Filtzer, Donald Arthur (1976) E.A.

Preobrazhensky and the theory of

expanded reproduction in the USSR during the period of primitive
socialist accumulation.PhD thesis.

http://theses.gla.ac.uk/5064/

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E. A.

PREOBRAZHENSKYAND THE THEORY OF EXPANDED REPRODUCTIu;

IN THE
SOCIALIST

USSR DURING THE PERIOD OF PRIMITIVE

Donald

Thesis

for

Submitted

Institute

of

Arthur

the

Degree

Filtzer

of

Soviet

and East

University

of

May 1976

ACCUMULATION

Doctor

European

Glasgow

of

Philosophy

Studies

CONTENTS

Summary

iv

Preface

Introduction:

Part

I:

Preobrazhensky's

Marxism

Schemes and the

Marx's
Reproduction
a Mixed Economy

Chapter

1:

Circulation

and Simple

Chapter

2:

Marx

on the

Reproduction

Part

I:

Appendix

Part

to

Chapter

3:

Simple

Chapter

4:

Expanded

Appendix

Chapter

Part

to

5:

Chapter

4:

The Expanded

Capital

7:

The Accumulation

Chapter

8:

Marx

Chapter

9:

The Accumulation
"Pure"
Capitalism

Under

on the

General

Under

141

Under

Concrete

Use of

Outlines

the

of

Capitalism

Prices

161

of
186

of

Capitalism

Concrete

Fixed

193

Capital

Reproduction

212

Capital

241

Fixed

of

Pure
of

Under

Expanded

Expanded Reproduction
Period
of Primitive

117

151

Reproduction

Chapter

10:

Reproduction

Reproduction

Reserves

Chapter

Fixed

of

The Application
Production

6:

IV:

83

Reproduction

Reproduction

Chapter

Part

of

Reproduction

Expanded

III:

Analysis

The Reproduction
of II(v+s);
Necessities
and Luxuries

Simple and Expanded

Capitalism

II:

15

Amortization

Fixed

Capital

Fund

272

Under
284

in the
Socialist
of

the

USSR During
Accumulation

Goods Famine

the

303

CONTENTS
(Contents)

Chapter

Chapter

Chapter

11:

12:

13:

The Circulation
and Reproduction
of
Individual
Components of the Product
Both Sectors
The Accumulation
of
Concrete
Capitalism
The Goods Famine

in

Fixed

Capital

the
in
337

Under
376

the

USSR

390

Conclusion

409

Bibliography

423

SUMMARY

Preobrazhensky
Evgeniy
Alekseyevich
Marxist
was one of the great
that
thinkers
of Bolsheviks
prepared
of the generation
and carried
out
Yet his
Revolution.
the October
work has remained
relatively
unexplorThose non-Marxist
accounts
of Preobrazhensky's
ed by Marxists.
writings
even where
activities,
well-intentioned,
and political
are hopeinadequate.
lessly
They grasp
the Marxist
he used
neither
categories
his
be understood
that
theories
economic
can only
nor the fact
within
theory
the context
and his
of his
work as a whole
of the transitional
society.
this
thesis
Introopens
a result
with
an extensive
and in-depth
into
duction
the nature
Marxism,
touching
of Preobrazhensky's
upon its
the role
philosophical
roots
and stressing
most important
of class
conin Preobrazhenzky's
theory
of the transition.
sciousness
The main body of the work deals
Preobrazhensky's
specifically
with
in the Soviet
during
theory
the period
of expanded
reproduction
system
We start
Marx's
primitive
socialist
of its
accumulation.
with
use of
his
the reproduction
theory
schemes,
and show their
connection
with
of
the circulation
the reproduction
of industrial
capital
and with
of speThen we use
cific
production
and social
relations
under
capitalism.
theory
Marx's
of the reproduction
simple
of fixed
capital
capitalunder
ist
to demonstrate
the system
the need for
within
reproduction
reserves
industrial
the two-sector
scheme of separate
and agriculand to derive
to
tural
that
Preobrazhensky
Further,
sectors
was to use.
we use this
introduce
the question
exchange
of
of the importance
of the material
as their
exchange
on
reproduction,
as well
specific
use values
under
the basis
of their
value.
theory
Next we analyze
of simple
and expand
upon Preobrazhensky's
Here we show that,
and expanded
reproduction
concrete
capitalism.
under
in department
I and II,
organic
given
compositions
of capital
unequal
there
for
to rise,
the organic
of capital
and the tendency
composition
is a tendency
This
towards
can
of means of production.
under-production
into
the orbit
be overcome
by drawing
the petty-commodity
of
sector
that
to make the necessary
sector
capitalist
exchange,
and impelling
in its
to
the capitalist
sector
so as to allow
adjustments
production
its
the peasant
disproportions
with
exchange
overcome
own internal
via
sector.
the exThen we open up an unexplored
economics,
area
of Marxist
from
that
Starting
a problem
off
panded
reproduction
of fixed
capital.
different
had touched
Preobrazhensky
we excontext,
upon in an entirely
the effects
that
the extended
turnover
capital
of fixed
period
amine
deficit
has upon expanded
to
of
It
a
chronic
rise
gives
reproduction:
to
After
solutions
possible
of
number
means of production.
a
exploring
is
the
the
find
the problem
that
solution
only
pure
capitalism
we
under
I.
transfer
from
department
II
to department
of capital
famine
findings
we
to the Soviet
In order
to apply
the above
goods
its
in
famine
detour
take
that
general
must first
goods
a
and examine
trace
in
large
Following
we
Preobrazhensky's
argument,
morphology.
part
the under-production
of
the inherent,
towards
tendencies
out
structural
it
overcome
the Soviet
cannot
means of production
which
system,
within
because
backwardness.
it
the economic
and
deprives
This
of its
of all
for
have
flexibility
that
anticipating
social
would
a socialist
economy
inherentthese
the
disproportions,
economy
and circumventing
and makes
ly weaker
to crisis
than
capitalist
and more prone
even the advanced
countries.
theory
of
From there
Marxist
the
to
we introduce
another
new aspect
by examining
of
expanded
reproduction,
the circulation
and reproduction
in
the
the individual
components
sectors
the
of
of all
product
annual
As

from
Preobrazhensky's
Although
off
we start
economy.
own treatincomplete.
topic,
this
It proves
the
sparse
and
was
ment of
necessary
detail
the circulation
to trace
of the individual
out in great
elements
from
the point
their
of view of both
reproduction
of expanded
quantitative
and their
material
exchange
exchange
as values
as particular
use
is between
division
Here the primary
those
values.
products
produced
in the private
turns
that
sectors--it
and state
out
no category
of exreproduction
can be reproduced
except
via a complex
panded
circuit
of
involving
departments
What is more,
all
of all
exchange
sectors.
under
involves
this
Soviet
between
exchange
conditions,
strict
proportionality
department
Any disequilibrium
beand all
each distinct
of the others.
in value
two departments,
tween
terms,
lead
either
or material
the
will
into
system
stagnation.
entire
findings
these
Finally,
to our discussion
we apply
of the expandWe trace
the expanded
of fixed
capital.
out
ed reproduction
reproducboth
tion
capital
under
of fixed
concrete
capitalism
and in the Soviet
that
Here we find
the conditions
dicof expanded
system.
reproduction
department
that
the peasant
I assumes
tate
sector's
an increasingly
larger
of the production
share
of the circulating
part
of the constant
in all
departments.
Yet this
the condicapital
condition
contradicts
famine
tions
that
of material
exchange
under
a goods
of the type
existUnion.
As with
of Preobrazhenvirtually
every
aspect
ed in the Soviet
long-standing
this
the validity
posisky's
analysis,
confirms
of his
both
from
tion
that,
an economic
and from
a political
point
of view,
in one country
Only massive
socialism
was impossible.
assismaterial
from
help
tance
the USSR out of
other
socialist
countries
could
pull
its
impasse.
intervention
Only
the political
proletarof the Western
iat
from
degeneration.
the Revolution
save
could
Soviet

PREFACE

This

thesis

foundations

cal

the

of

the

of

cally,

seemed to
their

explicit,

and their

possible.

We still

if

basic

connection

with

thinkers,

not

just

of

Marxism.

We hope

that

idity

of

with

the

character

In

any case,

dition
tion
Marx's

currents

with

the

embodied
invaluable

Union

with

its

Marxism

the

as we say,
of

twenties,

the

the

twentieth

writ-

century
the

of

thesis,

valdeals

which

any such
of

a fairly
of

International.
to

not

of

the

var-

Marx

of

Such a study,

while

not

merely

movement
have

and

beginning

conflict,

an appreciation

Trotskyist
could

Hegel,

Kant,

bastardization

and the

tra-

with

assessment

and came into

Preobra-

examina-

itself--starting

a critical

necessary

of

paper.

a particular

predecessors,

century
Second

study

thorough-going

Marxism

the

down onto

made it

actually

tell

will

contents

of

First,

arose,

simply

as

and exciting

some indication

table

the
plan

entire

as extensively

this

be

only

Marxism.

at

still

in

were made

original

of

of

it

time

Preobrazhensky's

most

all

least

at

way through

nineteenth

but

of

philosophical

that

dogmas of

in

but

out

case.

the

necessitate

his

in

Preobrazhensky,

be the

the

premises

drawn

Marx

evolution

end of

and,

could

that

and as a representative

the

the

they

two reasons.

philosophical

of

so rich

philosophical

original

would

and wending

ious

iet

our
for

own battles

Feuerbach,

of

of

Marxism

the

of

were

Introduction

glance

as a methodologist
within

writings

to

the

and politi-

economic

Preobrazhensky's

a quick

theoretically

econo-

At

own time,

in

Soviet

the

1920's.

be one of

to

methodologi-

the

of

we can give

of

was essentially

zhensky

his

appraisal

little

that

reader
This

this

this

show him

both

the

of

Preobrazhensky,

implications,

these

believe

1920's

the

Oppositions

and philosophical

appreciated

as a study

members,

Preobrazhensky's

us that

properly

in

leading

Trotskyist

political

ings

E. A.

of

works

the

who was one of

mist

intended

was originally

within

been undertaken

the

Sov-

within

-2-

the

bounds

of

a PhD thesis,

ing

is

in

philosophy

not
this

nored
but

Preobrazhensky's

between
tions

and political
The second

ly

did

finished

article

form

ed to

include

izma"

12 and

being

volume

1926.1

there

was

of

"Economic

of

the

Equilibrium

USSR, " which

latter

volume,

Soviet

agriculture,

policy

the

of

rudiments
marked,

carry

the

infer

from

of

were

of

Soviet

state,

socialist

"A

culture.,
from

chapter

words

"To

the

closing

be

Volume

the
go to

second,

final

portion

the

Capitalism

addition,

The

to

was
is,

that

an

first

of

of

continued"

at

their

passage

VKA 22 that

"devoted

close.

the

of

In

together

the

" all

first

three
we can

addition,
they

economic

VKA 17,

articles,

New Economics;

The

to
industry,

Soviet
and

these

The

II.

be

examination

System

the

Volume

of

time

heading

of

credit,

and

in

Nos.

this

of
some

and

section

in

printer

general

with

Sotsial-

historical

the

the

first

articles,

as VKA),

to

under

II

of

of

published

referred

exchange

together

The New

coming

economy,
of

I of

In

Preobrazhensky,

system

he intend-

did.

to

the

Volume

that

never

form

in

Predstavleniya

of

his

of

published

it

to

eventual-

publication

was a pair

most

Concrete

Soviet

the
the

comprise

that

material

of

(hereafter

articles,

assump-

Socialism"),

About

knowledge,

Under

according

analysis

concrete

Ideas

to

our

II
these

of

Preobrazhensky

three

of

as Part

with

of

philosophical

chapters

Kommunisticheskie

to

connection

the

of

Introduction,

our

Preobrazhensky

as drafts

ig-

a constant

the

After

New Economics,

by

best

a group

of

The first

were

The

of

the

nature

Akademii

promised
To

the

volumes

These

Volume

of

them.

Communist

and

13,1925.

behind

take

II.

Kommunisticheskoi

Vestnik

is

successive

("Socialist

and the

The New Economics,

we can only

what

draw

to

study.

in

train-

we have

say that

simply

lay

our

"Sotsialisticheskie

entitled

in

of

and as Volume

Economics

part

subject

work,

in

in

lies

reason

become the

major

that

tried

to

not

Not

ideas

economic

goals

is

contrary.
we have

thesis

this

throughout

This

proper.

To the

problem.

by someone whose academic

particularly

were

to

-3the

constitute
of

the

theoretical
of

regularities

ism and in

the

II,

economy

Soviet

the

of

presenting

both

reproduction,

expanded

particular

Volume

of

portion

under

modern

Union.

