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Chapter
XI
Political Economy
Contribution of Marx and
Engels
Contribution of Lenin
Contribution of Mao
Economic Laws of Socialism
Absorbing all
the rational aspects of the German classical philosophy, English
classical political economy and French revolutionary and socialist
doctrines Marx discovered the Materialist Conception of History.
According to this revolutionary conception of history. The development
of civil society is to be explained on the basis of the economic
relations and their development. Thus political economy was developed
and it became an instrument to reveal the relation between people
instead of that between things (i.e. the exchange of one commodity for
another) as was explained by the bourgeois economists. Engels clearly
explained this : "Economics deals not with things but with relations
between persons, and in the last resort between classes." 32
Contribution of Marx and Engels
The political
economy as developed by Marx repudiating the bourgeois economics was
aptly exposed by Lenin. "It is the ultimate aim . . . . . analysis of
the commodity." 33
"‘It is the
ultimate aim of this work, to lay bare the economic law of motion of
modern society’ (that is to say, capitalist, bourgeois society), says
Marx in the preface to Capital. An investigation of the relations
of production in a given, historically defined society, in their
genesis, development, and decline – such is the content of Marx’s
economic doctrine. In capitalist society it is the production of
commodities that dominates, and Marx’s analysis therefore begins with an
analysis of the commodity." 32
— Lenin.
"Where the
bourgeois economists saw a relation between things (the exchange of one
commodity for another) Marx revealed a relation between people. The
exchange of commodities expresses the tie between individual producers
through the market. Money signifies that this tie is becoming closer and
closer, inseparably binding the entire economic life of the individual
producers into one whole. Capital signifies a further development of
this tie: human labour power becomes a commodity. The wage-worker sells
his labour power to the owner of the land, factories and instruments of
labour. The worker spends one part of the day covering the cost of
maintaining himself and his family (wages), while the other part of the
day the worker toils without remuneration, creating for the capitalist
surplus value, the source of profit, the source of the wealth of the
capitalist class.
"The doctrine
of surplus value is the corner-stone of Marx’s economic theory."
33
This
discovery of surplus value, which according to Engels, was the second
important discovery of Marx, provided the exposition of the nature of
exploitation of the working class and laid bare the source of antagonism
between the proletariat and the bourgeoisie. It explained this
antagonism as the principal manifestation of the fundamental
contradiction of capitalist society; the contradiction between the
social character of production and the private character of ownership.
Marx
explained capitalist crises also as another manifestation of this
fundamental contradiction of capitalism. Impelled by the pursuit of
profit to throw more and more goods on to the market, the capitalists
endeavour to maintain their rate of profit by reducing expenditure on
wages, whether by cutting wage rates or employing fewer workers. But by
so doing they reduce the purchasing power of those who, together with
their families, make up the bulk of the population; and so they restrict
the market for their goods. This restriction of the market comes into
collision with the extension of production and resolves itself by means
of a crisis. "Commerce is at a standstill, the markets are glutted,
products accumulate, as multitudinous as they are unsaleable, hard cash
disappears, credit vanishes, factories are closed, the mass of workers
are in want of the means of subsistence, because they have produced too
much of the means of subsistence; bankruptcy follows upon bankruptcy,
execution upon execution...
"In these
crises, the contradiction between socialised production and capitalist
appropriation ends in a violent explosion. The circulation of
commodities is, for the time being, stopped. Money, the means of
circulation, becomes a hindrance to circulation. All the laws of
production and circulation of commodities are turned upside down. The
economic collision has reached its apogee. The mode of production is in
rebellion against the mode of exchange, the productive forces are in
rebellion against the mode of production which they have outgrown."
