turns the retail price system, along with the wage system, into an instrument for the planned distribution of the created national income of the country for accumulation and consumption, as well as the total consumption fund among the working class, the peasantry, and the intelligentsia.
The ratio between the prices of services and goods purchased by the working class and the intelligentsia and the monetary payment for their labor determines the level of real wages. The ratio of prices for goods of state industry, on the one hand, and procurement and purchasing prices for agricultural products, on the other, is, along with incomes in kind, an important indicator of the level of real incomes of the collective farm peasantry.
The level of retail prices is most directly related to the purchasing power of the ruble and the capacity of the domestic market. The lower the price level, the higher the purchasing power of the ruble, the greater the effective demand for goods, the greater the capacity of the domestic market. The fact that our enterprises cannot do without taking into account the operation of the law of value, without using the form of value, makes it necessary to widely use in the practice of national economic planning, along with physical indicators, cost (value) indicators, which are based on a system of effective prices. With the help of value meters are determined: the scale, pace of development, as well as the structure of social production; volumes and growth rates of gross and marketable output of sectors of the national economy; the correlation between the production of means of production and the production of consumer goods; proportions in the development of related and interrelated industries. All the synthetic problems of the national economic plan—the planning of the total social product, the planning of the national income and its distribution for accumulation and consumption, the planning of capital works, the planning of production and circulation costs, the planning of trade, the financial program of the plan—are connected with the use of value-based meters.
For the present stage of development of the Soviet state, mastery of the law of value, the ability to take its requirements into account in economic activity, the ability to implement a correct price policy are one of the most important tasks of our economic practice. Therefore, the study of the existing price system, its every possible improvement and skillful application are an urgent task for our economic and planners.