«It therefore follows that in the sphere of foreign trade the means of production produced by our enterprises retain the properties of commodities both essentially and formally, but that in the sphere of domestic economic circulation, means of production lose the properties of commodities, cease to be commodities and pass out of the sphere of operation of the law of value, retaining only the outward integument of commodities (calculation, etc.).

How is this peculiarity to be explained?

(…)

If the matter is approached from the formal angle, from the angle of the processes taking place on the surface of phenomena, one may arrive at the incorrect conclusion that the categories of capitalism retain their validity under our economy. If, however, the matter is approached from the standpoint of Marxist analysis, which strictly distinguishes between the substance of an economic process and its form, between the deep processes of development and the surface phenomena, one comes to the only correct conclusion, namely, that it is chiefly the form, the outward appearance, of the old categories of capitalism that have remained in our country, but that their essence has radically changed in adaptation to the requirements of the development of the socialist economy» (put in bold type by the authors). “Economic Problems of Socialism in the U.S.S.R.”, “Reply to Comrade Alexander Ilyich Notkin”, part 3 “The third point”).

If we do not examine the problem within the bounds of Marxism we can come to the only right conclusion:

Marxism political economy does not call all things and phenomena by their proper names. Consequently there appears inconsistency of the form and the content of a phenomenon.

In situations of this kind concordance of form and content is a subjective matter:

As far as H. Ford and J.V. Stalin are concerned it is in favor of public property de facto, planned beginning on a national scale, the principle of superior profitability of national economy based on effective management of business and prices according to real present and future needs of conscientious working people and the state concerning products and services;

In case with a Soviet bureaucrat, a Marxist and dogmatist it is in favor of himself and to the prejudice of ideals and the cause of Communism. One cannot find fault with it: everything is justifiable by Communist advisability expressed in Marxism. A person has a right to interpret it in a certain way according to his/her position in the hierarchy of post subordination.

The inconsistency of form and content is not the result of Marxism only, but of any modification of the I-centered worldview. In order to establish the unity of form and content[425] an alternative comprehensive sociological theory was needed that would call things and phenomena by their proper names, thus secure uniqueness of life conception for different people.

If a theory of this kind were developed, well-meant but ignorant bureaucrats would begin changing the structure of their mind while mastering the theory. They would adopt their subjective ideas of life to reality and consequently would quit being bureaucrats. They would become good managers and businessmen, Bolshevik entrepreneurs. The theory would help most people expose ill-intentioned «know-alls» pursuing the object of destroying Socialism advances and re-establishing a kind of legalized crowd-“elitism”. As a consequence of this unsolved problem alongside with some others J.V. Stalin was right under those social and historic circumstances to limit the scope of commodity-money exchange (trade in the field of production). The limitation was implemented by means of interaction of the state economic sector and co-operative one on the basis of prices established by the state.

There was nothing to prevent profitability of co-operative business from growing to the level that could be reached on the basis of state planned shopping prices, but bureaucracy in management. The same concerns increasing profitability of state enterprises as compared to a planned level.

Here a question arises, why did J.V. Stalin write that common wealth increase should be ensured by means of:

Direct wage raise;

Further systematic cut in prices for articles of mass consumption.

The latter point is especially important.

The answer to the question shows that in Socialist economy the principle of superior profitability of national economy as a whole must go with the principle of achieving utmost self-repayment of enterprises. Note that the principle of superior profitability of national economy is manifested by a planned systematic cut in prices according to the increase of social labor productivity and of serving people’s needs in various products including services. As a result the savings of manufacturing a product as well as over and above the plan production should become apparent not only in price cutting and output rate increasing[426], but in the up growth of nominal cash income of enterprises. This enables groups to develop their funds of public consumption and to reward their employees thereby encouraging them to work conscientiously, without waiting for a national cut in prices.

During post-Stalin’s period this strategy was distorted. But it does not mean that J.V. Stalin was wrong in his idea of a planned state beginning on a national scale and principles of self-repayment (profitability) of national economy as a whole as well as of single enterprises.

The issue of commodity production under Socialism and accordingly the issue of market functioning is explained by J.V. Stalin in the following way:

«Commodity production must not be regarded as something sufficient unto itself, something independent of the surrounding economic conditions. Commodity production is older than capitalist production. It existed in slave-owning society, and served it, but did not lead to capitalism. It existed in feudal society and served it, yet, although it prepared some of the conditions for capitalist production, it did not lead to capitalism. Why then, one asks, cannot commodity production similarly serve our socialist society 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 thanks to such decisive economic conditions as social ownership of the means of production, the abolition of the system of wage labour, and the elimination of the system of exploitation?

(…)

Of course, when instead of the two basic production sectors, the state sector and the collective-farm sector, there will be only one all-embracing production sector, with the right to dispose of all the consumer goods produced in the country, commodity circulation, with its "money economy," will disappear, as being an unnecessary element in the national economy. But so long as this is not the case, so long as the two basic production sectors remain, commodity production and commodity circulation must remain in force, as a necessary and very useful element in our system of national economy. How the formation of a single and united sector will come about, whether simply by the swallowing up of the collective-farm sector by the state sector – which is hardly likely (because that would be looked upon as the expropriation of the collective farms) – or by the setting up of a single national economic body (comprising representatives of state industry and of the collective farms), with the right at first to keep account of all consumer product in the country, and eventually also to distribute it, by way, say, of products-exchange – is a special question which requires separate discussion.

Consequently, our commodity production is not of the ordinary type, but is a special kind of commodity production, commodity production without capitalists, which is concerned mainly with the goods of associated socialist producers (the state, the collective farms, the cooperatives), the sphere of action of which is confined to items of personal consumption, which obviously cannot possibly develop into capitalist production, and which, together with its "money economy," is designed to serve the development and consolidation of socialist production». (“Economic Problems of Socialism in the U.S.S.R.”, “Remarks on Economics Questions Connected with the November 1951 Discussion”, part 2. “Commodity Production Under Socialism”.)