II

Volume

of

reproduction

data

provided

ures

of

in
by

Gosplan.

questions

that,

in

the

of

the

living

These

the

three

There
the

are

numerous

Preobrazhensky

In

reader.
left

are

in

of

the

cal,

the

most

academic

his

left

to

the

the

clearly

round

the

reader
political

intended.

the

In

the

This

way.

which

draw

the

log-

their

individual

theor-

conclusions

are

felt

certainly
political

of

the

exin

terms

As theoreti-

written.

to

tech-

pointing,

be explained

must

that,

by

conclusions

Once more,

reproduction
that

highly

surface

they

The New Economics.

the

to

political

in

commentary

form.

barest

by the

openly

inferences

the

and

be presupposed

were

mass of

examples,

to

he had done
out

involved.

the

which

have

of

of

on the

again

must

in

obvious

are

they

Preobrazhensky

cull

the

place,

pressures

analyses

a lot

to

the

only

elucidation

seemingly

first

the

numerical

particular

which

to

from

was so actively

presented

and leaves

free

methodologifigures

with

due to

in

up the

within

he was not
that

no doubt

conclusions

about

theoretical

purely

no way complete.

usually

many of

Fig-

"3

mode of

jumpy

the

concrete
Control

the

certain

illustrate

especially

are

out

upon

scheme

with

by

all,

Preobrazhensky

which

followed

pieces,

work

sparse

in

here

shortening

haste,

obvious

context

1926 and 1927,

in

are

above

to

The arguments,

draw

political

from

economy.

addition,

rarely

cept

Soviet

often

unstated.

nical,

we prefer

and the
is

of

algebraic

outlined

"touch

well

interests

rarely

points

as

misprints,

concluions,

etical

and,

themselves

arguments

ical

statistics

study,

in

"filling/the

of

we have

would

struggle

political

task

USSR that

articles

were written

the

up

Soviet
It

present-day

they

the

"

section

cal

take

to

was

capital-

The remainder

in
of

an analysis

it

schemes

Preobrazhensky

was
and
had

-4Even so,
turn

helps

also

They

acter.

lation

to

on the

one hand,

the

categories

on in

embarked

Volume

one part
the

use of

of

inevitable,
brazhensky

was himself

Preobrazhensky's
subsequent

was then

capitalist
Marx's

in

Marx).

which

of

over

time

department

must

in

the

a)the

of

represent
be analyzed

(which

the

of

an-

In this
body of

the

Marx had

which

lays

of

each

in

was the

of

in

go into
tendencies
from

one another.

scheme
The

reproduction
and prehe dropped
remains

capital

"adjusts"

II

procedure

capitalist

he.

he added

Second,
of

his

all
article

capitalist

some detail
in

for

this

department

expositional

place,

production.

expanded

composition

first

To Marx's

with:

other.

Preo-

First,

schemes.

worked

accumulation

separately

In

schemes
the

basis

the

arose

was almost

Marx's
In

oc-

Preobrazhensky's

over

This
of

conditions

with

distinct

pore

to

articles

new ground.

regularities

as we will

to

petty-commodity

organic

and b)that

these

of

treatment

Marx's

Marx

that

coexisting
that

that

straightforward.

more realistic

The problem,
these

than

a sector

define

production
assumptions

constant
that

to

historically

the

under

all

he added

capitalism

his

VKA 17--which

those

to

to

solutions.

entirely

alterations

two new departments

object

in
less

analysis--is

made two fundamental

for

in

that

breaking

argument

system,

more and more problems

and attempted

fact

in

similar

however,

schemes,

the

Soviet

other.

some length

Once we began

attention

given

re-

the

on the

emerging

and their

and application

discussion

our

one chapter.

our

quite

the

char-

Capital.

of

reproduction

demanded

that

a task

at

its

technical

for

out

within

an analysis,

demonstrate

we had planned

Originally
cupy

II

relations

such

was undertaking

work

in

which

reproduction

development

for

needed

works

and even

to

economic

social

proper

as we will

thesis,

of

unstable

these

abstract

attempt

regularities

and the

Preobrazhensky,

overtly

a rigorous

highly

the

to

coherence

their

represent

economy

alytical

a clear

explain

Soviet

this

is

there

employed

below,

to
by

was that

development,
Preobrazhensky

-5failed

to

do this

his

analysis

rises

runs

where
ital
of

in
of
into

accumulation,

in

In

have had to

radically

(in

apply

VKA 22)

Preobrazhensky's
the

latter's

the

state

they

did

tion

of

in

that

les

of

so in

But not

clear

where

times

failed
the

it

dencies

have

based

helped

him

of

clear.
was to

economy.
since

be applied
the

both

to

and

state

production;

yet

complicated

the

further

difficulty
on the

make the
his

applica-

principout

USSR would

connection
he at

argument,
that

results

we

construct-

economy worked

elucidate

the

are

Marx's,

entirely

not

certain

where

Soviet

Both

was the

the

reader

often

than

could

almost

the

introduced
the

further

There

in

has been that

capitalist

Preobrazhensky

circumstances

as long-term

brazhensky

did

to

peasant-industrial

a mixed

even notice

peculiar

from

them.

VKA 22 is

only

would
to

So once

to

to

cap-

rates

he was saying

conditionally.

and this

ways,

in

reproduction

economy

equal

examples

argument,

schemes

capital,
of

capital

obvious

make what

significantly

in

than

more complicated

only

of

Preobrazhensky

political

sectors

categories

argument

VKA 17.

change

of

different

Marx's
the

was far

differed

sectors

to

order

of

The end result

out.

reproduction

problem
categories

less

innovation

Marx's

and peasant

peasant

in

effects

numerical

Preobrazhensky's

rework

important

The second

is

things

new examples,

entirely

his

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NOTES TO PREFACE

1.

2.

E. A. Preobrazhensky,
(Oxford,
1965),
p.
Ibid,

p.

2.

The

The New Economics,

translated

by Brian

Pearce

2.

articles

from

Vestnik

Kommunisticheskoi

Akademii

are:

"Problema
Khozyaystvennogo
Ravnovesiya
Kapitalizme
pri Konkretnom
iv SovetskoiSisteme,
" ("The Problem of Economic Equilibrium
Under
Concrete
Capitalism
System"),
VKA, No. 17,
and in the Soviet
1926, pp. 35-76.
"Khozyaystvennoe
Kapitalizmei
Ravnovesie
Konkretnom
pri
SSSR" ("Economic
Equilibrium
Capitalism
Under Concrete
System of the USSR"), VKA, No. 18,1926,
pp. 63-84.
"Khozyaystvennoe
in the System of

Ravnovesie
v Sisteme
the USSR"), VKA, No.

SSSR" ("Economic
22, pp. 19-71.

v Sisteme
and in the

Equilibrium

in Nicolas
Spulber,
The last
has been partially
translated
of these
(Bloomington,
for
Growth
Foundations
Soviet
Economic
Strategy
of
Indiana
This
University
124-73.
Press,
1964),
translation,
pp.
from virtually
from being
inadequate
is highly
incomplete,
aside
had
translators
the
no sense of
every
simply
point
of view,
since
Preobrazhensky
the meaning
employed.
of the Marxist
categories

The terminology
mistranslations
useless.
All

the translators
abound, often

passages
cited
and D. A. Filtzer,
writings,
translated

from
eds.,
by

have used is quite

and
arbitrary,
whole passages practically
rendering

Ticktin
H.
from
H.
22
VKA 17,18,
are
and
Economic
Selected
E. A. Preobrazhensky,
by
Gaddy and to be published
Clifford

-14Paginations
Lane.
Allen
are for the Russian originals,
as obviousfor the English
ly none exist
translation.
Page numbers are also
translation
of VKA 22, wherever
given for the Spulber
the corresalso appear in that
passages
ponding
edition.
3.

VKA 22,

4.

The most

p.

71.

important

Bumazhnye
the Epoch

Den'gi
of the

Finansy
v Epokhu
the Dictatorship
Prichiny
in the

of

Preobrazhensky's
Proletarskoi
Dictatorship,

v Epokhu
Proletarian

Proletariata
Diktatury
of the Proletariat,

Padeniya
Kursa
Rate of
Exchange

monetary
Diktatury
Tiflis,

writings

are:

(Paper
Money
1921).

(Finance
in
Moscow,
1921).

(The Reasons
Nashego
Rublya
Moscow,
1922).
Our Ruble,

the

Epoch

for

the

("On
"0 Dvukh Spornykh
Voprosakh
Marksovoi
Teorii
Deneg"
in Marx's
Questions
in Arkhiv
Theory
tentious
of Money"),
(Moscow,
1930),
132-59.
i F. Engel'sa
pp.
Teoriya
Moscow,

Padaiushchei
1930).

Valiuty

(A Theory

of

Depreciating

in

of

Fall

Two ConK. Marksa

Currency,

Preobrazhensky
In addition
published
a number of other
articles,
lectures,
policy
a
and pamphlets
and edited
on Soviet
monetary
financial
(for which he provided
history
the involume on Russian
For a more detailed
list
troduction).
of titles,
see the
Bibliography.

-15INTRODUCTION
PREOBRAZHENSKY'S

is

It

truly

someone so active
twenties

it

is

the

conceptual

a prolific

striking,

is

was during

for

underpinning

the

theoretical

sources

ideas

economic

In Preobra-

major

secondary

and

Soviet

the

Marxists.

his

since

by most

cited

and thinker

writer

from

attention

even more

The New Economics,

work,
ing

so little

receive

case

such

as Preobrazhensky

politically

should

zhensky's

that

surprising

MARXISM

as providTrotskyist

the

of

is

Opposition,
in

role
46"),

the

at

the

as he/credited

same time

(which

1923 Opposition

and a place

second

to

only

political

up around the "Platform

grew
that

leading

the

with

in

Trotsky

of

the

of

Opposition

the

of

1926-27.1
As a result
knows

Preobrazhensky

books,

anthology,

is

which

the

of

Preobrazhensky's

only

theory

contribution

to

For

reasons

brazhensky

by utilizing

print.

work

been

of

the

have
Soviet

thought
will

from

these

one of

be properly
concepts

these
the

Spulber's

that

virtualportion

that

primarimany,

impressions
the

1920's

of

if

Preo-

and of

his

general.

become obvious,

we consider

in

transition

in

a major

examine

Kom-

Vestnik

has been

sources

their

received

in

in

by non-Marxists,

out

carried

is

It

to

in

exist

be available

to

his

of

currently

The effect

have

that

Marxist

used
2

two

published

article,

even pretended

was perhaps

and he can only

NEP To socialism,

Marxists,

Only

second-hand.

have

Marxist

Introduction,

From

of

scholars

brazhensky's

only

that

economists.

interested

less

22,1927),

now out

studies

by bourgeois
most

(No.

including

audience,

important

very

Akademii

ly

this

or
and

his

while

munisticheskoi

not

more

The New Economics

translation,

ly

English-speaking

the

accounts

understood

within

and categories.

the

thinkers

a Marxist
This

course

is

of

of
Preo-

inadequate.

wholly

Marxist

richest

in

we think,

his

framework
something

age,
and
that

-16-

make Preobrazhensky--or
translate

must

depth,

that

vitality,
Hence

ist

logical

interpretations

proletarian
was ended

taking

this
to

close

position

Erlich,

hadn't

been quite

surprise
in

been

analysis,
ideological

its

incompatibility

Marxism
tain
of

the

of

West.

that

It

pure

our

and genuine

is

with

of

the

himself

if

its

is

interesting
this

isolain

come very

of

is,

socialism
the

only

the

that

of

economy

view

development

should

as taking

industrialization

where

least
of

that

one country--that

The primary

"theory"

into

and that

view,

Such a point

at

strongly

political

if

sees

a Marx-

value

gives

socialism

of

this

is
sort

us some insight
in

into

one country

and

Marxism.

extreme

Richard

arrives

at
that

Day,

for

sympathies

Day considers

worked

construction

units,

it

that

to

example,

conditions,

and simple.

view,

genesis

other

national

that

he concluded

in

the

economics

The most

for

who share

Soviet

under

socialism

premise

isolated

persuasiveness,
Erlich.

survive

and others

bourgeois

since

problem

the

At

the

only
the

existed.

USSR was impossible

the

so under-industrialized.

us,

in

in

standpoint

possible

abstract,

a technical
of

the
accept

have

place

could

revolution

should

not

dictatorship

in

none

1927,

an

them of

was said.

having
in

is

strips

positions

a conthe

retain

what

Erlich,

end when,

socialism

via

implicitly

they

dead
of

adopting

to

given

was admitting

and logical
development

autonomous

tion

are

where

Alexander

Preobrazhensky

that

a theoretical

the

appear

contradictions

into

The result

question,

falsifies

actually

non-Marxist

to

theory.
in

To

i. e.,

poverty-stricken

ideas

the

emasculates

the

categories,

Marxist

of

seem straightforward.

would

implies

too

simply

and as such

divergent

wildly

is

bourgeois

and subtlety

interpretation
their

into

ideas

that

complexity,

how well-intentioned.

no matter

any Marxist--comprehensible

their

framework

ceptual

do,

can possibly

no non-Marxist

whose feigned

Trotsky

a conclusion
Preobrazhensky

have

given

precisely

familiarity
his

ideas

opposite

had made some sort

with
a certo
of

that

-17-

tacit

to

accommodation

he then

Such interpretations,

both

his

This

approach

in

textual

gone over

brazhensky.
of

Second,

a tendency

this

of

a political

any particulate
they

ideas

premises

theory

done

that

and actions
and/or

of

such

a very

built

such

on the

sprung

the

would

them,

actually

not

validity
like

Preo-

non-Marxists
of

the

socialism,

1920's.

