«Wherever commodities and commodity production exist, there the law of value must also exist.

In our country, the sphere of operation of the law of value extends, first of all, to commodity circulation, to the exchange of commodities through purchase and sale, the exchange, chiefly, of articles of personal consumption. Here, in this sphere, the law of value preserves, within certain limits, of course, the function of a regulator.

But the operation of the law of value is not confined to the sphere of commodity circulation. It also extends to production. True, the law of value has no regulating function in our socialist production, but it nevertheless influences production, and this fact cannot be ignored when directing production. As a matter of fact, consumer goods, which are needed to compensate the labour power expended in the process of production, are produced and realized in our country as commodities coming under the operation of the law of value. It is precisely here that the law of value exercises its influence on production. In this connection, such things as cost accounting and profitableness, production costs, prices, etc., are of actual importance in our enterprises. Consequently, our enterprises cannot, and must not, function without taking the law of value into account.

Is this a good thing? It is not a bad thing. Under present conditions, it really is not a bad thing, since it trains our business executives to conduct production on rational lines and disciplines them. It is not a bad thing because it teaches our executives to count production magnitudes, to count them accurately, and also to calculate the real things in production precisely, and not to talk nonsense about "approximate figures," spun out of thin air. It is not a bad thing because it teaches our executives to look for, find and utilize hidden reserves latent in production, and not to trample them under foot. It is not a bad thing because it teaches our executives systematically to improve methods of production, to lower production costs, to practise cost accounting, and to make their enterprises pay. It is a good practical school which accelerates the development of our executive personnel and their growth into genuine leaders of socialist production at the present stage of development.

The trouble is not that production in our country is influenced by the law of value. The trouble is that our business executives and planners, with few exceptions, are poorly acquainted with the operations of the law of value, do not study them, and are unable to take account of them in their computations. This, in fact, explains the confusion that still reigns in the sphere of price-fixing policy (put in bold type by the authors: the integral evaluation of economic literacy of managers and economists generation brought up by Marxism political economy). Here is one of many examples. Some time ago it was decided to adjust the prices of cotton and grain in the interest of cotton growing, to establish more accurate prices for grain sold to the cotton growers, and to raise the prices of cotton delivered to the state. Our business executives and planners submitted a proposal on this score which could not but astound the members of the Central Committee, since it suggested fixing the price of a ton of grain at practically the same level as a ton of cotton, and, moreover, the price of a ton of grain was taken as equivalent to that of a ton of baked bread. In reply to the remarks of members of the Central Committee that the price of a ton of bread must be higher than that of a ton of grain, because of the additional expense of milling and baking, and that cotton was generally much dearer than grain, as was also borne out by their prices in the world market, the authors of the proposal could find nothing coherent to say. The Central Committee was therefore obliged to take the matter into its own hands and to lower the prices of grain and raise the prices of cotton. What would have happened if the proposal of these comrades had received legal force? We should have ruined the cotton growers and would have found ourselves without cotton». (“Economic Problems of Socialism in the U.S.S.R.”, “Remarks on Economics Questions Connected with the November 1951 Discussion”, part 3. “The Law of Value Under Socialism”.)

These fragments show that J.V. Stalin understood that there was no way to escape the objective law of value in economy in the course of building Socialism and Communism. But management and economists’ ignorance prevented from achieving the utmost efficiency of planned Socialist economy of the USSR. The efficiency was improved by turning on market machinery of self-regulation of using available over and above the plan facilities. It was impossible to overcome this ignorance under the limitations of I-centered economic theories both: Marxism and private-owner theories. Without overcoming the ignorance they would not solve the problem of combining the plan of public utility conditioned by the population science and market machinery within one system of production and consumption.

This is not the whole story. If de-bureaucratization had been carried out it would have exposed ill-intentioned bureaucrats and would have enlightened ignorant bureaucrats on the basis of a theory alternative to Marxism. Then market machinery could have been subordinated to the planned beginning and the main economic law of socialism by means of the machinery of dues and donations and included into Socialism economy. But J.V. Stalin was not content with market machinery as a regulator. It did not guarantee superiority over Capitalism in the quality of economy management for in capitalism economy there had already been an attempt to combine a planned beginning on a national scale with market self-regulation. That was the reason for J.V. Stalin to set another object explaining the issue of the law of value under socialism. This object was more important than combining a plan and market machinery of self-regulation of using available over and above the plan facilities in the USSR national economy:

«In the second phase of communist society, the amount of labour expended on the production of goods will be measured not in a roundabout way, not through value and its forms, as is the case under commodity production, but directly and immediately — by the amount of time, the number of hours, expended on the production of goods <if we specify it as the time conditioned by techniques and organization and remember that scientific, technical, organizational and technological advance are held in store of plan stability then everything is right. There appear no unfounded manhours needed to make a scientific discovery>. As to the distribution of labour, its distribution among the branches of production will be regulated not by the law of value, which will have ceased to function by that time, but by the growth of society's demand for goods. It will be a society in which production will be regulated by the requirements of society, and computation of the requirements of society will acquire paramount importance for the planning bodies» (put in bold type by the authors: comments will be given later). (“Economic Problems of Socialism in the U.S.S.R.”, “Remarks on Economics Questions Connected with the November 1951 Discussion”, part 3. “The Law of Value Under Socialism”).

If we go into particulars of direct responsiveness of people’s needs and production orientation towards them directly, it suggests the following. There should be created such systems of production and of production management and distribution that secure production of almost everything[427] at a pace that does not cause nuisance for a consumer during the time while his order is being executed.

J.V. Stalin realized this system was an alternative for the market, that could excel the market in efficiency. Naturally he did not wait for Communism to be built to move to this system but started it right away.