The economic basis of socialist society is the socialist system of national economy and socialist ownership of the means of production, which have been consolidated by elimination of the capitalist economic system, the abolition of private ownership of the means of production and the eradication of exploitation of man by man.
Exposing the concoctions of the apologists of capitalism who asserted that the programme of scientific Communism was a programme for abolishing property altogether, Marx and Engels wrote: “The distinguishing feature of Communism is not the abolition of property generally but the abolition of bourgeois property." (Marx and Engels, The Communist Manifesto; Marx and Engels, Selected Works,1948, vol. I, p. 21.) No society is conceivable without the predominance of a historically determined form of property. In eliminating the private ownership of the means of production, the proletarian revolution sets up socialist ownership of the means of production in its place.
In socialist society the means of production have ceased to be capital, that is, to be a means of exploitation. In socialist society there are no longer classes with a monopoly of property in the means of production arid classes deprived of property in the means of production. In the conditions of socialism the means of production are social property. The main elements in the production process-labour-power and the means of production—are here united on a new basis, that of large-scale socialist production in both town and country. Since the means of production have ceased to be capital, there is no longer a division of accumulated labour into constant and variable capital under socialism. The whole mass of accumulated labour in society, that is, the whole mass of the means of production and the means of consumption, at the disposal of society for further production, serves the interests of the people and cannot provide a basis for exploitation. “In bourgeois society, living labour is but a means to increase accumulated labour. In communist society, accumulated labour is but a means to widen, to enrich, to promote the existence of the labourer." (Marx and Engels, The Communist Manifesto; Marx and Engels, Selected Works, 1950, vol. I, p. 22.).
Under socialism, social ownership is completely predominant in all spheres of the national economy. In 1950 in the U.S.S.R., socialist property embraced 99.4 per cent of all the means of production in use in the country. With the consolidation of the undivided predominance of social property, the false theory of bourgeois ideologists about the eternity and immutability of private capitalist property has been completely discredited.
The conversion of the means of production into social property, and the emancipation of the workers from all forms of exploitation, signified the consolidation of the new socialist system of national economy.
The socialist system national economy differs fundamentally from the capitalist economic system and has decisive advantages over it.
(1) In the socialist system of national economy the means of production are social property, that is, they belong to the working people in the person of either the socialist State or of the collective farms and other co-operative unions. Consequently, the products of labour also belong to the working people. In the capitalist economic system the means of production are the private property of the capitalists and landowners and consequently the products of labour also belong to the capitalists and landowners.
(2) The socialist system of national economy means that the exploitation of man by man has been abolished, and that the purpose of production is the maximum satisfaction of the growing material and cultural needs of the whole of society. Capitalist production is for the purpose of securing the maximum capitalist profit through the exploitation, ruin and enslavement of the working people.
(3) Socialist production develops in a planned way and without interruption. The steady rise in the living standards and purchasing power of the working people are a stimulus to increased production and a secure guarantee of freedom from crises of overproduction and unemployment. Capitalist production develops without plan. The growth of production runs up against the proletarian condition of the working people and the relative reduction of their purchasing power. This inevitably brings crises of overproduction, growing unemployment and impoverishment of the masses.
(4) In socialist society each worker receives material wealth according to the quantity and quality of his labour. The distribution of the national income serves to raise the welfare of the working people, extend socialist production in town and country and increase the social wealth. Under capitalism, distribution of the national income takes place for the purpose of enriching the exploiting classes and their numerous parasitic menials.
(5) In the socialist system, State power belongs to the working people of town and country. Workers, peasants and intelligentsia are active builders of communism, working for themselves and for the good of the whole of society. The capitalist economic system means that power in society belongs to the capitalists, who use this power to maintain a state of affairs which is satisfactory and advantageous to the propertied classes, while the proletariat and the working masses of the peasantry are exploited classes, compelled to work for the capitalists and landowners.
Social property is the foundation of the socialist system, the source of wealth and power of the Motherland, the means to a rich and cultured life for all the working people. It is sacred and inviolable. The Constitution of the U.S.S.R. obliges every citizen in Soviet society to safeguard and strengthen social property. Persons attacking socialist property are enemies of the people and are punished by law.
In the first phase of communism, social or socialist property exists in two forms; (1) State property and (2) co-operative and collective farm property. State socialist property is the property of the whole of the Soviet people, vested in the Socialist State of workers and peasants. Co-operative and collective farm socialist property is the property of individual collective farms and co-operative unions.
To the two forms of socialist property there correspond two forms of socialist economy: (1) State enterprise (factories, mills, State farms, M.T.S., etc.) and (2) co-operative (collective) economy (collective farms, industrial artels, enterprises of the consumer co-operatives).