Against
the

comprehend
Left

except

type

of

Before

first
their

the

was and
examining

ideas

the
and ac-

as well

whether
goals

as part

society,

establish

premises,

and assess
allow

will

the

USSR.

the

evaluate

from

it

socialism

behind

can be a

This

what

we must

premises

then

we can

actions

in

thinkers

and the

that

in

properly

of

at

(and many Marxist)

particular

conception

not--be

towards

worked

create

have

they

someone

non-Marxist

and others

have

authors

selected

construction

to

applied.

we can engage

that

propensity

impossible

their

of

would

Having

tions.
the

context

would--and

is

to

of

in

were

itself

an analysis

from

theories

wrong,

challenge

controversy

Trotsky,

struggle
the

and within

goals

it

that

argue

are

with

Preobra-

various

and of

the

odds

they

we must

with

industrialization

treat

inadequately

in

the

counter

ubiquitous

Preobrazhensky,

of

how it

almost

the

about

we would

ideas

we must

is

that

writings

in

all

information.

of

First,

industrialization

equating

facts

been

at

one level

certain

but

exercise,

categories

At

1928.

are

which

material

have

in

economic

the

pieces

go further.

bourgeois

employing

that

they

essential

necessary

We must

suffice.

have

other

and often

useful

of

of

expense

that

or

to

goals

to

and showing

his

two ways.

by referring

been misinterpreted,
the

in

can be countered

refutations

allegedly

and the

methodology

general

They

common.

thesi!

one country--a

capitulation

and divorce

as an economist

strictly

zhensky

in

thing

in

socialism

how much they

no matter

one major

share

each other,

of

Preobrazhensky's

"explain"

to

uses

"theory"

the

to

such
be

achieved.
This

approach

necessarily

leads

us to

try

and reconstruct

exactly

as

-18Preobrazhensky's

what
of

who has written

tacitly

terms

the

accepted

(at

have

They

this.

of

No one that

was.

Preobrazhensky

about

done

Deutscher--has

socialism

of

concept

least

in

Marxist

all,

reference

we know

English)--not

even

and non-Marxist
by

created

the

alike,

non-Marxists

and

than

other

nothing

tion

of

into

its

the

this

that

Introduction

to

make only

the

moment we would

be content

views

on the

of

how they

evolved

to

erence

the

transition.

If

zhensky,

Trotsky

Marxist

since

more

intricate
in

veloped
to

reinforce

ety,

I.

course

class

main

body

it
of

this

of

Marxism

an indisputable

fact

Union
Marxist

witnessed

the

twenties

thought,

a virtual

as politics

the

that
rebirth

saw a flowering
such

the

Following

not

just

with

very

theory.
the

over-

some of

the
de-

serve
its

appears

the
In

traditional

but

the

this

in

following

Marxist

and economics,

inside

entirunder

Revolution

Bolshevik

in

Left

easily

it

the

of

Preobra-

the

give

guise

decade

of

joint

we reject

political

or

theory
that

to

otherwise

and
ref-

Preobrazhensky

that

that

Union

particular
his

deals

theories

For

tendency

important

thesis--which

intellectual

in

who came to

interpretation

economistic

with

become clear

will

in

Preobrazhen-

Soviet

the

played

twenties--could

mid-to-late

of

philosophical

economic

The Recrudescence

Revolution

it

then

direction.

twenties,

particularly

what

is

the

of

consciousness

and no matter

It

a presenta-

and we propose

that

in

society

a much larger

We feel

the

is

some indication

give

many Bolsheviks

and narrowly
the

to

task,
in

start

socialist

the

within

the

view,

in

and the

movement.

is

we get

and an investigation

thought

a modest

we can do that,

fit

Opposition,

emerging

that

role

for

called

be a momentous

would

the

sky's

about

foundations.

philosophical

We believe

Preobrazhensky's

of

who wrote

Preobrazhensky

of

What is

and one-sided.

totality

an economist

The version

economics.

technicist

therefore

is

Preobrazhensky

treated

consistently

also

Bolshevik
the

Soviet

realms
in

literature

of

-19(a sphere

and
burst

was by no means

would

be more

be able

to

is

Marxism

cation,

the

years

practice

of

should

the

existing
do
People/not

achievement

feet

their

And so it

was only

had posed

anew problems

Marxists

The existing

were

would

conceptual

to

respond
apparatus

had more than

adequately

movement--was

simply

inoperative.

of
with

act

be expected

that

once

to

these

problems

of

the

Second

to
It

order

They

revolution

the

could

Europe
entire
in
day.

the

their

the

Bolshe-

and social

trans-

new ideas.

with

International--which

reformist
not

The

changes

and hands.

of

corresponded

the

altered

now on the

phil-

stultifi-

much of

and decisive

Revolution

fabric

of

of

awakening.

seized

fundamentally

it

movement.

with

that

to
we are

that

decades
of

reflex

for

here,

kind

this

Europe

pretend

events,

after

why,

mass upsurges

social

act

We do not

out-

presence

had as its

human knowledge

experience

following

capitalist

as well.

formation,

and the

workers'

simply

explain

suddenly

immediately
the

to

difficult

Revolution,

Bolshevik

heads

it

of

its

Western

intellectual

these

creative

(where

which

itself.

field

this

Throughout

theory

a summary of

one specific

Nor

osophy.

vik

even

with

concerned

in

give

that

of

Yet

Union

a process

a new currency,

gained

Soviet

the

understandable).

development

further

the

to

confined

immediately

ideas

Marxist

science.

overlooked)

sadly

often

cope

practice

of

that

the

tasks

at

with

hand.
inseparable

Two,
previous
theory

have

would
in

succeed
tempts

to

within

the

USSR.

intellectual
io

Gramsci.

especially

these
They

came from

in

Although
the

work
there

evolution

if

revolutionary

not,

Western
Georg

of

were
of

to

did

problems

be explained;

theory
the

definite

their

How was the

philosophers.

socialist

a world

and political
7

it

supplant

establishing
tackle

Marxist

of
to

arose

questions

ossification

for

ideas

order?
as it

and what
movement

The most
turned

out,

Europe,

primarily

Lukcs,

Karl

was to

decisive

at-

from
come
through

Korsch,

differences

between

in

to

response

new

the

the

and Antonthem,
deadening

-20Stalinism

hand of
ly

ficiently

distinct

from

that

we feel

it,

rounded
They

were

certainly
their

of

novelty
"system"

or

Marx's

ly

In

Theory

the

have,

in

his

debt

view,

essentials

of

haps

the

Lucio

there

among the

initial

three

their

ist;

Sweezy a Maoist;

liberal

emigre.

mains

so important.

sky,
put
were

field

to

Hook open-

Both

in

these

his
men

systematizing
thinkers

whose wor]

and Gramsci,

Korsch,

per-

been

Marxists--has

of

coherent

was what

For

not

form

although

they
their

by countless

politics

the

the

was even more

Hook has become a violent

the

least

premises

of

archetype

shared

in

among them,

anti-commun-

the

ex-Marxist-now.

common that

achievements
other

and approach

content
this

we mentioned,

and Kolakowski
it

in

differences

philosophers

Yet

and Luxemburg
in

by their

Sweezy

1942.8

among British

crucial

followers.

later

of

the

fairly

existed

true

in

least

Paul

of

by the

Sidney

towards

Lukcs,

aspects

influenced

Of more modern

of

effect

vital

abandoned

as did

contributions

methodology.

profound

been

as quotation-

Colletti.
If

Marx's

not

the

of

in

published

The

new historical

the

philosopher

and Korsch,

made important

important--at

most

American

Development,

the

shows

Lukcs

to

to Marx,

long

sur-

school.

tradition.

profoundly

were

the

to

had

what

any new philosophical

response

as rediscoverers
that

and from

its

of

back

went

thinkers

thirties

early

in

was suf-

them as a coherent

developed

they

Marx

but

Other

possessors

fact

in

to

referring

that

achievements

our

clearly

sole

they

Capitalist

of

the

hagiographers,

expressed

the

that

movement.

work.

in

that

philosophy
before

broad-

they

movement,

Marxist

had gone

what

safe

redefined

theoretical

official

of

was not

work

but
or

mongers

not

radically

conditions,

most

Marxist
in

a tendency

crystallized

speaking

international

the

upon

were

far

men and women,

these

and assumptions

was and resurpassed

Trot-

Lenin,

men systematized
upon

which

and

others

operate.

There

is

an interesting

unanimity

with

which

virtually

all

of

these

-21identified

individuals
gations,
Marxism
of

had gained

that

them quite

official

done by the

to

distill

First,
of
that

is

there

such

emphasized

theory

scientific

influence

an "objective"
on the

to

the

or

side

Marx's

due to

certain,

the

influence

hand with

the

false

on the

between

external

world,

its

books),
the

of

attempt

Marxism

theory
theory

highly

selectively

late

of
battle

nineteenth

that

this

same

one hand,

man, on the

and

perceives,

man passively

which

the

against

dichotomy

of
sense,

that

and which
since

this

the

each other
themselves
but

in

man's

human beings

society
in

the

possibly

between

relationship

direct

order

to

ensure

to

stimulus

of

preserving

had

Lukcs
was not

on Feuerbach-Hook's

two

im-

direct

statement

Marx

consciousness

and his

practi-

most

must
their

the

into

enter

definite

subsistence
not

as a species--continuation
terms

nor

section

crucial

Marx

with

(which

The German ideology

was the
is

Gramsci,

Korsch,

neither
of

We can start

theories?

entirety--including

In any

with

these

of

place

manuscript

1930's,

activity.

logical

of

reflection/cognition

the

Hand in

remarkable

full

the

made about

tinuation

is

in

published

lations

formulation

to

had established

in

put

It

access

cal

to

adequate-

other.

himself.

portant

arguments,

rather

active

under

an attack

nature,

What to

until

by Engels)

went

is

on the

(largely

science.

reflection

the

has been

This

positive

as Bern-

within

their

Our concern

All

" such

Marxism

of

separately.

the

opposition

statements

"renegades,

open

recapitulate

10

emphasis

prevalence

positivist

century

or

International.

resuscitate.

the

and their

gained

to

wish

form,

concise

Second

the

investi-

their

of

positivist-deterministic

degeneration

the

of

object

as the

the

themselves.

so much to

knowledge

beneath

collectively

in

did

they

under

roots

authors

out,

currency

We do not

as expressed

ly

that

the

movement.

either

termed

cut

correctly

and found

stein,

they

what

specifically

as the

problems

similar

social

simply

structures

re-

and conin

a biothrough

-22these

which

finds

activity

and his

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People
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-23-

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11
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-24infrastructure.

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-25it
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-26halucination.

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The German Ideology.

relations
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14

life.

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consciousness

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The hitherto
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ed in language
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necessary
relations,
result
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15
independent
have acquired
they are the expression,
existence.
The particular--and

mystified--ideas

that

people

have

about

capitalist

-26asociety
society.

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view

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ously

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-27economic,

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their

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As we have
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17

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16

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-28One aspect

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investigation

of

is

cognition

objectively

exists

We can never
abstract

and which

out

very

discern

that

which

immediately

rend-

imperfect.
has been

mention

the

subject

more conventional

of

much debate
philosophy.

within

modern

Kolakowski's

-29-

the

that

thing-in-itself

that

sion,

is

nature

activity

within

basically

Gramsci

mind.
but

the

of

seems to
less

to

subject

reality

and define
Although

can give
he would
is

only

have

have posed

the

our

prac-

a certain

intended:

is

all

Kolakowski
confu-

He might

we make it

reality

that

through

to

that

conclude

we think

rise

what

environment;

us to

and to

once we accepted

18

it.

we doubt

that

existed

we encounter

formulation

moreover,

as implying

even

irrelevant,

what

his

conceptualization

our

problem

and against

correct,

one which,

be taken

the

was simply

in

exists

tical
is

deny

was to

solution

be through

to

a construct
in

question

the

of

terms,

similar

ambiguity:

What are phenomena?

