Until Khrushchev, the Soviet Union took the struggle to restrict the role of the market seriously. In the late 1940s and early 1950s, before the postwar recovery from Nazi invasion was complete, a theoretical discussion with big practical implications arose among Soviet leaders and economists. It was prompted by the positions of Gosplan chief, Nicolai Voznesensky, who argued for broader use of market relations, and by preparations for a long-overdue Soviet textbook on political economy. Stalin, summing up the various debates, took the position that the laws of socialist construction were objective, that the actions of people could not transform the economic laws of socialism, but human action could restrict the sphere of operation of those economic laws. He held that commodity production existed under socialism “for a certain period, without leading to capitalism, bearing in mind that in our country commodity production is not so boundless and all-embracing as it is under capitalist conditions, being confined within strict bounds.” He opposed the selling of the machine tractor stations to the collective farms for various practical reasons and because it would expand the sphere of commodity production, a step backward from the already attained level of the industrialization of agriculture. In his view, commodity production in the USSR economy was confined to the sphere of personal consumption, and, pointing to the potential development of “product exchanges,” he declared the rudiments of a non-commodity economy existed in 1952 and could be developed.631
The Soviet debate in 1952 was a fight over long-term socialist strategy. Stalin’s view on commodity-money relations and the law of value under socialism signified this: If the nature of a commodity under socialism can be “transformed,” in other words, if there can be “socialist commodities,” then some in the CPSU leadership could logically argue for wholeheartedly expanding markets under socialism, which meant giving up the policy of keeping markets within strict bounds as socialism developed. Stalin rejected this path.
Then came Khrushchev. After 1953, a shift to pro-market political thinking occurred, and doctrinal shifts632 in economic theory ratified them. An obvious conundrum arose, however. Those favoring expanded use of market relations in socialism discarded a major element of Marxist theory, namely that the admittedly distant historical stage after socialism, full communism, would have no market. The founders of Marxism forecast that full communism meant no market. How can maximum use of the market in the socialist stage be followed immediately by its complete absence in the next stage? One example of the evasion of this problem is in a 1969 work Categories and Laws of the Political Economy of Communism, by A.M. Rumyantsev, an economist who had been close to Khrushchev. He buried in a long paragraph the notion that the use of “commodity-money relations” (markets) “accelerates the advance to full communism,” and that in some unexplained way, socialism “grows over into full communism,” while admitting “widespread theoretical discussion” of this “most complex problem” of the political economy of socialism in its “modern stage of development.”633 The pro-market turn in theory persisted long after Khrushchev. A late-Brezhnev-era textbook, Political Economy: Socialism (1977) stated in little more than one paragraph that commodity-money relations would “wither away” in the communist stage. How this withering would occur, the text leaves unexplained. Anders Aslund634 noted that in the 1960s there were two main camps of Soviet economists, the “commoditeers,” and the “non-commoditeers,” in other words, those for or against the expanded use of “commodity-money relations,” that is, markets. At least a decade before 1985, a number of Soviet research institutes and other corners of academia were occupied by social scientists who found Paul Samuelson more beguiling than Karl Marx.635 One of these was Tatyana Zaslavskaya,636 whose mentor was V. G. Venzher, the economist whose idea to sell the machine tractor stations to the collective farms was rejected by Stalin.637 Zaslavskaya was an early influence on the Gorbachev pro-market reforms and his supporter almost to the end. There was remarkable continuity in the two competing streams of Soviet economic thought.
Yuri Andropov acknowledged that his path of economic reform still had unsolved problems of theory and practice. He complained, for example, of the lack of an adequate theory of how to speed up labor productivity growth and a clear method to set prices under central planning.638 He considered his approach a better way forward than the Bukharinist ideology “which leans toward anarcho-syndicalism, the splitting of society into rival corporations independent of each other.” American political scientist Michael Parenti vividly described the many unsolved problems of designing incentives for innovation in Soviet industry. Innovation sometimes threatened the careers of managers and often failed to reward them for taking risks. Pressure to fulfill the plan’s production goals created disincentives for experimentation and even for the introduction of better technology, while sometimes creating incentives to cut quality. Well-run factories that met or exceeded the plan were sometimes punished with greater workloads, and so forth.639 These were stubborn, difficult problems of planning and management to be sure, but hardly insoluble.
The Soviet counterrevolution has implications for the remaining socialist states. Since 1991, the four surviving socialist states,640 China, Cuba, Vietnam, and North Korea, have been under imperialist pressure to make concessions to the market, to submit to capitalist world economic institutions (WTO, IMF, World Bank), and to create special zones for Western corporate investment within their borders, on penalty of being refused Western loans, access to Western markets, and technology transfers. All four countries have had to maneuver in conditions of economic warfare spearheaded by the U.S. To a large degree because there is a gun held to their heads, these states in varying degrees have made concessions to the market and private enterprise. This poses a real danger, for a key lesson of the Soviet collapse is that market relations must be held to a minimum.
Agriculture may be the great exception to the general rule that in the first stage of socialism, the socialist state works to restrict the market over time. Unlike the Soviet Union, which did not have the luxury of moving slowly toward socialist relations in the countryside, other socialist states, after rushing to collectivize agriculture, have pulled back. In China, after the reforms re-privatized agriculture in 1978, well before the end of the USSR, farm output vastly increased.641 Later reforms in Chinese foreign trade and industry speeded up growth more moderately than in agriculture, and with harmful social, political and economic effects.642 In socialist Cuba, agricultural reforms came about in quite different circumstances—the end of Soviet trade and subsidies in 1989-91. This required drastic measures to achieve the self-sufficiency of the island and adapt to the grave crisis. In one measure to increase output, workers at state farms became co-operative owners. Since the reform, output has increased substantially.643 In today’s Cuba too, some interpret the Special Period not as a forced, perilous, emergency backward step, but as a welcome, sound, long-term development course. To their credit the top Cuban economic and planning authorities, although willing to allow free debate, seem fully cognizant of the historic parallels.644