The existence of the two forms of socialist property is the result of the historical conditions in which the proletarian revolution and the construction of communism take place. Having won State power, the working class finds in existence different forms of private property which have evolved in the course of history: on the one hand, large-scale capitalist property based on the exploitation of hired labour and, on the other, small-scale private property of the peasants, artisans and handicraftsmen which is based on their personal labour. In the course of the socialist revolution large-scale capitalist property is expropriated and passes into the hands of the socialist State. Hence there arises State (public) socialist property. At the same time the programme of scientific communism rejects the expropriation of the peasants, artisans, and handicraftsmen as a hostile and criminal method. Small-scale and middling commodity producers voluntarily combine in producer co-operatives, that is, collective farms and industrial co-operatives. The means of production that they own are socialised on co-operative lines. Hence there arises co-operative and collective farm property.
Thus the two forms of social property are an objective necessity and reflect the differences in the paths along which the working class and the peasantry move towards socialism and, subsequently, towards communism.
“Each of the two classes which exist in the U.S.S.R. is building socialism, and enters into the system of socialist economy. But while they form part of the one general system of socialist economy, the working class is linked by its labour with State socialist property (the property of the whole people), while the collective farm peasantry is linked with cooperative and collective farm property belonging to the individual collective farms and collective co-operative unions. These links with different forms of socialist property are what determine, in the first place, the differences in the position of these classes. They also determine certain differences in their future path of development.
Common to their development is the fact that both these classes are developing towards communism." (V. Molotov, The Constitution of Socialism. Articles and Speeches, 1937, Russian edition, p. 267.)
State property in the U.S.S.R, consists of the land, mineral wealth, waters, forests, mills, factories, pits, mines, rail, water and air transport, banks, communications, large agricultural enterprises organised by the State (State farms, machine and tractor stations, etc.), trade and purchasing enterprises belonging to the State, and also municipal enterprises and the main house property in towns and industrial centres.
The territory of the Soviet Union occupies one-sixth of the world’s surface—8.7 million square miles. More than one-quarter of this territory—over 1,490 million acres—is agricultural land; the area covered by forests is 1,740 million acres.
The U.S.S.R. is the richest country in the world in its deposits of useful minerals. The socialist economic system has brought to life the wealth which remained untouched in tsarist Russia. The U.S.S.R. holds first place in the world in its deposits of iron ore, oil, potassium salts, apatites, peat and a number of other important mineral deposits, and second place in coal deposits.
Two hundred thousand enterprises in State industry, the entire railway network, water transport installations and State enterprises in agriculture are national property. So are over 5,000 State farms, about 9,000 machine and tractor stations and thousands of subsidiary agricultural undertakings; likewise many thousands of State trading enterprises. Numerous scientific and cultural institutions also belong to the State.
Thanks to the labour of the Soviet people, the State socialist property brought into being as a result of the nationalisation of the factories, mills, transport, etc., has multiplied on a huge scale during the years of socialist construction. Thus the basic productive stocks of industry had increased 24-fold by 1954, compared with 1913.
State socialist property differs fundamentally from State capitalist property. When one enterprise or another, or even a whole branch of the economy, becomes the property of the bourgeois State, its social nature is unaltered. The modern bourgeois State represents the interests of monopoly capital and is an instrument of coercion in its hands, with which it protects the oppression of the working majority by the propertied minority. Accordingly, State capitalist enterprises, too, are based on the exploitation of the working people and stand opposed to the people, as an alien and oppressive force.
In socialist society power is in the hands of the working people, headed by the working class. They own the means of production. The labour-power used in socialist enterprises is not a commodity, since the working people who own the means of production, cannot sell their labour-power to themselves. Accordingly, every possibility of the exploitation of man by man is ruled out in socialist enterprises.
State property is the predominant form of property in socialist society, accounting for about 91 per cent of the total productive stocks of the U.S.S.R. Thus the bulk of the wealth of the Soviet Union and the most important sources of improvement in the living standards and cultural level of the working people, are the property of the whole people.
Co-operative and collective farm property in the U.S.S.R., consists of socially-owned enterprises in the collective farms and co-operative organisations, their livestock and implements, their output and also their socially-owned buildings. The land which is cultivated by the collective farms and other co-operative enterprises is the property of the whole people. The finest modern techniques which are concentrated in the machine and tractor stations, and are used for all the main works in the collective farms, are also the property of the whole people.