Are they something
in and
objective,
existing
for themselves,
in
or are they qualities
which man has isolated
interests
(the construction
consequence
of his practical
of his
interests
(the necessity
economic life)
and his scientific
to disin the world and to describe
things,
cover an order
and classify
to mediated
a necessity
which is itself
connected
and future
pracinterests).
tical
Accepting
is nothing
the affirmation
that
our knowledge
of things
is that
than
that
other
ourselves,
our needs
and interests,
our
knowledge
is superstructure
(or non-definitive
is
it
philosophy),
difficult
in terms
beyond
to think
this
not
of something
real
knowledge--not
in the metaphysical
sense of a "noumenon",
an "unknown God or an "unknowable",
but in the concrete
sense of a "relignorance
ative"
of reality,
which
will
of something
still
unknown,
however
be known one day when the "physical"
inand intellectual
is,
that
the technistruments
of mankind
are more perfect,
when,
in a proghave been changed
cal and social
of mankind
conditions
We are then
direction.
prediction
ressive
making
an historical
into
in an act of thought
the
that
which
projects
consists
simply
future
has taken
to that
a :process
of development
which
similar
19
from
the past
today.
place
until

There

is

outside
ever,
"real"
apart

no denial
our

is

the
This,

its

world

completely

as soon

our

of

primieval

we think,

is

of
the

or

world

The crucial

purity

observations,

point

it.

as we begin

well

to

our

must

only

valid

point,

fact
it

that

of

meaning

but

in

for
reality,
that

exists

matter

how-

seems to us,
about

and of

that

Matter

vanish.

certainly

enough,

apprehension

the

of

make any statements

and has no meaning

uninteresting

starting

"real"

the

perceptions

that

from

of

itself

is

this
It

human beings.
and nothing
can be given

exists

to

is

more.
the

oft-

-30-

that

countered

of

" is
the

the

from

in

herent

the

at

it.

and using

the

through
they
latter
from

other

and give
"iron

it

the

ore. "

If

and treated

pieces

any name,

been unknown--in
only

a social

properties

of

What,

that

are

reposited

in

say,

The ordering

as scientific

the
sense

gave

have

they

what

would

the

it

up

concept

of

work

the

mineral

legitimately

quite

as their

of

"iron

ore"

not

have

existed.

once were

it,

discerned

the

with

ore"

discover

how to

And so long

properties

finding

became "iron

containing

rocks

that

no more than

endowsocial
have

would
It
rocks

was
their

ore.

then,

ment are very

decipher

of

that

entity

had already

they

in-

not

deny

had to relate

they
they

"

The

man's

only

that

could

all:

limitations

Men had to

uncovered

"jewelry.

say,

matter

The

Marx's

know is

the

antedated

we associate

they

ornamental

human activity

no.

that

men had simply

remained

could

function

social

long

total-

to

No one would

properties,

then

only

of

The physical

this

knowledge

of

point

of

history.

but

"20

faithful

we do not

utilization.

various

them as trinkets,

ed them with
function

level

world,

concepts.

quite

a product

as iron

social

its

environment;

in

real

affirm-

" as "a product...

into

what

discovery.

its

another
its

is

Marx

as a "concrete

world

is

where
the

of

fundamental

most

point

to

of

out

head"

which

but

recognize

at

the

knowable;

matter,

prior

test

with
the

of

process

had to

the

any given

But

Grundrisse,

and comprehending,

quoted,

perhaps

came to

we eventually

the

and conception

potentially

"existed"

ore

we just

nature

human knowledge

thinking

observation

Gramsci

always

outside

of

stresses
is

universe

of

to

way we can know that

only

as "a product

formulation,

iron

existence

working-up

passage

Introduction

the

"autonomous

ed the

ity,

in

passage

cited

nature,

laws?
only

to

exist

be unveiled

and inter-relation

much a product
"laws,

Do they

" for

of

undergo

human activity,

by objective
of

human enquiry,

example,

of

outside

the

objects

which
such

enquiry?

is

profound

of

our

why what
change.

We would
environwe know
It

-31is

"nature"

not

in

nature,

the

been

inaccessible

newer

relations

is

to

world,

products

analytical

place;

order

of

entities.

Yet

how is

it

than

an account

and of

the

working

it

surplus

appear

rather

Against

activity

the

or-

of

that

that

we

of

as the

express

notion
different

this

use

the

is

sees
basic

the

tangible

more

material

is

then

"stolen"

from

the
cate-

derive

to

more

of

social
is

categories

relations,

a direct

where

capitulation
and quantities

as machines
that

relation

lost;

other,

picture
of

social
is

is

relations

conceptual

It

created

as an analytical

naturalization

social

and mater-

this

category

capital

concrete

be anything

social

of

logical

the

mere description.

could

value

things.

which

of

it

surplus

as crystallized

than

which

fetishization

the

to

seen as something

particular

standpoint,

of

abstract

they

analysis

question

becomes

again

us a richer

afford

form
this

to

the

attributes

as though

how does

case,

economy

of

ability

that

the

by which

hand,

properties,

from

under

expresses

economics,

torically-specific

categories

technique

The importance

a consequence

money,

is

value

relations

From another

of

in

we employ

other

The entire

once

the

being.

bourgeois

of

on the

is

movement

of

categories

to

forms

nature,

this

see how political

goes

latter

if

to

complex

the

reflections

simple

still

knowledge

are

not

had

that

short,

that

naturalistic

Science

conceptually

and with

itself

the

21

property

class.

that

gory

hard

is

In

within

discover

and categories

developed?

theory
in

instance,

ial,

of

fixed,

irrelevant.

for

If,

And he will

particular

very

conception

categories

becomes

world

categories

were physical
take

the

of

The positivist
to

the

new relationships

future.

the

human action

of

it.

within

undertake

in

The concepts
of

complex

previously.

and associations

out

the

man uncovers

which

"discovery"

to

make sense
but

but

changing,
of

process

process.

a social

der

is

that

defines

an his-

society.

Rubin,

among others,

production

relations

argued

that

"economic

among people

and the

-32functions

social
of
they
of

These

things.
are

inherent,

a definite
into

enter

social
certain

do not

reflect

social

environment.

the

Preobrazhensky,
in
the

common from
best

the

clarification

to

correspond

which

functions
not

forms

or

in

them,

things

environment,

the

or

have

a social

as such,

but

namely

things

production

relations

properties

of

with

things

but

in

because

character
things

which

are

through

which

people

These

each other.
the

forms

social-economic

properties

of

parts

forms

the

"22
with
point

whom Rubin
of

of

view

the

role

of

seems to
method,

of

have

shared

delivered

what

in

Marxist

categories

a great
is

deal

probably

analysis:

What we call
the categories
of political
economy are the logicalideal
descriptions
ly pure,
of the real
relations
of production,
exchange,
and distribution
which take shape on the basis of comUnder this
modity-capitalist
production.
economic system we have,
if the expression
may be used, congealed
groups of people
engaged
in the process
of production
and distribution,
as they are formed
on the basis
of spontaneous
self-regulation
of the economy by the
law of value;
individual
the fluidity
composition,
with all
of their
these groups are constantly
reproduced
state
of capat each fresh
italist
development,
forming
the definite
types of relations
of
descriptions
The scientific
production
and distribution.
of these
(and not of things
types of relations
to people
to things
of people
to things),
or people
and commodity-capon the basis
of commodity
italist
by Marx the categories
production,
of political
are called
describe,
the real
therefore,
economy; these categories
adequately
but in
in the sphere of everyday
life,
relations
under capitalism
in their
these relations
science
pure
are reproduced
abstractly,
forms.
is not the
Rent, as a category
of capitalist
economics,
tenant
real values
which the capitalist
pays to the owner of the
land,
but the distributive
between tenant
and owner which
relation
from
the regular
the
guarantees
surplus
value
pumping of part
of
Wages and surplus
one to the other.
value are the essence of the
between workers
relations
and capof production
and distribution
italist.
is the most general
the
political
of
category
commodity
..
economy, characterizing
as a whole the type of production-relations
bebetween people which is under examination
as one of relations
independent
tween separate
up into
connected
commodity-producers,
a single
economic whole by a system of market relations...
from the exploited
Behind the stream of things
flow,
say,
which
...
from the capitalists
to the capitalists,
to the bankers
workers
from one branch of production
to another,
or the landowners,
which
are bought and sold on the market
and so on,
and then consumed,
fail
they [Soviet
to see the constancy
students]
of the groups
often
from whom and to whom this
of people
movement goes on, that constancy of the production-re]+eons between men under the sytem of
commodity
economy which is p: cisely
the subject
of political
This mental materialization
economy.
which are
of human relations
in real
life
leads,
likewise
also outwardly
to an
materialized

-33incorrect
in our own economy.
conception
of many relations
Here,
behind the movement of material
too,
values
which in natura
are
the same as under capitalism
and which often
move along lines
which
"accumulation,
" "rent"),
behind
outwardly
are the same (wages,
the identity
(the same techof the relation
to nature
of people
"the same" workers),
the changes which have taken place in
nique,
23
production-relations
are not seen.
We have
terpretation
Soviet
iet

Preobrazhensky

quoted
of

economy

analytical
stands

by the

but

would

activity,

detail

much greater

existence

it.

up without

it

entire

is

on this

theory

of

theory,
of

two historically

of

below,

his

that

by the

not

hold

because

Preobrazhensky's

falls.

or

conflict

not

length

such

categories

economy was governed

lator,

at

distinct

We will

when we discuss

his

Sov-

economic

regu-

laws

theory

of

this

clarify
of

the
the

that

a single

in-

economic
in

point

class

consciousness.
Bolsheviks

Most

economy as a science
italist
it

society,

formed

which

during

this
proper

have vanished

from

from

the

political
of
to

this

ensue

and was almost

drawing

from

a profound
point

of

view,

historical

its

Preo-

opponents.

Bolshevik
this

Yet

categories

Now, this

by his

cap-

scene.

undergo

logically
not

object,

economic

would

maintstream
in

alone

the

that

but

the

historical

the

political

its

all,

transition.

by Preobrazhensky,
against

capitalism

after

economy

period

appear

end of

on

economists
out

premise

its

to

conclusion.
For

Preobrazhensky
had to

cific.

They

social

relations

that

by a particular
Though
Marxist,
able

exist;

of

was arrayed

question

the

with
to

followed

would

was held

brazhensky

cease

basis

as we say,

premise,

would

have

the

transformation
which,

that

would

seem to

would

agreed

to

its
the

be,

economic

for

they

were

mode of
this

all

analysis

certainly
of

the

mental

insofar

historically

speof

representations

as they

were

structured

production.

proposition

converse

were

transient

were

categories

the

might

seem fairly

was not.
Soviet

For

to

uncontroversial
if

economy were

the
in

applic-

categories

a process

of

-34that

transformation,

in

had employed

Marx
the

level

then

it

automatically

were

at

work

of

the

within
to

do

in

no

longer

focus

both

the

existence

theory

of

his

out

of

In

terms

of

two

primitive

It

of

then

attempted
economy

could

struggle,

necessarily

de-

categories

representations

of

were

specific

latter

the

grant

the

was

analytical

to

Preob-

words,

other

be

only

which

impossible

was

activity

accumulation,

that
ideal

the

human

fact

In

society,

principles

political

this

regulators.

premise

a socialist

of

categories

that

attained

Preobrazhensky

as

intra-party

the

had not

different

two

structure

socialist

and

with-

24

former.

development

the

with

economy,

of

relations.

the

associate

shown,

the

Soviet

transient

conceding

yet

least

those

represented

capitalism,

at

be

that

methodological

social

purely

the

could

during

historically

types

it

the

to

that

determining

New Economics,

controversy

upon

of

we would

If

society.

by

pended

analysis

were

applied

of

his

no longer

followed

which

razhensky's

they

crystallization

The

explained

is,

his

of

theory

things

obviously

went
that

the

other

two regulators

economy.

Secondly,
of
al,

that

at

work

not

the

that

of

use

categories

Preobrazhensky's
of

his

sciousness.
ical

that

interesting

basis

of

and of

the

to

was able

treatment

appreciation
Within

primacy

first

this

method

derive

in no

would

in

abstraction

law of

the

Soviet

understanding

philosophical
of

was

inseparable.

are

strands

his

the

within

place,

two theoretical

the

Preobrazhensky

that

categories

the

abstraction/

analytical

genersocial-

primitive

25

accumulation.

cation

In

the

of

economy

of

point.

on the

Preobrazhensky

the

within

transformation

was only

basis

was on the

the

fact

the
it

Marx's

is

This

way negate

ist

were

to determine

able

It

way around.

that

his

the

of
general

he gave
in

of

almost

to

the

every

economic

it

also

organization
one of

of

content

active

method

categories

his

is

but

Marx's

theory

of

the

analyt-

in
up
showed
of

human labor.

economic

writings,

one indi-

It

is

whether

con-

-35they

dealt

ope,

his

starting

point

how human labor

if

nothing

it

have

Marxists

by society

control

in

that

supposes

When dealing
tion

that

tionary

is

exist
the

of

is

society--in

or
such

case

fundamentally

embedded

in

for

persistence

the

Soviet
relations

manifestations
categories

their
Union.

