Passage from "Towards a New Socialism"

Here we base ourselves on the classical Marxist analysis of society.  In Marx’s
view, the most basic distinguishing feature of different modes of social organi-
sation is the manner in which they ensure the ‘extraction of a surplus product’
from the direct producers.  This requires a little explanation.  The ‘necessary
product’, on this theory, is the product required to maintain and reproduce the
workforce itself.  This will take the form of consumer goods and services for the
workers and their families, and the investment in plant, equipment and so on
that is needed simply to maintain the society’s means of production in working
order.  The ‘surplus product’, on the other hand, is that portion of social output
used to maintain the non-producing members of society (a heterogeneous lot,
ranging from the idle rich, to politicians, to the armed forces, to retired working
people),  plus  that  portion  devoted  to  net  expansion  of  the  stock  of  means  of
production.   Any  society  capable  of  supporting  non-producing  members,  and
of generating an economically progressive programme of net investment, must
have some mechanism for compelling or inducing the direct producers to pro-
duce more than is needed simply to maintain themselves.  The precise nature of
this mechanism is, according to Marxist theory, the key to understanding the
society as a whole—not just the ‘economy’, but also the general form of the state
and of politics.  Our claim is that the Soviet system put into effect a mode of
extraction of the surplus product quite different from that of capitalism.  To put
this point in context, some more general historical background may be useful.
Consider,  first,  the  distinction  between  feudal  and  capitalist  society.   Un-
der feudalism,  the extraction of a surplus product was plainly ‘visible’ to all.
The specific forms were various, but one typical method involved the peasants
working their own fields for so many days in the week, and the lord’s land for
the rest.  Alternatively, the peasants might have to surrender a portion of the
produce of their own fields to the lord.  If such a society is to reproduce itself,
the direct producers must be held in some form of direct subordination or servi-
tude;  political  and  legal  equality  is  out  of  the  question.   A  religious  ideology
that speaks of the distinct ‘places’ allotted to individuals on this earth and of
the virtues of knowing one’s proper place, and that promises a heavenly reward
for those who fulfill their role in God’s earthly scheme, will also be very useful.
Under capitalism, on the other hand, the extraction of the surplus product
becomes ‘invisible’ in the form of the wage contract.  The parties to the contract
are legal equals, each bringing their property to the market and conducting a
voluntary transaction.  No bell rings in the factory to announce the end of the
portion of the working day spent producing the equivalent of the workers’ wages,
and the beginning of the production of profits for the employer.  Nonetheless,
the  workers’  wages  are  substantially  less  than  the  total  value  of  the  product
they generate:  this is the basis of Marx’s theory of exploitation.  The degree
of  exploitation  that  is  realised  depends  on  the  struggle  between  workers  and
capitalists, in its various forms:  over the level of wages, over the pace of pro-
duction and the length of the working day, and over the changes in technology
that determine how much labour time is required to produce a given quantum
of wage-goods.
Soviet socialism, particularly following the introduction of the first five-year
plan under Stalin in the late 1920s, introduced a new and non-capitalist mode of
extraction of a surplus. This is somewhat obscured by the fact that workers were
still paid ruble wages, and that money continued in use as a unit of account in
the planned industries, but the social content of these ‘monetary forms’ changed
drastically.   Under  Soviet  planning,  the  division  between  the  necessary  and
surplus portions of the social product was the result of political decisions.  For
the  most  part,  goods  and  labour  were  physically  allocated  to  enterprises  by
the  planning  authorities,  who  would  always  ensure  that  the  enterprises  had
enough money to ‘pay for’ the real goods allocated to them.  If an enterprise
made monetary ‘losses’, and therefore had to have its money balances topped
up  with  ‘subsidies’,  that  was  no  matter.   On  the  other  hand,  possession  of
money as such was no guarantee of being able to get hold of real goods.  By
the  same  token,  the  resources  going  into  production  of  consumer  goods  were
centrally allocated.  Suppose the workers won higher ruble wages:  by itself this
would achieve nothing, since the flow of production of consumer goods was not
responsive to the monetary amount of consumer spending.  Higher wages would
simply mean higher prices or shortages in the shops.  The rate of production
of a surplus was fixed when the planners allocated resources to investment in
heavy industry and to the production of consumer goods respectively.
In very general terms this switch to a planned system, where the the division
of necessary and surplus product is the result of deliberate social decision,  is
entirely in line with what Marx had hoped for.  Only Marx had imagined this
‘social  decision’  as  being  radically  democratic,  so  that  the  production  of  the
surplus would have an intrinsic legitimacy. The people, having made the decision
to devote so much of their combined labour to net investment and the support of
non-producers, would then willingly implement their own decision.  For reasons
both  external  and  internal,  Soviet  society  at  the  time  of  the  introduction  of
economic planning was far from democratic.  How, then, could the workers be
induced or compelled to implement the plan (which, although it was supposedly
formulated in their interests, was certainly not of their making)?
We know that the plans were, by and large, implemented.  The 1930s saw
the development of a heavy industrial base at unprecedented speed, a base that
would be severely tested in the successful resistance to the Nazi invasion.  We are
also well aware of the characteristic features of the Stalin era, with its peculiar
mixture of terror and forced labour on the one hand,  and genuine pioneering
fervour  on  the  other.   Starting  from  the  question  of  how  the  extraction  of  a
surplus product was possible in a planned but undemocratic system,  the cult
of  Stalin’s  personality  appears  not  as  a  mere  ‘aberration’,  but  as  an  integral
feature of the system.  Stalin:  at once the inspirational leader,  making up in
determination and grit for what he lacked in eloquence and capable of promoting
a sense of participation in a great historic endeavour, and the stern and utterly
ruthless liquidator of any who failed so to participate (and many others besides).
The Stalin cult, with both its populist and its terrible aspects, was central to
the Soviet mode of extraction of a surplus product.