34
Thus these
repeated crises of capitalism can only be solved by resolving the
fundamental contradiction of capitalism. The force who can resolve this
contradiction–the proletariat–however has been created by capitalism
itself. The process through which the proletariat resolves this
contradiction is explained by Marx in the following oft-quoted passage
from Capital:
"As soon as
this process of transformation has sufficiently decomposed the old
society from top to bottom, as soon as the labourers are turned into
proletarians, their means of labour into capital, as soon as the
capitalist mode of production stands on its own feet, then the further
socialisation of labour and further transformation of the land and other
means of production into socially exploited and, therefore, common means
of production, as well as the further expropriation of private
proprietors, takes a new form. That which is now to be expropriated is
no longer the labourer working for himself, but the capitalist
exploiting many labourers. This expropriation is accomplished by the
action of the immanent laws of capitalistic production itself, by the
centralisation of capital. One capitalist always kills many. Hand in
hand with this centralisation, or this expropriation of many capitalists
by few, develop, on an ever-extending scale, the co-operative form of
the labour-process, the conscious technical application of science, the
methodical cultivation of the soil, the transformation of the
instruments of labour into instruments of labour only usable in common,
the economising of all means of production by their use as the means of
production of combined, socialised labour, the entanglement of all
peoples in the net of the world-market, and with this, the international
character of the capitalistic regime. Along with the constantly
diminishing number of the magnates of capital, who usurp and monopolise
all advantages of this process of transformation, grows the mass of
misery, oppression, slavery, degradation, exploitation; but with this
too grows the revolt of the working-class, a class always increasing in
numbers, and disciplined, united, organised by the very mechanism of the
process of capitalist production itself. The monopoly of capital becomes
a fetter upon the mode of production, which has sprung up and flourished
along with, and under it. Centralisation of the means of production and
socialisation of labour at last reach a point where they become
incompatible with their capitalist integument. This integument is burst
asunder. The knell of capitalist private property sounds. The
expropriators are expropriated." 35
Thus Marx
presents the historical tendency of capitalist accumulation–the essence
of the law of motion of capitalism.
Contribution of
Lenin
After the
death of Marx and Engels the political economy was further developed by
Lenin. Marx and Engels revealed the various aspects of capitalism when
it was at the stage of free-competition. They exposed the fundamental
contradiction of capitalism and pointed out its tendencies and future
direction. But it was not possible for them to analyse imperialism, the
highest stage of capitalism which was yet to be unfolded. Lenin further
developed the Marxist political economy and analysed the economic and
political essences of imperialism.
"The old
phase of capitalism came to a close towards the end of the nineteenth
and the beginning of the twentieth century, when Marx and Engels were
already dead. It is understandable the Marx and Engels could only guess
at the new conditions for the development of capitalism that arose as a
result of the new phase of capitalism which succeeded the old phase, as
a result of the imperialist, monopoly phase of development, when the
smooth evolution of capitalism was succeeded by spasmodic, cataclysmic
development of capitalism, when the unevenness of development and the
contradictions of capitalism became particularly pronounced, and when
the struggle for markets and fields of capital export, in the
circumstances of the extreme unevenness of development, made periodical
imperialist wars for periodic re-divisions of the world and of spheres
of influence inevitable.
"..Lenin..on
the basis of the fundamental principles in Capital,.. made a
substantiated Marxist analysis of imperialism as the last phase of
capitalism, and exposed its ulcers and the conditions of its inevitable
doom." 36 — Stalin.
Lenin’s
analysis of imperialism in his work ‘Imperialism the Highest Stage of
Capitalism’ can be summarised as follows:
"Imperialism
is capitalism in that stage of development in which the dominance of
monopolies and finance capital has established itself; in which the
export of capital has acquired pronounced importance; in which the
division of the world among the international trusts has begun; in which
the division of all territories of the globe among the biggest
capitalist powers has been completed." 37
"Imperialism
emerged as the development and direct continuation of the fundamental
characteristics of capitalism in general. But capitalism only became
capitalist imperialism at a definite and very high stage of its
development, when certain of its fundamental characteristics began to
change into their opposites, when the features of the epoch of
transition from capitalism to a higher social and economic system had
taken shape and revealed themselves all along the line. Economically,
the main thing in this process is the displacement of capitalist free
competition by capitalist monopoly. Free competition is the fundamental
characteristic of capitalism, and of commodity production generally;
monopoly is the exact opposite of free competition,...At the same time
the monopolies, which have grown out of free competition, do not
eliminate the latter, but exist over it and alongside of it, and thereby
give rise to a number of very acute, intense antagonisms, frictions and
conflicts. Monopoly is the transition from capitalism to a higher
system." 38 "...it follows
that we must define it as capitalism in transition, or, more precisely,
as moribund capitalism." 39
"Monopolies,
oligarchy, the striving for domination instead of striving for liberty,
the exploitation of an increasing number of small or weak nations by a
handful of the richest or most powerful nations — all these have given
birth to those distinctive characteristics of imperialism which compel
us to define it as parasitic or decaying capitalism."