Only

in

they
those

the

of

capitalism--which

society

particular

in

academic.

the

conscious

will

formation

If

to

This,

legacies

that

complicasocialist
post-revolu-

as was the
the

can tell

however,
very

postof

view

their

relacan be

they

there

with

case

concrete

us which

relations--are

rela-

and find

relations

of

division

production
away--or

whither

the

least,

be deprived

specific

also

them.

and social

socialist.

can either

prenew

be abortive--at

production

we must
social

the

upheaval.

examination

its

This

further

embryonic

production

question

the

qualitatively

the

necessity

the

both

appropriate

and reproduction,

a detailed

of

expressing

of

reified

overcome

in

ends.

out

we have

social

basis

their

which

soil

working

a society

to

was

or

of

particular

The capitalist

have

is,

that

of

will

matter.

will

entails

and this

process

theory

them.

consciousness

fundamental

call

the

society
basis,

society

socialism

we cannot
end of

towards

the

explain,

interest

and utilization

period

Eur-

Transition

power

fetishism,

commodity

Soviet

relations

in

already

further

the

tion

are

without

material

more

social

to

capitalist

tions

these

transition

labor,

not

transition

His

descriptive

socialism

socialist

the

with

unless

is,

tions

process

and the

consciousness

that

this

relations

social

and labor

production

Eeans of

Economic

change

distribution

the

over

was to

that

Western

relations.

was not

the

in

and then

a revolutionary.

of

held

always

define,

social

goes,

Theory

fascism

of

production.

society

dictum

as Marx's

rise

first

to

of

was also

Soviet

of

the

or

within

a theory

was not

Preobrazhensky's

III.

of

was organized

relations

The point,

Union

was always

Preobrazhensky

But
social

Soviet

the

with

produc-

way these

as analytical
tending.

-36is

It

in

this

industrialization.

of

ble

guaranteed

during

capitalism

ism.

Material

the

wealth

and nothing

for

tims

that
the

of

more than

It

made the

development

socialist

Soviet

In the
proletariat
the

meant

conscious

had to

act

manage its

awakening
of

the

example,

both

that

own affairs,

of

Soviet

the
the

that

working

Union's

class

successfully
the

following

sources
ist

overcome
manner:

population

around

collective

state

we would

this

and would

would

group

production.

must

of

a class

conscious

had to

mathave

still
the

until

and
had

party

sufficient

would

be

Trotsky

latter
to

sophistication

a bureaucratized

expect

the

argue,

political
by virtue

impossible
isolation.
the

Soviet
from

inheritances

it

vic-

acquisition

the

and political
that

the

socialism.

twenties

party

not

view.

offvr-

both

interests

sector

this

themselves

that

was made virtually

burdensome

a)The

relations

the

had concluded

By doing

absolutely.

production

its

of

had been

there

we could

wealth,

possi-

necessary.

and political

backwardness

By 1927 Preobrazhensky

early

proletariat's

something

not

social-

members of

and education

country

strength

And without

and the

The problem

party.

held

building

absence

very

Even if

numerical

for

but

even by the

industrialize
of

are

industrialization
the

to

Industrialization

possible,
the

vestiges

make these

and other

education

however,

Union,

was that

the

Trotsky

over

develop-

path

Marxists,

all

prerequisite

socialist

faced

the

do.

to

party

of

as guardian

had acquired

like

material

of

to

wealth

smooth

techniques

propaganda.

become bureaucratized.

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-36a-

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26

Preobra-

Although

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-37the

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up

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of

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27

built

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socialist

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-38into

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28
law.
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In

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-39the

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29

country.

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31
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relaxed

away with

norms

infusion

poverty

there

example,

would have greatly

level

was no revolution

just
the

low

the

original

and a sudden

and a hierarchical

gradually

there

not

tremendous

cause--the

our

Europe

This

would

of

on hand,

pursue

and alleviated

wage system

for

to

Western

Union.

But

them.

a single

shared

bourgeois

state

these

turned

however,

relations

mean

were

sector

out

bourge-

were highly
in

tendencies

them were

residual.
with

people

the
pay

economistic

almost

exclusive

interpretation
attention

of
to

Preobra-

the

parts

-44-

lation

and the

here

the

the

gets

pushed

with

this

whole
to

is

to

state
in

us

the

His

of

profit,

ration

the

of

to

which

of

this

duction

in

movement
relations

but

which

elements

socialist
primitive

extent
the

that

bourgeois

the

the

state
in

of

state

legacies

the

of

the

discussed

by

Marx's

surplus

value,

become

as to

different

For

instance,

surplus

become the

by analyzing

consumer
degree

the

tendencies

define

properly

the

value

away and the

withered

wages,

the

pro-

economy.
the

state
the

sector

these

accumulation
was successful
state

gains
This

was what

meant

production,

expense

of

the

e. g.,

nonlaw

To the

explain.

further

indus-

logic

Preobrazhensky's
to

the

of

a certain

the

at

was intended
it

heights"

it

with

any-

naturally

were

"commanding

brought

economy.

within

ex-

workings

industry,

state

one could

that

of

the

society

emerging.

the

of

assessed

qualitatively

was only

socialized

extension

socialist

It

theory

internal

wages would

that

The fact

had been
the

of

product,

relations

bourgeois.

demanded

were

future

the

within

and finance

that

had already

categories

a methodological

modification
the

of

and so on.

Law of

as commodity,

essence

Union

"The

view--already

substantial

Soviet

the

dealt

transitional

the

As

view.

entitled

from

the

was his

product

surplus

chapter

Even

Preobrazhensky

Preobrazhensky

such

relations

become the

The property
thing

the

in

of

Preobrazhensky's

in

such

relations
that

accumu-

economies.

point

which

that

point

economy,

worker,

these

the

influenced

value

expressing

would

here

undergo

become simply

would

is

socialist

economic

fact

the

in

section--that

and social

commodity

production
of

primitive
and state

a narrow

length

starting

would

new categories
production

of

political

etc.,

private

understanding

It

previous

categories

try

to

law

the

economy.

the

Economy, " a chapter

society.
which

law of

spite

great

crucial

transitional

of
in

one side,

Soviet

the

standpoint

tent

question

at

the

from

treated

question

in

Value

is

to

between

conflict

subject

a result

of

devoted

The New Economics

of

erosion

increasing

of
cen-

-45tralization
in

ted

the

in

a capitalist

power

to

be sold

time

the

was

that

ferring

specifically

stratum

within

terial

basis

On the

surface

in

But

which

that

law of

but

class

racy.

In

relationship
ialists,

special-

of

between

elements

state

forms

problems.

They

by the

into
surplus
into

and were
Within

the

conflict
production

this

working

functionaries

embodied,

the

found
class

in

the

category

there

who came to

layer

exercise

re-

social

law of
not

the

of

just

bureauc-

particular

managers,

control

value

groups,

and the
in

were

potentially,

social

proletariat

and the

the
stood

capitalist

expression

the

least

at

between

conflict

with

between

as Pre-

described

categories

accumulation

proletariat

If,

the

then

ration,

these

of

status

bureaucracy--

consumer

over/a

if

or

product,

and

was only

value

dis-

production

direction

be reproduced.

surplus

of

norms

to
of

distribution.

stemmed from

a socialist

ma-

production.

of

bourgeois

and

category

re-

its

found

which
of

bourgeois

incentives

socialist

the

and

relationships
the

the

apparatus

in

implied
We are

sector.

at

was a non-proletarian

which

as

seen

forms

power

forces.

of

state

have

of

contradictory

and party

com-

for

need
for

not

appropriation

transitional

nascent

terms

of

characteristics
the

bourgeois

the

congealed

growing

conflict
the

also

yet

primitive

and

mainly

labor

could

these

capitalist

appeared

transformed

social

coherent

and the

the

the

highly

themselves

the

in

had not

the

of

privileges

probably

within

economy

distributive

wages was merely

lations

category

series

bourgeois

bureaucracy,

the

state

not

being

of

process

in

to

determined,

obrazhensky

the

be reflec-

would

The piece-wage,

and

even

distributive

these

market

of

a whole

relations

strong,

eventually--with

allowed

not,

social

these

relations
which

did

precisely

were

arrayed

as a commodity,

the

the

tribution

elimination

direction:

USSR bourgeois

the

the

of

etc.

so potentially

were

were

Preobrazhensky

What

of

this

against

and managers,

abolition

and gradual

tended

labor
ists

and the

attenuation

But

modity.
that

industry

of

over

specthe

-46means of

bureaucracy

the

that

and the

production

was genuinely

production

tion

and consequent

This

is

as its

legitimating
There

is

sector

ces.

The very

itself

on the

geois

elements
of

this

point

time

in

of
its

the

deprived

that

of
it

of

consciousness
racy

state

own interests,

perpetuation

for

value

consolida-

inherently

unstable.

was unable

to

property

basis

that
the

that

because

noting
that

of

appropthat

relations

"marxism"

adopting

within
that

of

sector's

that

they

could
in

any other

during
it

moment

working

act

class

internal
would

of

cohesion
have

Their

affairs.

allowed

and the
it

to

of

bourgeois

work

at

able

factors

any reason-

show,

arose

manage production

that

persistence

the

ensured
effectively

of
with

the

upon

largely

rudiments

bour-

strong

emphasized

brake

to

V/

peasantry--

as we shall

which

contest

i. e.,

proletariat

were

as a real

norms,

the

to

and,

same time

the

Preobrazhensky

was not

soon became one of

state

there

where

nurture

the

so the

even more

twenties

would

of

application

way.

Bourgeois

economy.
the

the

to

element,

weakness

be induced

not

consequen-

at

socialist

made the

relations

profound

production

the

upon the

bureaucracy

the

state

influences

its

of

allowed

production

a certain

fact

of

mean

a temporary

bourgeois

the

class--and

and again

the

to

was precisely

productivity

at

not

by establishing

only

of

the

and on the

tissue

because

level

but

bureaucracy

The working
into

enter

able

out

through

backwardness

only

of

than

it

For

could

progress

other

basis

social

cultural

that

the

worth

bourgeois

unavoidable.

noted

that

circumstances

norms

The law

nevertheless

fact

symmetry

is

proletariat.

and its

capable

does

ideology.

which

the

undermined

though
are

This

capitalists.

Union,

revolution

a certain

state

the

the

with

of

Soviet

reproduction,

and control

had survived

the

which,

by the

explained

power

riate

in

distribution.

of

was a new class

abolished

of

relations

system

socialist
the

bureauc-

power.

Preobrazhensky

had defined

the

production

relations

in

the

state

-47as being

economy
capitalist

a highly

and socialist

to

relations

were

rection.

He accorded

Union's

social

Class

his

development

eral

of

factors,

nomic

and of

the

writings,

while

defining

what

focus

on the

the

education
of

tures
due
forces
alist

not

to

of

the
only

in

the

culture

the

of

di-

socialist

it

without

Sov-

the

socialist

char-

position

type

state
to

would

and

the

state
of

the

level
tension

for

"the

enormous
trade

general

low

level

sector,

but

also

class

the

a dead

into

run

the

of
to

itself.

and

particular
hand,

other

consciousness
Soviet

the
to

need

rapidly
of

expansion

socialist

industrialization

end.

expendi-

non-productive
industrial

development
the

an

themselves

within

however,

latter,

the

that

this

and contradiction

gen-

The early

confined

and class

with

in

period.

on the

works,

by eco-

however,

was,

overcome

conflicted

cooperative

working

to

culture

essential

soon

less

just

population

this

of

more or

of

the

of

that

noted

not

There

The later

Without

limited

Industry

of

Preobrazhensky

course

be done

to

resources

Development

level

the

accumulate

1927 he complained

of

and

production

a socialist

a political

twenties

problem,

have

culture.

a socialist

In

into

particular.

over

the

source

material

and

in

these

on a truly

was always

in

class's

working

The need

provide

the

backwardness.

as a fundamental
system.

him

low cultural

emphasis

would

Soviet

in

class

working
in

of

led

industry

by the

shift

aspect

for

take

never

argue,

if

of

socialist

proletariat

process,

could

writings
state

but

outlining

this

primitive

resolved

by the

Consciousness,

important

to

conflicts

in

of

was necessary

acquisition

role

theory

cohabitation

contradictory.

