Section 5. The most recent socialist doctrines and the problem of economic calculation.
Since recent events helped socialist parties to obtain power in Russia, Hungary, Germany, Austria,
and have thus made the execution of a socialist nationalization program a topical issue,
To you, Marxist writers have themselves begun to deal more closely with the problems of
the regulation of the socialist commonwealth.
But even now, they still cautiously avoid the crucial question, leaving it to be tackled
by the despised utopians.
They themselves prefer to confine their attention to what is to be done in the immediate future.
They are forever drawing up programs of the path to socialism and not of socialism itself.
The only possible conclusion from all these writings is that they are not even conscious
of the larger problem of economic calculation in a socialist society.
To Otto Bauer, the nationalization of the banks appears the final and decisive step
in the carrying through of the Socialist Nationalization Program.
If all the banks are nationalized and amalgamated into a single central bank, then its administrative
board becomes the supreme economic authority, the chief administrative organ of the whole
economy.
Only by nationalization of the banks does society obtain the power to regulate its labor
according to a plan and to distribute its resources rationally among the various branches
and the use of production so as to adapt them to the nation's needs.
Bauer is not discussing the monetary arrangements which will prevail in the socialist commonwealth
after the completion of the nationalization of the banks.
Like other Marxists, he is trying to show how simply and obviously the future socialist order of society
will evolve from the conditions prevailing in a developed capitalist economy.
It suffices to transfer to the nation's representatives the power now exercised by bank shareholders through the administrative boards they elect, in order to socialize the banks, and thus to lay the last brick on the edifice of socialism.
Bauer leaves his readers completely ignorant of the fact that the nature of the banks is entirely changed in the process of nationalization and amalgamation into one central bank.
Once the banks merge into a single bank, their essence is wholly transformed. They are then in a position to issue credit without any limitation. In this fashion, the monetary system, as we know it today, disappears of itself.
When in addition the single central bank is nationalized in a society, which is otherwise already completely socialized, market dealings disappear, and all exchange transactions are abolished.
At the same time, the bank ceases to be a bank.
Its specific functions are extinguished, for there is no longer any place for it in such a society.
It may be that the name bank is retained, that the Supreme Economic Council of the socialist community is called the Board of Directors of the Bank,
and that they hold their meetings in a building formerly occupied by a bank, but it is no longer a bank.
Ludwig, it fulfills none of those functions which a bank fulfills in an economic system
resting on the private ownership of the means of production and the use of a general medium
of exchange, money.
It no longer distributes any credit, for a socialist society makes credit of necessity
impossible.
Bauer himself does not tell us what a bank is, but he begins his chapter on the nationalization
of the Banks with the sentence, All disposable capital flows into a common pool in the banks.
As a Marxist, must he not raise the question of what the banks' activities will be after
the abolition of capitalism?
All other writers who have grappled with the problems of the organization of the socialist
commonwealth are guilty of similar confusions.
They do not realize that the bases of economic calculation are removed by the exclusion of
of Exchange and the Pricing Mechanism, and that something must be substituted in its place if all economy is not to be abolished and a hopeless chaos is not to result.
People believe that socialist institutions might evolve without further ado from those of a capitalist economy.
This is not at all the case, and it becomes all the more grotesque when we talk of banks, bank management, etc. in a socialist commonwealth.
Reference to the conditions that have developed in Russia and Hungary under Soviet rule proves nothing.
What we have there is nothing but a picture of the destruction of an existing order of social production, for which a closed peasant household economy has been substituted.
All branches of production, depending on social division of labor, are in a state of entire dissolution.
What is happening under the rule of Lenin and Trotsky is merely destruction and annihilation,
Question. Whether, as the liberals hold, socialism must inevitably draw these consequences in
its train, or whether, as the socialists retort, this is only a result of the fact that the
Soviet republic is attacked from without, is a question of no interest to us in this
context. All that has to be established is the fact that the Soviet socialist commonwealth
has not even begun to discuss the problem of economic calculation, nor has it any cause
to do so, for where things are still produced for the market in Soviet Russia in spite of
governmental prohibitions, they are valued in terms of money, for there exists to that
extent private ownership of the means of production, and goods are sold against money.
Even the government cannot deny the necessity, which it confirms by increasing the amount
of money in circulation, of retaining a monetary system for at least the transition period.
In the dictator's deliberations, there ever recurs the thought that the immediate and most pressing task of Russian communism is the organization of bookkeeping and control of those concerns in which the capitalists have already been expropriated and of all other economic concerns.
Even so, Lenin is far from realizing that an entirely new problem is here involved, which it is impossible to solve with the conceptual instruments of bourgeois culture.
Like a real politician, he does not bother with issues beyond his nose.
He still finds himself surrounded by monetary transactions, and does not notice that with progressive socialization, money also necessarily loses its function as the medium of exchange in general use, to the extent that private property and with it exchange disappear.
The implication of Lenin's reflections is that he would like to reintroduce into Soviet business bourgeois bookkeeping carried on on a monetary basis.
Basis. Therefore, he also desires to restore bourgeois experts to a state of grace. For
the rest, Lenin is as little aware as Bauer of the fact that in a socialist commonwealth,
the functions of the bank are unthinkable in their existing sense. He wishes to go farther
with the nationalization of the banks and to proceed to a transformation of the banks
into the nodal point of social bookkeeping under socialism. Lenin's ideas on the socialist
The socialist state, he says, can only arise as a net of producing and consuming communes, which conscientiously record their production and consumption, go about their labor economically, uninterruptedly raise their labor productivity, and thus attain the possibility of lowering the working day to seven or six hours or even lower.
Every factor, every village, appears as a production and consumption commune having the right and obligation to apply the general Soviet legislation in its own way, not in the sense of its violation, but in the sense of the variety of its forms of realization,
and to solve, in its own way, the problems of calculating the production and distribution of products.
The chief communes must and will serve the most backward ones as educators, teachers, and stimulating leaders.
The successes of the chief communes must be broadcast in all their details in order to provide a good example.
The communes showing good business results should be immediately rewarded by a curtailment of the working day and with an increase in wages,
and by allowing more attention to be paid to cultural and aesthetic goods and values.
We can infer that Lenin's ideal is a state of society in which the means of production are not the property of a few districts, municipalities,
According to Lenin the Theorist, every large agricultural and industrial concern is a member of the great commonwealth of labor.
Those who are active in this commonwealth have the right of self-government.
They exercise a profound influence on the direction of production and again on the distribution of the goods they are assigned for consumption.
Still, labor is the property of the whole society, and as its product belongs to society also, it therefore disposes of its distribution.
How, we must now ask, is calculation in the economy carried on in a socialist commonwealth which is so organized?
Lenin gives us a most inadequate answer by referring us back to statistics.
We must bring statistics to the masses, make it popular, so that the active population will gradually learn by themselves to understand and realize how much and what kind of work must be done, how much and what kind of recreation should be taken,
so that the comparison of the economy's industrial results in the case of individual communes becomes the object of general interest and education.
From these scanty allusions, it is impossible to infer what Lenin understands by statistics, and whether he is thinking of monetary or innatura computation.
In any case, we must refer back to what we have said about the impossibility of learning the money prices of production goods in a socialist commonwealth, and about the difficulties standing in the way of innatura valuation.
Statistics would only be applicable to economic calculation if it could go beyond the innatura calculation whose ill-suitedness for this purpose we have demonstrated.
It is naturally impossible where no exchange relations are formed between goods in the process of trade.