Co-operative and collective farm property consists, first and foremost, of the 89,000 collective farms: the collective farm buildings, hundreds of thousands of cattle-breeding sections, socialised draught cattle, agricultural implements, a large network of collective farm cultural and living amenities (clubs, reading-rooms creches rural laboratories, etc,), In the. course of socialist construction, socially-owned collective farm property has been enormously multiplied. Between 1940 and 1954 the indivisible funds of the collective farms increased 2.8fold.
Co-operative industrial production in socialist society takes the form of industrial artels. Industrial co-operation is mainly called upon to develop the production of mass consumer goods, using for this purpose local raw material resources first and foremost. The means of production used by industrial co-operatives, and their output, are the property of the industrial artel. Industrial co-operatives of all types in the U.S.S.R. numbered at the end of 1954 more than 14000 artels engaging in industrial production.
The co-operative form of enterprise in trade consists of consumer societies which mainly cover the rural population. The property of the 23,000 consumer co-operative societies include an extensive network of shops, stores and warehouses.
The all-round strengthening and development of State co-operative and collective farm property is a most important prerequisite for the further growth of the entire national economy and the gradual transition of Soviet society from socialism to communism.
State, co-operative and collective farm forms of property, like State enterprises and collective farms themselves are of a kindred social nature. Common to State enterprises and collective farms is the fact that both: (1) are based on socialist, socialised means of production and collective labour; (2) rule out the possibility of the exploitation of man by man, (3) conduct their economy in a planned way, for the satisfaction of the growing needs of the working people, (4) follow the socialist principle of distribution according to work.
At the same time there are certain differences between State and cooperative or collective farm property, just as there are between State and cooperative (collective) enterprises.
First, in State enterprises socialist relations of production predominate in their most mature and consistent form. State property is the property of the whole people; in State enterprises all the means. of production without exception are socialised. Co-operative and collective farm property is group property, the property of separate collectives or unions of working people (the agricultural artel, consumer society, or industrial artel); in the collective farms (in their artel form) the main means of production of the co-operating peasants have been voluntarily socialised; a certain part of the means of production, in accordance with the Statute of the agricultural artel, is not socialised but remains the personal property of the collective farm household (the personal subsidiary economy of the collective farmer.)
Secondly, the output of State enterprises is the property of the Socialist State, and is sold as laid down by, and at prices fixed by, State bodies. Collective farm produce is the property of each collective farm. One part goes to meet the farm’s obligations to the State, in the form of produce sold at fixed State prices and of payments in kind for the work carried out on the collective farm by the machine and tractor station. All remaining produce remains at the disposal of the collective farm, and is used to build up the prescribed, socially-owned collective farm funds, and for distribution among the members according to labour-days earned. The collective farms sell a part of their produce at purchase prices which exceed the State fixed prices, or at market prices in collective farm trade.1
Thirdly, in the State enterprises, which are the property of the whole people, the share of the social product going to the worker for his personal consumption is paid out in the form of wages. The State lays down in advance fixed wage-scales for a unit of product or of working time. Since the collective farmer is a member of an artel, which is group property, he receives the share of the income due to him in the form of payment for labour-days, out of the funds of his collective farm. The size of this income depends on both the degree of participation of the collective farmer in social labour, which is expressed in the number of labour-days which he has worked, and also on the level of labour productivity and degree of development of the socially-owned economy of the collective farm, which is expressed in the size of payment for each labour-day. The better the collective farm works as a whole, the higher the harvest yield and the productivity of the livestock, the higher is the income of each collective farmer. Wages are paid to the workman in a money form. The incomes of the artel are distributed among the collective farmers both in money and in kind (produce). While the workman’s sole source of income is his labour in a socialist enterprise, the main source of income of the collective farmer is his labour in the socially-owned economy of the collective farm, and a supplementary source is his labour in the personal subsidiary plot of his household. The collective farmer sells on the market a part of the produce which he has received for his labour-days, and from his personal subsidiary plot.
Fourthly, the Socialist State directly guides the enterprises belonging to it, administering them through its representatives—the directors of enterprises, who are appointed and removed by the appropriate State institutions. The State institutions, relying on the creative initiative of the workers. engaged in production, plan directly the entire productive activity of these enterprises, and regulate the main aspects of socialist organisation of labour in them. In the collective farms, in accordance with their co-operative nature, their entire business is administered by the highest body of the agricultural artel—the general meeting of the collective farmers, and the management and collective farm chairman elected by them. The production and financial plans of the artel, its rules, standards of output and rates of reward, and the distribution of revenues are laid down by the collective farmers themselves, on the basis of the Statute of the agricultural artel and guided by the existing laws, planning targets and directives of the Socialist State.
