Changing Russia

Last January the Union of Soviet Journalists decided to invite a team of Economist reporters to tour Russia. The fruit of this visit, which took place in May, appeared as an article at the beginning of June entitled “Changing Russia?” and gives us an interesting insight into the forces at work there.

Until now Russian capitalist industry has never had it so good. It has enjoyed a sellers’ market. There have been shortages all round which has meant that anything produced could be sold whatever its quality. But the situation is rapidly changing. Sections of industry are finding they cannot sell their products so easily. To overcome this, bargain prices and hire purchase have been introduced. No doubt the high-powered advertising we know in the West is not far away.

Against this background must be seen the proposals of Professor Liberman for reform of the industrial incentive system. Production in Russia is capitalist though this has been obscured by superficial differences between industrial organisation in Russia and the self-confessedly capitalist countries of the West. “In the Soviet Union today,” says the article, “the director of each factory is given target figures of the gross output he should seek to obtain and the costs per unit at which he should aim (plus bonuses for himself and his workers if he overfulfils them), as well as control figures on the amount of labour he may hire, the wages he must pay, and the amount of investment he can undertake. In a capitalist economy he is provided with the same sort of economic indicators by a free market.” If Liberman’s proposals were adopted, on the other hand, Russian industry would come nearer to that of the West. He has suggested that the industrial enterprises be required not only to fulfil their plans but also, as the Economist puts it, “to strive harder to produce the things that would be most profitable in the present state of market demand.”

The development of the productive forces and the spread of capitalist relations into the countryside has created a larger working class dependent entirely on money-wages in order to live. This has led to an increased demand for consumer goods. Now that its power stations, steel works, machine tool factories and the like have been built, Russian industry has reached a position where it can meet this.

These economic changes are the basis of the growing liberalisation in Russia. The conservative elements who see their positions threatened are trying to resist these changes, but their efforts would appear vain. The 1917 Revolution overthrew Tsarist Absolutism and allowed nascent Russian capitalist industry to develop more freely and rapidly, but only at the expense of submitting the country to a more barbarous absolutism, the Stalinist regime. Now this absolutism has in its turn become a fetter on capitalist expansion and is being cast aside.

Experience has shown that a modern capitalist country cannot for long be run on police-state lines but only with the consent, even if passive, of the mass of the workers. For this reason we may see even bigger changes yet—the emergence of political democracy for instance. This is what history teaches us to expect. Changes in economic circumstances cause corresponding changes in the political, legal, ideological and literary superstructure. This is precisely what has been happening in Russia recently.

Russia now has the productive forces of a developed capitalist country yet still the political regime of a developing country. This contradiction shows itself in the disagreements between the liberal and conservative elements in Russia, in the campaign against police excesses, in the demand for more freedom of expression in poetry and art, in the Liberman controversy and in anti-Stalinism. Russian industry has developed to such a stage that political and other changes are required before it can develop further. Once liberalisation has triumphed in Russia, as it will, the capitalist character of Russian industry will have become more obvious. Russia will lose its attraction in “left-wing” circles. History, by destroying the illusion that Russia is Socialist, will once again have done our work for us.

One final point. It appears that industrial techniques are not all that the Russian rulers have learned from the West. The reporters mention as one of the official evasions the claim that “the large number of savings bank accounts proves that wealth is evenly distributed”! More interesting is the comment which follows. “In fact,” explain the reporters, “it is common practice for the wealthy to avoid conspicuousness by operating several separate accounts.” Yes, Russia has a wealthy privileged class too. Which is what we’ve been saying for years.