A Developing Crisis In Collectivism

A Revolutionary idea has caught on in Soviet Russia— ”copy the capitalists if you want to improve efficiency”. According to a report to US News and World Report from its staff correspondent in Vienna, there is mounting pressure for change in Soviet methods of production, both agricultural and industrial. Russian economists have been urging an end to the stifling controls of planned economy. On September 14,1964, Sergei Afanasyev, a top economic administrator, called for more initiative and independence being given to local managers. Soviet economist Yevsei Liberman had two years earlier broached the idea of using the profit-motive which acted as the great incentive in capitalism. This economist is now predicting that the system which is being cautiously tested in a few places will be applied throughout Soviet light-industry in the new year. The idea has certainly caught on in some parts of heavy industry also. In agriculture, too, capitalist methods are gaining with the strong boost given by Khrushchov, during his time. The present government in Soviet Russia does not intend to reverse this policy of Khrushchov’s.

     The new position can be described as “to stay communist but work capitalistically”. The State will not retransfer property to the old or to new private owners. The State will continue to be the owner. Managers of plants showing bigger profits will get bigger bonuses for themselves and their workers. The plants get more leeway in determining the prices for their products and in settling wages.

     The old Soviet rule was that the plant-manager must carry out the decisions made by State-appointed planners—what to produce and how much. Prices to be charged for products were prescribed for him. His sources of supply of materials required were also set down from above. His labour force was prescribed along with the wages to be paid. Improvements and expansion of the plant were also decided from above. The basic goal of the plant-manager was to fulfil the economic plan, regardless of profit or loss. There was no connection between supply and demand. Even if the plant produced unwanted nails or shoes, the production must pile up year after year.

     The new move will change all this. Where the profit motive is experimented with, the size of bonus payable to managers and workers will depend on sales and profits after all expenses are met. The manager will still be asked to fulfil the prescribed target, but he is free to follow his own decision as to how to do it.

     He can use for instance, lighter metals or cheaper leather, etc. The managers and workers will have all along the line an incentive for efficiency and discretion to do what will attract consumers. Managers of retail stores will put pressure on whole-Salers and wholesalers on the factory, to achieve profit. Thus the pattern of national planning will get reversed. Production will shape itself from demand and from below upwards.

     Soviet peasants are either members of collective farms or State-employed labourers on State-farms. But a peasant is now allowed to retain a plot for himself and some livestock. These, he manages for his private use. These islands of free enterprise make up now only 4 per cent of the country’s arable land. Yet it appears that they supply nearly half of the country’s meat, milk and vegetables and nearly 80 per cent of its eggs. Khrushchov saw that elimination of these private plots would lead to a major food crisis.

     The former Soviet Premier planned to extend the free-market principle. He proposed that collectives and State-farms be allowed to sell products in the cities directly in stores of their own, instead of going through the State-owned wholesale stores. Khrushchov put this proposal on the definite ground that, if this were done, it would lead the producing management to study the people’s demands better. The new dictators do not seem disposed to reverse all this.

     Some time ago the orthodox communist view was against selling on credit. It was deemed to be an ‘enslaving’ policy. Now, consumer credit is climbing up fast. Instalment-buying for TV sets, radios and cameras reached last year 2.3 billion dollars.

     In Czechoslovakia also the new system will come into force by which the State Will set only long range goals. Year-to-year planning will be left to individual establishments. Performance will be measured by the profit made which will determine the wages and the bonuses to be paid to workers. On farms, a new system went into effect last year, allowing more decentralization and increased initiative at local levels.

     In Poland the story is even more in the same direction. Five years ago the Government started selling State land to peasants. Today 87 per cent of all land is privately farmed. Two-thirds of road transportation is in the hands of 30,000 private contractors.

     In Bulgaria, more than 50 industrial enterprises are experimenting with profit-motive and free competition. State subsidies have been withdrawn. The plan is to extend the new system to all industry in the next two years. In Hungary each worker in the State-farms is being given a share of the output of State--farms for himself.

     It will thus be seen that capitalism is getting back into communist countries. No one, not even governments, can for long continue going against the laws of human nature. The more sensible governments revert more quickly, the more obstinate take more time. Private owners were deprived of their property and the State became the owner. The management was taken over and the methods of management were changed. The new move brings the management back to capitalist style, though the ownership will continue to be the State’s. The new move, therefore, does not alter the position of the State. Soviet leaders will not permit private capitalism, i.e., individual ownership of factories and farms, because this would strike at the foundation of communist power and undermine it. It is now intended to adopt capitalist methods to make more out of the concerns—profit-motive transferred from the owner to the State.

     The question is whether this would either be a gain for the people who work, or escalade national production. As far as the freedom of the mass of the workers is concerned, they will be still merely a wage-earning civil army under physical discipline, and there is no advance towards individual freedom, for which nature thirsts. As regards the effect on production, the basic defect continues. Increase—and incentive which is at the root of all human work—will continue to depend on the loyalty of the bureaucracy and the officials, and not much on the profit- motive. The question at the root of it all is whether man, the average man, would work better on the motive base of personal profit or on loyalty to the State; and, in which case is it easier to check the attendant evils? There is no doubt as to the answers, at least so far as our country and people are concerned.

     Alberto Ronchey, an Italian journalist, has brought out a book on present-day Russia. It is not about the United States that the Soviet regime is now worrying, but how to get her farmers to produce more food, without appearing to abandon communist theory. It is not the overthrow of the capitalist West that concerns her so much now as the growing restlessness of her own technological elite. India’s present rulers have built their policies on the foundation of admiration of communist achievement. They have matter here for reflection. How can we make the farmers—and for that matter the industrialists—produce more than they are doing? How shall we make them put their whole heart in the work, give up their present pleasures, save and invest, risk, watch and work? Shall we assume they will do it all for the general welfare, in obedience to doctrine and the call of the state? Or shall we recognize and provide for natural motives and exploit them? The Russian communists have seen the light. But the Congress Party in India has not yet seen it. Must the people suffer before the right policy, based on human nature, is discovered and adopted? There is an elite in Russia which rethinks on the basis of experience. Its attachment to doctrine yields to reason. Here in India, the Congress is still in the grip of borrowed doctrines and slogans. Borrowed, ready-made doctrines are blindly and more rigidly adhered to than doctrines discovered for oneself.

     Aside from the immorality, violence as Gandhiji used to call it, which is involved in expropriatory socialism which poisons confidence for all time,—confining oneself to the amoral issue of national production,—it is easy to see, if one is not under the spell of a holy dogma, that production cannot thrive under bureaucratic or other official management. It can only thrive under the personal interest fostered by profit-incentive and assurance of ownership and other well-known rights. This is the crucial point against Statism, State-capitalism, communism and other allied ‘isms. Adopting the methods of capitalism and grafting them on Statism will not do the trick. What is called for is a revolution deeper than a mere surface-change. But the change in methods is a virtual confession of failure of the communist attempt to go against nature. A crisis is Certainly developing in communism which may change its character altogether.

     What is the bridge between this profit-motive axiom of production and the general welfare which is a goal accepted by all? The bridge is given by Gandhi—the steady development by a national educative effort of the sense of trusteeship— the moral realization that all property, all wealth in any form, is entrusted by Iswara to the temporal owner. He holds it for himself and in trusteeship for others who need his help. This was Gandhiji’s political and social wisdom based on high scriptural authority:

lsaavaasyamidam sarvam yat kincha jagatyaam jagat
Tena tyaktena bhunjithaa maa grdhah kasya swid dhanam

     The State should encourage and in various ways help this sense of sense-induced trusteeship instead of depending solely on taxation and official welfare work.