40
"..uneven
development sums up, as it were, modern monopolist capitalism on a
world-wide scale. And proves that imperialist wars are absolutely
inevitable under such an economic system,." 41
"Imperialism
is the eve of the social revolution of the proletariat."
42
This analysis
of imperialism made by Lenin at the time of the World War I and the
October Revolution remains completely valid to this day.
Contribution of
Mao
In the course
of advancement of class struggle in a country like China Mao further
developed Marxist political economy. He analysed the law of motion of
semi-feudal semi-colonial economy of China, and explained characteristic
future of the monopoly capitalism– comprador in nature. This variety of
capitalism described by Mao as comprador bureaucrat capitalism, is new
contribution to political economy. It is linked with both feudalism and
imperialism. Mao expounded this semi-feudal, semi-colonial relation of
production in his celebrated article On New Democracy and called
upon the people to smash this relation of production to accomplish
peoples’ democratic revolution.
In the period
following World War II imperialism changed some of its methods of
exploitation and control and transferred power to the representatives of
monopoly capitalist and feudal classes – comprador in character. This
resulted in emergence of comprador bureaucrat capitalism in these
countries.. This was analysed by the CPC under Mao’s leadership:
"After World
War II the imperialists have certainly not given up colonialism, but
have merely adopted a new form, neo-colonialism. An important
characteristic of such neo-colonialism is that the imperialists have
been forced to change their old style of direct colonial rule in some
areas [in almost all areas today] and to adopt a new style of colonial
rule and exploitation by relying on the agents they have selected and
trained. The imperialists headed by the United States enslave or control
the colonial countries and countries which have already declared their
independence by organising military blocs, setting up military bases,
establishing ‘federations’ or ‘communities’, and fostering puppet
regimes. By means of economic ‘aid’ or other forms, they retain these
countries as markets for their goods, sources of raw material and
outlets for their export of capital, plunder the riches and suck the
blood of the people of these countries. Moreover, they use the United
Nations as an important tool for interfering in the internal affairs of
such countries and for subjecting them to military, economic and
cultural aggression. When they are unable to continue their rule over
these countries by ‘peaceful’ means, they engineer military coups
d’etat, carry out subversion or even resort to direct armed
intervention and aggression..
"This
neo-colonialism is a more pernicious and sinister form of colonialism."
43
When
revisionists captured the CPSU and restored capitalism in the Soviet
Union, the CPC under the guidance of Mao, basing itself on the
fundamental principles laid down in Lenin’s work, made an analysis of
the Soviet economy and society and its ruling class. It identified it as
social imperialism-socialism in name, imperialism in essence. It showed
that state monopoly capitalism was the economic basis of social
imperialism and that its ‘new international relations’ were nothing but
another name for neo-colonialism.
Economic Laws
of Socialism
Though Marx
and Engels, particularly in their works, Critique of the Gotha
Programme and Anti-Duhring, gave some views on the nature of
the functioning of the socialist economy, they however did not attempt
to analyse the economic laws of socialism. As Mao has said, "to know the
laws it is necessary to go through a process. The vanguard is no
exception." 44
Lenin, in the
period after the victory of the October Revolution, formulated some
guidelines for socialist construction. However he too did not live long
enough to ‘go through a process’, and devote attention to the question
of the objective laws of motion of socialism.
It was thus
left to Stalin to attempt to discover the economic laws of socialism. In
his Economic Problems of Socialism in the USSR he formulated the
basic economic law of socialism in the following manner:
"The
essential features and requirements of the basic economic law of
socialism might be formulated roughly in this way : the securing of the
maximum satisfaction of the constantly rising material and cultural
requirements of the whole of society through the continuous expansion
and perfection of socialist production on the basis of higher
techniques." 45
Mao pointed
out that Stalin’s understanding totally neglected the superstructure.