1 That is, the collective farms can dispose of their surplus produce, after they have sold what is due to the State at “fixed prices", paid the M.T.S. in kind for their work, and allocated the balance either to the common funds or for distribution among the members, in different ways: (i) further voluntary sales to the State, but at much higher prices than those paid for the “fixed" deliveries (ii) at “collective farm markets" in the towns where they themselves fix the price at “what the market will stand"—Editor, English edition.
The differences between State enterprises and co-operative (collective) enterprises are not differences of a fundamental kind. They are differences of two forms of economy within the framework of socialist relations of production. State property is the highest form of socialist property, and the State form of production is the highest form of socialist production.
Enterprises based wholly on State property are of a consistently socialist type. Lenin defined them as enterprises in which “the means of production, the land on which the enterprises are situated, and the enterprises as a whole, belong to the State". (Lenin, “On Co-operation", Selected Works, English edition, 1950, vol. II, Part 2, p. 720.) In State enterprises the means of production, the labour of the manual and clerical workers and the output they produce are all socialised on a nation-wide scale. The State form of production embraces the (leading branch of the national economy—socialist industry. The large “factories" producing agricultural products—the State farms—are national property. The land and its .main instruments of production—the tractors, combines and other agricultural machinery in the machine and tractor stations and State farms-are the property of the State. The leading and determining role in the entire national economy belongs to State property, as the highest form of socialist property.
Social ownership under socialism extends to the means of production and the finished products. A part of these products subsequently becomes means of production and remains social property. Another part, consisting of objects of consumption, is distributed among the workers in accordance with the quantity and quality of the labour of each, and becomes the personal property of the working people.
In The Communist Manifesto Marx and Engels pointed out that communism deprives nobody of the opportunity of personally acquiring a definite share of the product of social labour. Communism only abolishes the despicable character of acquisition characteristic of capitalism, whereby the worker only exists for the purpose of increasing capital.
Outlining the foundations of the future socialist society, Engels wrote in Anti-Duhring that
“social ownership extends to the land and the other means of production, and private ownership to the products, that is, the articles of consumption." (Engels, Anti-Duhring, English edition, 1954, p. 181.)
With the abolition of the capitalist mode of production, those economic laws of capitalism also lose their validity which limit the personal property and personal consumption of the masses of the people to the minimum of essential products required for the maintenance and reproduction of labour-power. Far from abolishing personal ownership of objects of consumption, socialism provides the only real safeguard for the ever fuller satisfaction of the personal needs of all members of society.
The right of the working people in socialist society to personal property extends to their incomes from work and their savings, their houses and domestic plots, domestic and household goods, and objects of personal use and comfort.
The property of the collective farm household is a special form of personal property in conditions of socialism. In accordance with the Statute of the agricultural artel, each collective farm household has as its personal property its subsidiary economy, its household allotment, its house, cattle, poultry and small agricultural equipment.
Labour alone is the source of personal property in the socialist epoch. With the complete predominance of socialist relations of production, personal property cannot be converted into capital, that is, used as a means of exploitation. The right to personal property, as also the right to inherit personal property, is safeguarded by the Constitution of the U.S.S.R.
In socialist society personal property is indissolubly linked with its basis, social property. With increasing social property and national wealth, ever larger quantities of products are available for the satisfaction of the personal needs of the working people of socialist society. Socialism ensures the harmonious combination of the personal interests of individual members with the interests of society as a whole.
By their very nature, socialist relations of production differ fundamentally from the production relations of capitalism and of other social systems based on private ownership of the means of production.
Socialist relations of production are characterised by: (1) complete predominance of social ownership of the means of production, existing in two forms—State ownership and co-operative collective farm ownership; (2) emancipation of the working people from exploitation and the establishment of comradely co-operation and socialist mutual aid: (3) distribution of the products of labour in the interests of the working people according to the principle: to each according to his labour.
Socialist ownership of the means of production gives rise to mutual relations between people engaged in the production process which are quite different from those obtaining under capitalism. Private property in the means of production inevitably divides people, gives rise to relations of domination and subordination and to the exploitation of some people by others, evokes antagonism of interests, class struggle and competition. On the other hand, social ownership of the means of production unites people, ensures a genuine community of interests and comradely co-operation.
The predominance of social ownership of the means of production gives rise also to a quite different kind of distribution in a socialist society from that existing under capitalism.