Throughout
the

show what

relations

Culture,

III-b.

the

we would

was itself

that

His

and the

change

And this,

acter.

to

a central

consciousness

and untenable

elements.

was intended

accumulation

iet

contradictory

of

the

rudimentary

level

The

of

culture

are

apparatus...
productive
of
all

soci-

bodies

-48of

society

the

all

raising

the

material
for

this

conclusion

in

the

1923

and

from

tant

this

topic

of

One of
its

his

of

a specific
investigations

havior,

primarily

forms

the

old

worked

norms
out

activists

per

se,

behavior

such

to

aspect
keep

in

much less

how individual
Morality,

of

the

of

to

socialist
it

a theory

of

consciousness
as a constituent

is

through

the

book

manual

on what
In

not

a theory

how the

individual

is

breaks

of

ideas

of

content,
and

The content

their

be-

of

specificity

or

construction.

that

class

society,

as a popular

to

previous

of

does so before

but

general

written

a socialist

was written
clarify

their

proletariat

class,

on

early

and norms

morality

historical

the

his

Like

inadequacy

analyzing

ruling

a society.
It

mind

of

capitalism

them to

enable

of

and their

appropriate

practical.

a critical
we should

of

questions

impor-

Norms is

and his

writings

the

namely

direction

the

overthrowing

create

highly

the

expression,

new norms

to

struggle
fore

into
from

In

transience.

problem,

more

and Class

book was also

this

appeared

statement

society.

theories,

books

two

33

make.

transitional

his

the

detailed

economic

and

which

is

latter

on Morality

about

the

economic

ideological

of

to

to

was

Behind

consciousness

Norms,

most

not

"32

in

in

rise

necessary

explicitly

the

means above

as well.

of

Class

the

contains

political

Marxist

these

Preobrazhensky's

approach

formulations

it

things

striking

most
and

Preobrazhensky

with

methodological

Of

respectively.
as

theory

stated

On Morality

is

the

of

A steady

class.

reasons

out

as that
society

proletariat

economic

had

and

culture

the

for

Soviet

of

working

the

of

same level

the

the

of

a well-worked

aspect,

consistency

tackle

level

but

reasons,

NEP To Socialism

1922

cultural

Preobrazhensky

that

From

to

living

of

stood

be drawn

level

cultural

social

culture

the

standard

only

to

Raising

class.

ruling

tends

always

even to

for

party

the

book

consciousness

acquires

part

of

in

its

was there-

knowledge

formed.
ideology

has

he considered

discussing
class

it

general,

obviously

or

-49has a determinate
It

a class.

is

fully

Classes,

in

is

morality

subordinate

and help

They

moral

values

poses

upon

religion
it

(to

the

religious

justify

its

it

did

ruling

role

in

If
class

act

production,

overall

an impossible

to

to

the

demands of
and in-

and intermingle

class,

the

ruling

while

the

freed

in

emerge

by,

completely

a system

never

the

daily

their

coherence

or which

these

necessarily

out

the

with

im-

latter

class

uses

masses

invoke

themselves

from

for

their

oppression.

This,

of

course,

ruling

not,

if

form,

opposition
was par-

its

to

its

the

Everything

objective
role

ruling
it

did

at

philosophy,

conform

to

demanded

constantly

its

historical

then

broadly

must

morality
to

literature,

art,

e. g.,

class

opposition

development,
position:

work

basis

the

in
or

of

as an ideological

ideological
of

domination.

which

course

their

movements.

utopian

morality

interests.
the

of

impose

to

principles

and domination,
not

and

regard

they

we see that

have

they

these

truths,

with

classes

dominant

the

and class

any other

the

that

their

class

correspond

influenced

wealth

that

extent

true

Like

is

formulated

their

the

struggle
that

Thus historically

same wealth

ticularly

ety's

from

inherited

In

subordinate

constantly

mystification)

this

etc.,

are

them.

to

the

able

place.

moral

interests,

class

class

principles
give

been

however,

class.

the

The problem

strength.
form.

pure

and moral

norms

have

ruling

of

as general

corresthat

or

first

the
always

and reinforce

complex,
too,

the

of

development

struggle

ternal

to

those

and the
class

classes

They

have

of

a crude

morality
in

have

classes

become extremely

assume either

particular,
needs

ruling

classes.

to

own interests

in

interests

and material

and articulated

its

classes

upon

with

conflict

that

of

way that

subordinate

of

conscious

this

Matters

life

interests

historically-determined

momentary,
it

however,

class

and ruling

historical

the

with

be wrong,

would

between

pondence
class

link

interests,
point

a given

find

class

would

would

contradict

its

class

that
to

its

in

soci-

itself

in

everything

-50its

that

system

of

morality

Preobrazhensky

obvious.

it

said
then

to

ought

do.

This

be

much should

adds:

Matters
the morality
stand otherwise
as regards
of the oppressed
in the sense that here it is difficult
to follow
class,
the connecbetween the morality
dominates
tion
that actually
the practice
of
This is because the
of the given class.
and the interests
a class
is not always conscious
interests;
oppressed
class
of its class
functioning
develand its
morality
at a given stage of the class's
interests.
to its
The opopment thus might not correspond
class
first
in-itself
(an sich),
takes shape as a class
class
pressed
is,
it occupies
that
to the
a definite
social
position
with regard
classes
of society;
and only then,
sometimes by means of a
other
formation
is it
that
takes many years,
of its
class
consciousness
for-itself
(fr
into
is,
into
that
transformed
a class
sich),
a
interests
of its
and which has consticlass which is conscious
itself
by other
tuted
of being surrounded
under the circumstances
has not conAnd here,
the oppressed
still
while
class
classes.
in this
itself
period
of its
existence
way, at a definite
stituted
it is led not by its
own inherent
class
norms, which answer its
interests,
but is under the thumb of the ruling
morality,
own class
is,
that
economically
of the morality
of the class
which dominates
34
and politically.
is always class morality;
in class
that morality
society
we
see
...
is led by the morality
to
but often
class,
of another
a class
ideology
it
is
the
of
and
with
subordinated,
economically
which
it
is
for
broken.
it
has
Thus
the
classes
oppressed
not yet
which
to seek their
of
class
norms not in the period
specific
necessary
the birth
steps of class
and not in the first
of these classes,
"forbut in the period
of the class
of the formation
struggle,
itself,
" in the period
with enemy classes,
conflict
of sharp class
in
the economy
finally
in
the
the
class
of
new
period
of
rule
and
35
of the country.
and politics
Class

any more than

economy

do not

norms

the

or

class

norms

ized

them to

help

fighting

force.

require

will

to

content,
divisions

bond

itself,

But

be sure;

into

as the

but
have

general

The New Economics

its

of

have

will

some of

its

class

they
been
social

will

norms.

to

liquidated
norms.

Preobrazhensky

These
remain

still

it,

into

may change

continues

proletariat
of

interests

exist

norms

and class

will
such

until

the

either

of

when it

power,
calls

power,

a system

evolved

for

struggle

of

seizure

regarding

society

as Preobrazhensky

though

some form

themselves

transformed
In

period

so long

revolution,
it

the

the

with

merely

The proletariat

state.

during

exist
bourgeois

of

vestiges

other

to

cease

norms

utila unified

after

the

as a class
change
time

their

as class

have been

36
elaborated

in

some detail

the

-51and historical

structural

and the

accumulation
the

former

case,

tion

within

"the

pores"

by building

demonstrated

their

ter's

these

the

plunder

of

political
of

petty

they

have

tion

of

within

infrastructure

reproducible
we see the
A socialist

stability

of

economy,

like

in
is

which

importance

It

must

advance

similar

will

with

the

both

an affirmation

the

sense

in

the

process

revolution

and
this

of

the

production

is

It

al-

preconditions

relations

on a

Its

makes

socialize

the

economy

relations

and political

to

be planned
and consciously

after

only

as a whole,

society
with
put
of

the

into

class

each

step

pro-

piecemiel,
insticlass

into
relations
Here

production.
in

of

construc-

working

production

element

for,

the

resources

economic

a mode of

conscious

forms

when the

future

socialist
it

accumulation

primitive

the

the

give

question

the

and one of

to

socialist

the

i. e.,

In this

before

and adapted

can organize

which

spontaneously.
anticipated

it

that

power

resour-

economy,

long

property
it.

of

an episode

revolution,

impossible

permit

establish-

accumulation

capital.

luxury.

altered

Capitalist

same way the

only

lat-

and made the

and reproduction.

proletarian

is

It

do not

simply

It

the

economical-

immediately

which

the

capitalist

no such

completely

capitalism.

has taken
real

been

is

It

In
accumula-

conquer

pre-capitalist

begins
"

could

a prior

"is

constancy

enjoys

after

In

superiority

attain

socialism.

tutions

it.

primitive

production

by merchant

and placing

The proletariat

craft

within

which

its

manufactories,

capitalism

after

it

only

of

primitive

accumulation.

It

society.

over

capitalist

where

perty

began

acquired

development,

generalizing

can begin

necessity

presupposed

under

ready-established

footing

of

production

goes on more rapidly

for

socialist

inevitable.

been

revolution

bourgeois

primitive

a handful

manufactories

capitalist

of

superiority

had also

ces which

between

feudal

of

destruction

eventual

ment of

period

capitalism

simply

ly

differences

transition

that
that
again
period.

will

not

evolve

along

the

way

practice.
consciousness.

The pro-

-52letariat

cannot

because

revolution,

that

ments

of

cific

practice

culture

stract

that

ically

out

can be willed

drew

zhensky

in

of

and behavior

on the

had to
tion

do and what
just

not

the

a cohesive

of

a working

countryside,
formed
which

in

the

was only

absence

in
of

from

in

brought

his

of

on the

even real

of

of
this

article,
bourgeois

the

of

it

with

not

but

becoming

culture

the

was a ques-

than

But

the

most

a minority
leav-

war,
from

the

consciousness

Soviet

Better,

among the

having

consciousness

We should
in

it

what

recruited

proletarian.

Fewer,

it

civil

a peasant

"medievalism"38

37

"human material"

a proletarian

struggle,

"Better

between

had been

was newly

work

Soviet

the

Rather

in

of

overthrow.

consciousness,

killed

preliminary

beginning

though

Here

ap-

transitional

habits

so-called

class

Preobra-

and certain

its

ab-

prior

the

which,

old

come organ-

presupposes

Russia.

which

the

of

accomplish.

been

class

verge

depth

last

the

must

accumulation

proletariat--which

was raw,

which

It

spe-

something

requires

correspondence

capitalist

any case--had

course

the

of

but

the

of

not

development,

economic

a mature

with

is

rudi-

the

primary

after

until

the

of

that

class

means to

wealth

sections

and which

underestimate
Lenin,

had the

class

class

lack

a chronic

physical

population

culture

the

The contrast

conception

working

as in

culture,

it

working

conscious

the

ing

of

the

of

be completed

had inherited

country

class

of
from

suffered

level
of

cannot

field

the

part

his

to

consciousness

a certain

capitalism,
In

but

Socialist

"accumulation"

adopted.

and socialist

economics

general.

culture

class.

new social

overthrow

who4e emergence

working

capitalist

to

simply

not

society

between

that

of

out
to

struggle

remains

production

by the

and control

planning

Union

of

its

the

after

Of course

capitalism

"consciously"

or

relations

of

grow up out

under

in

proletariat
fact

until

and developed.

be formed

the

culture

can only

be built

to

will

the

of

socialist

a culture

yet

Nevertheless,

regime.

under

a genuinely

such

have

that

relations

plies

create

society.

" lamented

working

not

class,

the
not

to

-53the

mention

remainder

a "pre-bourgeois

having

Lenin

went

first

think

very
defects

these

that

has not

overthrown,
of

because

deliberately,

"...

"

like

a better

this;

echoed

this
are

working

theme

at

few years
culture

both

state

draw

It

was not

to

lead

the

the

and their

an apt

masses

and economics,

would

have

to

have
This

existence

out

work

acquired

way of
the
out

that

under

the

the

In

the

would

know how.
culture

requir-

of

the

bourgeois

and the

sphere,

as in
the

A
of

industry.

revolution.

that
looking

to

transition

of

permanent

way of

pro-

lack

this

advancement

mass of

the

them.

against

proletariat

this

enemies

placed

he identified

of

Soviet

the

culture

struggle

semi-feudal
life.

They

our

Preobrazhensky

and which

theory

but

life,

social

the

"39

further

the

as achieved

do not

they

stage

would

have

the

world

at
those

of

pol-

population
what

socialism

they

capitalism.

is

why we emphasized

of

the

market,

its

the

educated.

of

cited,

proletariat

during

of

has been

In From NEP To socialism

behind

with

their

of

mind

I say culture

past.

required.

in

it

reached

developed

backward

bourgeoisie

semi-feudal

itics

should

analogy

Russian

but

the

to

yet

our

yet

is

already

impediment

in

culture,

home and abroad,

at

as we have

later,

not

disadvantage

a serious

as an actual

We could

far

bearing

regard

twenties.

to

lagged

we must

we can only

us,

that

references

"

that

although

sufficiently

for

the

which,

distant

our

not

have

throughout

which

Soviet

letariat

culture

repeated

class,

the

is

defects,

has not

the

of

apparatus
They

past,

matters

are

one.

and it

the

into

and parcel

its

serf

apparatus,

say wrteched,

combat

overcome,

these

workers...

build

ed for

there

the

build

to

They cannot

of

in

has become part

habits.

been

yet

state

or

as

-.i

in

rooted

has receded

that

a culture

what

are

culture

"Our

to

not

how to

carefully

bureaucratic

be supplanted.

to

Russia

and characterized

i. e.,

so deplorable,

"is

on,

population,

culture,

had still

" which

culture,

the

of

nor

in
the

the

previous

internal

section

disarray

of

that
the

it
state

was the
economy

-54that

incentives

and labor
level

of

tense

ed from

or how to

rate

capitalist

industry

the

the

of

velopment

of

there

had to

tives

towards

to

and relative
which
in

individual

their

efficiency

they

to

the

individual

industry

would

production

costs,

boosted

eventually

all

plant,

should
of
to

or

be fairly

themselves
work

would

plant

He advocated

worked.

addition

of

be paid

as part

of

change,

and the

of

of

in

this

move workers

a collective.
next

the

way.

work

incen-

begin

of

paying

with

the

industry

of

bonuses,
in

must
workers
output
in
where,

a section,

as they

economized

on

etc.