This error was corrected in the formulation of the basic economic law as
formulated by Mao given in the Shanghai Textbook drawn up during the
Cultural Revolution.
"The
objective aim of social production and the means to realise it express
the basic direction of development of social production and embody the
requirements of the economic laws of society. ..The aim of socialist
production is to satisfy the ever-increasing needs of the state and the
people. This aim is attained by means of propelling the development of
technology and production through revolution. Therefore, to sum up
briefly, the major characteristics and requirements of the fundamental
economic law of socialism are: to opportunely adjust and transform the
relations of production and the superstructure; to steadily raise the
level of technology; to develop socialist production with greater,
faster, better, and more economical results; to satisfy the
ever-increasing needs of the state and the people, and create the
material conditions for the ultimate elimination of classes and the
realisation of communism." 46
Thus through a process of social practice Mao further
developed it.
Another
objective economic law of socialism is the law of balanced
(proportionate) development of the national economy, or the law of
planned development. This law demands that the various mutually
dependent branches of production and enterprises maintain proper
proportions among themselves and supply what they produce to others to
satisfy each other’s needs. Otherwise, social production will be
obstructed or even disrupted.
Stalin
explains its basis and applicability in the following manner:
"The law of
balanced development of the national economy arose in contradistinction
to the law of competition and anarchy of production under capitalism. It
arose from the socialisation of the means of production, after the law
of competition and anarchy of production had lost its validity. It
became operative because a socialist economy can be conducted only on
the basis of the economic law of balanced development of the national
economy. That means that the law of balanced development of the national
economy makes it possible for our planning bodies to plan social
production correctly. But possibility must not be confused with
actuality. They are two different things. In order to turn the
possibility into actuality, it is necessary to study this economic law,
to master it, to learn to apply it with full understanding, and to
compile such plans as fully reflect the requirements of this law."
47
The law of
value which operates under capitalism also operates to certain extent
under socialism. This is because socialist production is, to a certain
extent, both direct social production and also commodity production.
"Wherever commodities and commodity production exist, there the law of
value must also exist." 48
"The
substance of the law of value is:
(1) the value
of commodities is determined by the socially necessary labour time
expended on their production;
(2) commodity
exchange must be based on the principle of equivalent values.
"What the law
of value embodies is bourgeois right, the basic content of which in
socialist society is not that much different from what it was in the old
society. But under different social economic systems, the law of value
will assume different forms and exert different effects on production.
..."
"As far as
the whole of socialist production is concerned, planning is primary and
price is secondary. That is to say, in the allocation of social labour
among various production sectors, what and how much to produce are
regulated by the state plan, which reflects the requirements of the
fundamental economic law of socialism and the law of planned development
of the national economy. The state plan plays a primary and decisive
role. The law of value is still useful, but it plays only a secondary
and supportive role." 49
These then
are the objective economic laws of socialism and their relation and
relative importance in the social processes and operation of socialist
society.
Lastly, what
is the objective historical tendency of the development of socialist
society? "The theory of socialist political economy advanced by
Marxism-Leninism-Maoism scientifically analyses the laws of motion of
the formation and development of socialist relations of production. It
also reveals the historical necessity of socialist society developing
into communist society...
"...In
socialist society, public ownership of the means of production has been
established, the labouring people have become masters of society and
enterprises, and Marxism has become the guiding thought of society. In
these respects, socialist society possesses elements of communism.
However, socialist society is merely the first stage of communist
society. ....."
"The
historical task of the proletariat in the socialist period is to
persevere in exercising all-round dictatorship over the bourgeoisie in
all spheres and at all stages of development of the revolution,
thoroughly defeat the bourgeoisie, abolish all classes and class
distinctions generally, abolish all the relations of production on which
they rest, abolish all the social relations that correspond to these
relations of production, revolutionise all the ideas that result from
these social relations, and propel socialist society toward a higher and
more mature communist society. Therefore, socialist society constitutes
the necessary preparation for communist society, and communist society
is, in turn, an objective trend of development of socialist society."
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