Because exploiting classes and the exploitation of man by man do not exist in socialist society, there is no division of labour into necessary and surplus labour, and equally no division of the product into necessary and surplus product. Socialist relations of production give rise to an objective necessity for a quite different division of labour and its product from that obtaining under capitalism. Under socialism the means of production are socially-owned, and production itself is for the satisfaction of the needs of society as a whole and of each of its members. Consequently the labour of the producers is divided into the following two parts: work for oneself and work for society. Accordingly, the product of labour also (excluding the part used to replace expended means of production), is divided into two parts: the product for oneself and <em>the product for society. Work for oneself provides the product which is distributed between the producers in accordance with the quantity and quality of their work, and covers the personal needs of the worker and his family. Work for society provides the product which is used for social needs: expansion of production, development of education, health services, provision for defence, etc. In socialist society, where the working people are themselves in power, work for society is as necessary to them as is work for oneself. The product for society, which is used to expand socialist production, augments the material prerequisites of a further improvement in the welfare of the working people. The product for society which is expended on education, health services, social welfare and other material requirements of the whole people, also serves to satisfy the needs of the working people, in the same way as the product for oneself.
Social ownership of the means of production and of the products of labour, together with the distribution of products in the interests of the working people, account for the decisive superiority of the socialist over the capitalist economic system. All the advantages of large-scale social production, which ensures an enormous growth in the productive capacity of labour, accrue to society as a whole and to the working masses, and not, as under capitalism, to the exploiters.
The predominance of social ownership of the means of production means that socialist production is freed from the contradiction, inherent in capitalism, between the social character of production and the private capitalist form of appropriating its fruits. In socialist society, social, socialist property in the means of production is in conformity with the social character of production. Accordingly, the relations of production in socialist society fully correspond to the productive forces.
In characterising the socialist system, J.V. Stalin writes:
“Here the relations of production fully correspond to the state of productive forces, for the social character of the process of production is reinforced by the social ownership of the means of production.
“For this reason socialist production in the U.S.S.R. knows no periodical crises of overproduction and their accompanying absurdities.
“For this reason, the productive forces here develop at an accelerated pace, for the relations of production that correspond to them offer fullscope for such development." (Stalin, “Dialectical and Historical Materialism", Problems of Leninism, 1953, English edition, pp. 739-40.)
In contrast to the production relations of modern capitalism, all of which to an increasing extent hinder the development of the productive forces, socialist relations of production ensure their uninterrupted growth. Having arisen and developed on the basis of the existing productive forces, socialist relations of production are in turn a powerful motive force of their further accelerated development.
The full conformity of socialist relations of production to the character of the productive forces of society does not mean, however, that there cannot be any contradictions between them. Contradictions between the productive forces and the relations of production inevitably arise, since the productive forces, being the most mobile and revolutionary element in production, outstrip the relations of production under socialism as well. However, in contrast to social systems founded on exploitation, these contradictions are not antagonistic and irreconcilable. Hence the position does not normally, in socialist society, lead to a conflict between the relations of production and the productive forces. Socialist society is able, in good time, to bring relations of production into conformity with the level of the productive forces, since it does not contain any classes interested in retaining out-dated forms of economy.
(1) Socialism has two forms of social property: State property and cooperative collective farm property. There are correspondingly two kinds of socialist economy: State enterprises and co-operative (collective) enterprises.
(2) In socialist society, State property is the property of the whole people. State property is the highest and most developed form of socialist property. The leading and determining role in the entire national economy belongs to it. In the U.S.S.R. it includes the overwhelming bulk of the nation’s wealth. Co-operative collective farm property is the group property of individual collective farms, industrial co-operative artels and consumer societies.
(3) In socialist society personal property extends to the objects of consumption. A special form of personal property is the personal property of the collective farm household. The personal property of the working people grows with the increase of socially-owned socialist property.
(4) The production relations of socialism are characterised by: (1) complete predominance of social property in the means of production, existing in two forms—state property and co-operative collective farm property; (2) emancipation of the working people from exploitation, comradely co-operation and socialist mutual aid between people in the process of producing material wealth; (3) distribution of the product in the interests of the working people, according to the principle: to each according to his labour.
Under socialism the division of labour into necessary and surplus labour, and also the division of the product into necessary and surplus product, disappear.
The labour of workers engaged in socialist production is divided into two parts: work for oneself and work for society. In work for oneself, the workers make the product which is distributed among them according to the quantity and quality of their labour. In work for society, they make the product which is used for social requirements.
(5) In socialist society the relations of production fully conform to the character of the productive forces, and are the major and decisive force which determines the uninterrupted growth at a rapid pace of the productive forces of socialist society. The contradictions which arise in the course of socialist construction between the productive forces and the relations of production are not of an antagonistic character and do not develop into conflicts, since socialist society is able in good time to bring the relations of production into accord with the level of the productive forces.