He hoped

that

The objective,

away from

Gradually
generation

that

workers

quality,

de-

the

maintained

collective

insofar

improved

output,

was to

clear,

all

a bonus

receive

wages would

or

with

piece-wage

line

even branch

a system

wage,

in

but

output,

the

to

was necessary

was

and facilitate

keeping

the

piece-

posed

individual

that

of

predominated

to

more in

work

away from

it

was the

trade

as he

a field

is

which

correspond

capitalist

was,

Preobrazhensky

He insisted

and that

people

Preobrazhensky

transition
ones.

the

inherit-

know how to

not

excellence--that

new wage forms

towards

of

And so it

"'

par

consciousness?

collective

did

a psychology

The question

new attitudes

be a gradual

according

in-

the

Preobrazhensky

application

mass of

'tomorrow.

NEP.
of

socialist

the

wage form

under

go as soon as possible
not

dilem-

this

of

"human material"

the

he noted,

with
and

evolution

emergence

side

came up against

War and the

while

by capitalism,

system--the

how would

Civil

manage enterprises,

'yesterday'

Soviet

situation

low

this

primarily

The other

between

connection

between

battle

40

distribution

of

From NEP To Socialism

Even communists,

"tainted

said,

wages in

of

and the

incentives.

labor

the

but

sector,

proletariat.

rectify

on the

capitalism

state

norms

country.

discussion

length

at

the

of

In his
dwelt

to

bourgeois

of

the

within

attempts

poverty

application

among the

culture

ma was that

in

the

necessitated

the

as it

a consciousness
very

workers

incentive
would

feel

-55-

responsible
but

to

the

the

individual

factory

or

to

not
entire

Preobrazhensky

it

incentives

be developed

have to

has been

in

shaped

commodity
of

organizing

labor

and the

labor,

even where

it

applicable

brought

socialist

and collective

in

the

future

to

the

to

individual

worker

for

fully

justified.

not

necessary

such

Yet

of

in

in

to

our

'collective

the

order

is

directly

to

the

raise

he attacked

the

payment
admoniinac-

the

new wages policy.

is

this

not

but

labor

of

productivity

from

harmful

indi-

of

His

even where

relations

we

of

work. "42

of

sort

pro-

a transition

instead

same passages
any

in

method

as certain

of

to

new stimuli

a combined

job

of

new sys-

intensified

are

as

piece-wage

on the

in

worker'

they

spirit

Undoubtedly,

to

an individual

the

"the

people

economy

go over

capitalist

in

of

heaven;

in

as a brake

act

stat-

human nature

of

that

and we can regard

the

from

re-education

to

implementing

copy

the

inequalities
There

favored

and cultural

economic

strategic

tle

capital

renewal)

the

workers

in

for

were,

and those
these

could

or

could

were

return

to

whose productivity
would

earn

Others

different

very
full

some

would

between

inequalities

that

noted
only

eliminate

class.

working

instance,

(those

enterprises

each of

the

Preobrazhensky

thinking

wage payments

of

within

importance,

his

of

stages

forms

remain.

economically

early

transitional

inherent

inevitably

special

copying

even

such
the

fel-

their

"

standpoint.

that

often

drop

technically.

In
in

leadership

the

"We undoubtedly

where

payment
of

were

only

the need

payment

of

to

The New Economics,

do not

education

elements

up against

vidual

tion

is

in

He warned

moment begin

tem of

tions

remuneration,

i. e.,

re-education

"

production.

a certain

as the

labor

economy,

may at

are

private

production,

prolonged

system

portion

of

argument

to

through

relations

collective

this

repeated

"socialist

that

branch

and their

41

low workers.

ing

job

more
had

productive,
output

was low.
incomes

with

lit-

Obviously
so long

as

-56norms

equal

were
between

equalities
ferent

needs,

was the

basic

and unskilled

the

incentives

labor

tors

the

of

overcome

economy--that

is,

the

Preobrazhensky

genuine

not

considered

entered

into

from
ducing

sexual

conduct

the

all
pass

gainst
al

their

sexual

just

political
questions:
and 2)the

the

of

that

society

out,
and

economic
the

have

would

secto

of

course

the

the

however,

concern
1)Social

to

that

of

the

the

its

out

once
social

educating

economic

individuals
not

that

introAs for

own patterns

question

of

of

the

would

cease

A-

to

personfamily
be of

importance

and rearing

and political

to

truths.

political

problem

of

was made
tended

people

the

be dictated
of

The matter

fact

per-

Preobra-

children.

he gave paramount
for

purely

problem

of

had

which

that

the

these

children,

relations,

were

and could

transition.

from

responsibility
question

work

dealing,

socialism.

relations

as universal

Thus

society.

for

upbringing

maintained

of

which

solve

by the

preferences

raising

aspects

which
In

Norms.

those

taste

of

would

was divorced

relations

sexual

family,

the

as sexual

struggle

could

society

to

and those

social

and

relations,
in

type

questions

personal

related

overall

such

between

such

education

and particularly

women.

the

Preobrazhensky

this

pointed

between

and Class

behavior

the

affect

more complicated,

off

in

as a whole

regard

on morality

consequences

provided

sexual

with

distinguish

to

that

collective

personal

skilled

wage payments

lay

solution

economy

personal

actually

were

outside,

in

of

political

zhensky

Preobrazhensky
of

there

course

between

proportionality

similar

about

be careful

and did

sonal

was very

questions

public

who had dif-

And of

division

in-

exist

poverty.

wrote

with

but

same,

methods

Their

them.

the

the

transitional

of

solve

in

to

continue

workers.

inequalities,

These

greater

basic

be paid

all,

of

its

one had to

of

would

single

attainment

The situation

he said,

inequality

to

and the

growth

versus

capacity

there

who would

married

workers.

beyond

went

workers

e. g.,

most

Likewise

applied.

to

two

children

liberation

of

-57Preobrazhensky
of

between

equality

and raising

in

communists

and bringing
socialist

of

generations
that

these

could
family

the

said,

the

with

be shared

is

This
here

posed
ize

education

If

and child

rearing,

until

time

such

in

line

But

in

did

not

the

quired

the

between

Union

of

free

qualitative
possible,
sufficient

this
to

resources
the

sexes
have

choice
break

bourgeois
not

wealth.

of

was
social

Preobrazhensky
children,

raising

must

of

to

the

until

behavior
the

taste"

because

it

and family

as under

capi-

non-politi-

essentially
not

pol-

relations

personal

could

their

organization.

function,

modes of

be possible

personal

Precisely

education,

social-

"personal

and social

happen.

a social

lose
of

to

he

between

relations

extent,

new types

dilemma

the

enough

wealthy

personal

and experimentation

and would
economic

were

been relegated

with

Union

forms

but

matter,

economic

retained

future

produce

responsibilities

as questions

socialize

new,

43

the

not

could

would

society,

Soviet

of

unit

a significant

of

to

fact,

this

these

society

continue

new forms

other

the

as

education

the

and such

the

had evolved

as society

What should

realm

terially

Soviet

have

talism.

a real

its

with

relations

cal

They would

character.

left

then
to

in

as wo-

society

of

order

fact,

in

fully

social

in

Given

household

the

least

at

exist,

women and men.

revealing.

men and women would,

itical

the

of

aspect

as a primary

Preobrazhensky

where

is

continue

between

equally

not

in,

Ideally

other

embryonic.

within

participate

system

educat-

so long

not

could

principle

of

who were
that

The problem
did

burden

obvious

be needed

would

remain

that

result

every

the

and social

major

reconstruction.

cadre.

would

quite

they

As in

resources

only

is

a comprehensive

socialist

the

women workers,

It

social

education

material

education

of

afford

of

upon

defend

must

responsibilities

could

household

up children.
forms

sharing

men.

the

task

to

enough

in

fall

than

to

the

communists

no circumstances

off

tied

men remained

that

sexes

children

worse

materially

be rich

the

Under

obligations.
ing

insisted

Once again

be.

was not
society

ma-

had ac-

-58Of all

the

examples

show how closely

the

consciousness

politically

important
life

the

of

Preobrazhensky

Here

undoubtedly

party

(again

and the

This

Left

clearly
at

first

the

government

missable

during

operated

under
to

resort

gle

and keep

to

drew

period

of
of

between

the

movement

intact.

ing"

the

working

And it

self.
working

what

of

would

was here,
that

class

legacy

class:

the

capitalism

happen

if

It

to

had to

matters

On the

When you had,

as he described,

statistics

no sense

of

one hand,

and tables

responsibility

what

might

have

than

begin.

for

economic
people

in

the

within

veracity

of
of

course,
their

and

of

the

pernici-

prognosis
sphere

is

of
most

be impossible.

apparatus
and simply
word,

it-

party

vanguard

this

state

strug-

"re-educat-

of

would

the

party

the

especially

efficiency

as a matter
the

drift

per-

class

working

Preobrazhensky's
to

which

been unavoidable

within

this

com-

members had

advance

and among the

do away with

less

is

which

a question

problem

party

continued

interesting.

ricating

to

was a serious

effort

fight

conduct

obviously

the

sur-

When the

order

more

the

hardly

members and

and that

within

ranks,

political

in

relations

inside

is

between

But

par-

inequalities

distinction

and lies

was far

party

as a more or

revolution,

the

of

in

one another

then

ruses

most

ailments

party

clandestinity

of

This

of

construction.

kinds

communists.

the

socialist

all

in

the

the

hand with

propensity

the

Norms).

within

work

deceive

before

two

attack

Preobrazhensky's

same time.

and

and Class

material

in

behavior

discussion

with

the

of

poverty,

and deception

this

officials

conditions

way to

hand

these,

the

On Morality

went

was now impermissable

then

ous

of

of

may have been necessary

in

to

writings

patterns
country's

associated

Preobrazhensky

mon practice,

the

early

Preobrazhensky's

lying

of

aspect

was preparing

As to
other

it

since

prising,

to

his

of

bureaucratism

emerging

and privileges.

to

out

went

The pervasiveness

ticular:

the

is

these

bourgeois

of
linked

were

from

cite

persistance

bourgeois

internal

we could

the

fabhaving
economy

-59not

could

simply
lead

to

ing

class.

the

institutionalized

the

center,

light

development

of

Related

the

to

the

the

levelling

had to

question

given
went

material

the

within

party,

to

sustain

the

of

a bureaucratic

to

lying

and corruption

of

from

start

party's

habits

and work-

Here

directly

and

level

plant

insight.

living,

to

again

impeding

and not

from

party

the

exceeded

what

cadre,

matermachfor

the

any analysis

of

cries

that

be achieved

some abstract
on the

of

and state

reactionary

actually

attack

important

most

the

was that

arguing

could

what

had far

and deception

he termed

make a strong

which

from

passes

party

only

development

subsequent

within

what

standards

conditions,

however,

on,

of

rejected
of

the

of

could

economy.

question

graft,

Preobrazhensky

blanket

that

bourgeois

worst

a socialist

inequality,

ine.

Union's

behavior

such

ranks

Preobrazhensky's

we can appreciate
of

the

within
Soviet

the

of

hand,

other

misinformation

was an instance

ial

On the

demoralization

profound
In

function.

in

the
He

principle.

growth

was called
and which

of

inequality

for
posed

by the
the

need

danger

degeneration.

