Political Economy of Socialism as a Phenomenon of Intellectual History

1. Political Economy of Socialism as a Phenomenon of Intellectual History Oleg Ananyin

2. Milton Friedman. Old wine in new bottles(Economic Journal, 1991, vol. 101) “…[T]he subjects that were dealt with in the 1st and the 99th volume of the [Economic] Journal – labour, money, doctrinal history, and socialism – will in one form or another be represented in the 199th…”

3. What was it: Political economy of socialism(PES)? • What is of interest is an attempt to grasp a new phenomenon: planned, i.e. non-spontaneous & non-capitalist economy Utopia? Propaganda? A new sub-discipline of economic science?

4. How to approach? Is not a theory of non-spontaneous economy an oxymoron? Should not it rather be a kind of social engineering? Or it is a deviant form of one “right” economic system – capitalist market economy?

5. Sources & discources Ideological discourse: Long view of Marxian predictions Pragmatic discourse: Short view of current experiences Political discourse: image construction After-Purges memory

6. Read between the lines! Theoretical discussions as a shelter for debates on economic policy Theoretical battles in the guise of methodological discussions Methodology as a means for clearing the field from dogmas

7. Key centres – key figures Moscow State University Institute of Economics, Academy of Sciences TSEMI, Academy of Sciences Yakov Kronrod Nikolay Tsagolov Nikolay Fedorenko

8. Decipheringownership debates I.Stalin: “We are in charge, and power is ours. Say it simply…” (from a transcript of the talk with a group of Soviet economists in 1941) Assumptions: socialist economy –“a vast workshop” legal view of ownership “right” persons take “right” decisions

9. Ownership debates as a long intellectual journey of overcoming naïve view - I Lenin’s distinction btw “nationalization” & “socialization” (1918) Search for a niche within official framework distinction btw state property & “operative management of state property”[Venediktov,1948] distinction btw “right of appropriation-in-disposal” & “right of appropriation-in-use” [Kronrod, 1966]

10. Ownership debates as a long intellectual journey of overcoming naïve view - II Doctrinal deficiency of legal view of ownership within economic discourse: law belongs to “superstructure” determined by objective economic “structure” “From the economic point of view ownership …lives inside all production relations, and there is no other way to grasp it than through the study of the whole set of production relations” [ Tsagolov, 1973] Return to motivational role of ownership [TSEMI, Sukhotin, 1983] The concept of “power-ownership” in allusive debates on “Asian mode of production”

11. Commodity production in PES The fate of commodity production – a key issue of PES. Commodity was in Marx’s theory not just a thing for sell, but a short-hand for market economy as a system functioning through spontaneous uncoordinated and therefore wasteful interaction of economic agents. Socialism was conceived as its opposite, i.e. a consciously organized planned economy free from exploitation, crises and major disproportions

12. Two perspectives V. Lenin (1921): “… the manufactured goods made by socialist factories and exchanged for the foodstuffs produced by the peasants are not commodities in the politico-economic sense of the word; at any rate, they are not only commodities, they are no longer commodities, they are ceasing to be commodities” E.Preobrazhensky: theory of two regulators: commodity production based on “the law of value” has the same nature in capitalism and during the transition period, and the construction of socialism consisted, among other changes, in the overall extrusion of this market-based system

13. Decipheringcommodity sui generis-I Evolving official attitude to the “law of value” & commodity-money relations under Stalin: from a constructivist position that “law of value… functions in a transformed manner” (1943/1944) to a milder formula that “laws cannot be "transformed", although “the sphere of action of this or that economic law may be restricted” [1951] “Law of value has not been overcome yet. It is not true that we command prices; we want to command, but still cannot. To do so we need enormous reserves, abundance of commodities and only then will we dictate prices. So far illegal market exists, kolkhoz market exists, and so do market prices” (Stalin: from a transcript of the talk with a group of Soviet economists in 1941)

14. Decipheringcommodity sui generis-II Rhetorical formula in the post-Stalin era: “commodity production of special kind”, or “sui generis (as a “common umbrella”) Radicals in mid-1960s: “the plan has necessarily recon the sales conditions of the social product, conjuncture, and market volume”(Lisichkin, 1966) Dual models of leading ideologues: Kronrod on two forms of “economic ties”: direct non-equivalent and indirect equivalent, or commodity ties Tsagolov: “if exchange proportions… do stimulate production of the exchanged products…, and the producers can react by altering the structure of their production, then commodity relations are real” [1971]

15. Decipheringcommodity sui generis-III S.Shatalin and his co-authors (TSEMI) wrote in 1975: “Disaggregation of [planned] indicators, their adaptation to concrete conditions… implies… [that] production units (as well as consumers) can define concrete structure of their production and prices by mutual agreement… without direct connection with optimal solution at a national level… That is where we find commodity-money relations…, here the formation of value proportions takes place in a certain sense spontaneously… and the law of value does function.”

16. Were PES controversies just “language games”? Lisichkin’s article of 1966 caused sharp clashes at the level of the Central Committee of the ruling party Tsagolov’s several pages explaining why he replaced in his textbook the term “commodity production” with that of “relations of commodity production”, were accompanied with a political campaign – with the allies in the apparatus of the ruling party – aiming to replace the management team of the rival institution with his own supporters Struggle around Kronrod’sjournal article against mathematical economics involved Gosplan Chairman, party officials from the Central committee, editor-in-chief of the leading party newspaper, influential academicians etc.

17. Hidden dimension of PES After Stalin’s death political leadership was never consolidated to the extent achieved in the 1930s after the Great Purge. There were different streams, sub-streams & interest groups. They created demand for ideas & programs, thus providing competing economic schools with opportunities of supplying their projects. Departments of the Central Committee, Gosplan& influential branch ministries, Moscow & regional authorities– all such institutions had their projections & preferences in the area of economicknowledge Leading economists not only had their sponsors but actively promoted their representatives into the party apparatus & government positions. For many of them it was their sincere struggle for what they believed in & for what they felt professionally responsible

18. Thanks for attention!