Thus as regards
the situation
the working
as a whole
class
within
inequality
is in essence
this
protest
against
against
a protest
is
This
the fact
that
socialism
protest
grows
out of capitalism.
if
bourgeois
for
basis
lies
reactionary
at its
a petty
a striving
It
takes
equality
which
no account
of production.
of the needs
it
to the extent
that
on
a protest
can be progressive
represents
the part
of the growing
of the workers
socialist
consciousness
the residue
above
against
of capitalist
and is directed
relations
forms
in no way arise
those
out
all
against
of inequality
which
inequality
This
the
of the necessities
within
of production...
its
of
communist
of
certain
party
and the privileged
position
layers,
beyond
the bounds
physical
which
goes far
of the purely
from
important
exhaustion,
protection
of the party's
cadre
most
is extraordinarily
harmful
it
to
in that
to a struggle
can lead
these
to the ossification
of the
maintain
privileged
positions,
degenbureaucratic
the
tissue
the
to
to
of
party,
and
careerism,
[chinovnichee
layers.
eration
party
of certain
pererozhdenie]

This process
be all
the more dangerous
numbers
as increasing
will
the party
leading
of newly-trained
posts within
youth pour into
an opposition
and Soviet
apparatus
encounter
and as these forces
dictated
by the interests
that isinnoway
construction.
of socialist
It

is

worth

was the

fact

observing
that

these

that

what

youth

Preobrazhensky

who did

take

did

up party

not

warn

and state

against
jobs

here

44

-60not

would

socialist

of
ratic

be trained

necessarily

" but

construction,

structure

they

where

themselves

would

would

defend

to

and educated

enter

into

to

defend--a

learn

enjoy--and

interests

"the

a bureaucprivileg-

ed position.
The unifying
internal

was in

in

is
In

these

towards

compelled

development.

in

borrowed

were

encirclement,
just

it

internally

itself,
to
had/distribute

but

to

produce

strictly

did

produce

for

to

capitalist

ing
treat

this

tem,

in

because

political
ace,
defend

that

the

its

resources

some detail.
he was using

these

and fortify

inside
problems
a very

with
were

"descriptive"

would
basic

socialism,

but

party,

be overcome.
Marxist

His

principle

by its

worked

not
And

same time,
power

even where
largely

accord-

did

really

aspects

and analyz-

advocate

actually

at
aim,

sys-

hypothetical-

largely
to

not

Soviet

the

of

even be-

not

could

or-

which

markets.

individual

he assumed,

it

upon

industry

contradiction

accounts

of

and to

labor

he was speaking

production,

production

It
the

was

own paths

1924 Preobrazhensky

its

identified

the

At

organize

Up until

Because

its

as

sector
of

imposed

State

material

contradictory,

of

accordingly.

had to

his

satisfy

The state

organize

or

human need.
it

to

and international

peasant

as an integral

he had both

position

past

for

methods.

to

and abroad.

for

The German

socialization

incompatible

capitalist

itself

antagonism

although

ed them
ly,

both

in

section.

forced

were

its

process.

self-consciousness

was also

class

reconstruction

was clearly

greater

and
could

working

and again

organized

preceding

greater

from

time

Union

planning,

ways that

for

so it

it

Yet

labor

ganize

greater

towards

and ultimately

the

the

over

to

refer

the

and where

emphasized

Soviet

the

show in

to

control

they

problems

scarcity

way he is

by the

terms

the

family,

the

examples--wages,

of

of

as Marx

molded

we attempted

none

exercise

consciousness,

needs.

gin

that

to

these

all

an environment

a position

Ideology,

of

life--is

party

be resolved

Man's

thread

least

on the

we think,

within

the

surfwas to

party:

-61development

Socialist

and political

nomic
of

in

both

Union

prerequisites,

industry

and agriculture

the

"human material"

of

shaping

Soviet

the

is true
It
institution

had certain
the

specifically

fundamental
industrialization
but

and a simultaneous,
had to

that

carry

eco-

dependent,

this

out

re-

task.

that

in this
[the
matters
advanced
very
slowly
respect
because
of the collective
the triumph
wage system],
of the new form
of wages was closely
connected,
as we have already
in the level
said,
with
a growth
of culture
and consciousness
of
in a few years.
the working
How difclass
which
was not attained
ficult
in this
direction
the fact
was the advance
can be seen from
45
have
distribution.
that
Here it
we
still
not acieved
communist
is a question
in the expectathe human character
of transforming
tion
that
there
will
come to be done by instinct
what was formerly done by compulsion
or by the promise
of material
reward,
or
The
else
was an act of collective
enthusiasm
and self-scrifice.
by another,
replacement
of one generation
and a new system
of edbefore
the new collective
ucation,
was needed
man could
replace
The
the individualist
of the period
of commodity
production.
incentives
in the working
become dominant
moment when collective
individual
incentives,
is a triumphant
class,
as compared
with
importance
for
the
moment in the building
of socialism,
of no less
46
future
than
the socialization
of the instruments
of production.

Preobrazhensky

this

repeated

in

theme

On Morality

This revolution
in public
opinion,
is connected,
has
norms of behavior
in those
construction
of socialism
habits,
his instincts,
class
norms,
in
the beginning
of this
revolution
industry
Now
the
worker-organizer.
it deserves,
to acquire
the worker
47
ist
industry.
It

For

passages.
ist

movement

working

in

class

dangerous
ductive

time

with

factor.

of

the

counterposed

class)
working
to

in

the

Marxist

means of

"

introduces

of

and the
class)

consciousness.

the

so-called

production
"subjective
in

revolutionary

a specious

and the

historical

factors"

(i. e.,

Such formulations

perceive

the

as a so-

and politically

factors"

"objective

Trotsky"the

latter

the

politics.

the

these

equate

to

and to

from

of

and in

movement,

production,

and apart

This

importance

the

been a tendency

outside

between

forces-qua-means

working

the

as standing

dichotomy

overemphasize

has

Norms:

in
with which the revolution
The
a colossal
significance.
areas which concern
man, his
begins
this
construction
with
the psychology
of the average
begins
state
of the workers'
without
whom it is not social-

to

there

particular,

"subjective

called

ness

a long

forces"

productive

the

be difficult

would

and Class

(the

proof

presence
the

conscious-

Thus
beg the

being

questions

is
of

-61ahow this

way in

the

to

ship

means of

care

of

zhensky

of

between

relation

the

level

both

terminology

in

Preobrazhensky
the
of

working

on the
of

forces"

This
is

stages
is

passages

cited

and its
is

and the

but

way it

is

include

therefore

we have

Otherwise
through
to

which

force.
of

"

Quite

the

human labor

consciousness
true

under

is

that

contrary.

It

that

one of
socialism,

its

is

the

the

activity
means
as

productive
of

class

the

parti-

pass.

consciousness
class,

working

a productive

defining
where

is

means

and not

level

class

of

the

with

the

others),

the

that

struggle

class

maintain,

power,

to

of

of

his

of

activity

differentiating

and the

capitalism

the

and its

no way of

49

numerous

as an active,

proletariat

as some Maoists

say,

especially

the

to

relation

"development

the

about

to

productive

usage

synonimous

proletariat

Preobra-

the

his

between

not

Trotsky's

proletariat.

consciousness

are

statements,

development

the

addition

in

take

1927 article,

and in

organized

and its

the

(in

need

will

Although

and the

duality

forces

encompass
Any talk

embodiment
class

this

it

conception

defined

carefully

above

such

impeding

sense

denied

one hand,

48

and his

production

the

"a productive

as the

This

not

means of

of

different

consciousness

he elsewhere

the

history;

and events

and praxis.

The New Economics

class

class

legacy--although

an altogether

in

working

in

revolution

made a number

linguistic

consciousness.
cular

himself

a formal

agent.
must

of

the

development

of

moment

relation-

around

the

stage

any given

necessity

The productive

production,

the

contained

of

on the

other.

a passive

at

organized

excludes

political

explicitly

production,

defining

in

class

it

unfortunate

both

as embracing

Therefore,

same time

forces,

productive

forces

the

and its

place
is

class

consciousness

both

referred,

rudimentary

working

Trotsky

implicitly

first

the

the

the

a rather

own politics

in

attained

of

themselves.

has left

formed

actually

have

be "convinced"

the

in

agent

only

the

At

forces

productive

of

which

production.

as an active

which

is

consciousness

force,

characteristics.
development

of

class

-62consciousness

Socialism

state.
of

the

but

in

whole,

that

ously.

If

alone--no

the

development

terms

of

is,

the

the

lack

aspects

to

is

class's

relation

lective

man, " as Preobrazhensky

to

tion

socialism

Impossibility

The

III-c.

Although
on the
the
ful,

at

the

Soviet

least

by this

an almost

strict
dead

conditions.

itself

the

fore

caught

ture

with

of

then

in
the

foodstuffs

his

turned

resources
backward
a vicious

technical

from

sector

works

means to

and agriculture

transi-

position
and

consciousness
it

is

doubt-

he considered

that

en-

contradictions
from

these

him to

have

years
the

pose

not

Soviet

give

sustained

could
out

of

industry

socialism,
under

Sov-

itself

revolutionize
Yet

economy.

it

for

was impossible

this

could

the

lift

the

Marx's

precondition

agriculture.

could
for

caused

Industry

cirLte.

and raw materials

His

that

of

new col-

terms.

all,

after

"the

emerge,

1922-23,

was the

on showing

if

great,
working

existence,

specific

economic

industrialization

not

the

of

too
the

between

the

them that

is

and defended

of

writings

simultane-

Country

and social

solving

in

One

connection

to

Industry,

most

production;

upon

of

logicality

sufficient

without

insisted

economic

society

as a

flounder.

up and will

In

a view--

forces

a way that

does

Socialism

such

development

the

such

it,

inter-relationship.

that

iet

from

end primarily

Allowing
argument

man's

incapable

Union

his

of

judging

gendered

Union's

of

take

conversely,

in

called

and organic

basis

material

development

forces

if,

or

structured

Preobrazhensky

indissoluble

the

of

productive

exist

be bottled

will

of

productive

between

the

of

do not
them

workers'

could

the

of

correspondence

resources

material

the

and human resources

material
of

aim of

as consisting
Marxist

production

human and technical

the

be conceived

cannot

means of

only

be a consciously-articulated

must

agriculture

was

The economy was there-

its

agricul-

provide

not

semi-feudal

adequate

neither

accumulation

methods

in

the

state

-63sector
tion

nor

that

way out

for

the

Soviet
in

consciousness

Soviet

he considered

ed what

ively-increasing
ied
of

in

socialist

in

time

of

purchase

means of
for

automatically

producPreobra-

West was the

capitalist

the

was in
the

to

change--not

role

the

problems

central

basic

among the

between

conflict

only

of

socialist

socialist
which

would

detail

in
of

or

culture

and
within

Preobrazhensky

"automatic,

production

detail-

quantitat-

relations"
and "the

accumulation,
be retarded

extracts

contradictions

that
the

first

the

of

began

The New Economics

primitive

relations"

publication

analysis

reproduction
law of

the

almost

advanced

now occupied
It

society.

the

this

but

even in structure,

the

to

needed

Union.

1924,

The New Economics,

a size
followed

in

revolution

Beginning

class

of

The conclusion

abroad.

zhensky

of

fund

an export

by the

embodquality

demands of

accumulation.
The law of primitive
in so far as it regsocialist
accumulation,
the level
ulates
of wages in the state
economy, conceals
within
itself
As the law which expresses
an internal
contradiction.
all
increasing
the conscious
tendencies
towards
the tempo
and elemental
in collective
of expanded reproduction
state
economy, it is thereby the law of development
of socialist
relations
generproduction
But, on the other
hand, as the law of the restriction
ally
of
.
it restricts
the
wages in the interests
of socialist
accumulation
tempo of transformation
the consumers'
ration
of the
of wages into
in socialist
worker
ever since
economy, a transformation
which,
have been socialized,
is assisted
by a
the instruments
of labor
increase
in wages, because that
leads both to the divorce
rapid
of wages from the value
preof labor
power and to the material
for the development
condition
proletarian
culture.
of socialist,
from its
This internal
entirely
contradiction
of the law results
historically
The tendency
to overcome the
transitional
character.
is,
the quality
to intensify
the tendency
category
of wages, that
of production
with the tendenrelations,
contradiction
comes into
of the state
econocy to quantitative
extension
of the territory
form,
is,
in
that
their
my and its production
relations
present
in
low stage of development
production
relations
at an extremely
Already
their
the term "primitive
socialist
socialist
character.
dual nature
the adjecthis
of the law;
accumulation"
expresses
"socialist"
tive
comes into
with the noun "accumulacontradiction
but also in the
tion"
to which it is bound not only grammatically
SO
historical
real
process.
Just

after

"Economic

this,

Preobrazhensky

Equilibrium

in

the

was to
System

of

go even
the

further,

in

USSR" (VKA 22),

the

article,

which

we

-64have

lags

culture

to

ously

behind

the

further

led

to
is

a modern

footing,

the

development

the

economy,

development

while
of

de sac"

being

able

the

latter

is

it

is

only

itself

to

the

important

out

the
the

of

"51

keep

context
if

obvi-

the

of

the

pro-

economy

on

a prerequisite
there

clearly

circle

This

culture

same time

to

the

of

can become an obstac-

of

then

socialist

forces

reconstruct

at

within

of

forces.

level

culture,

break

not

productive

the

raising

Yet

could

the

growth

productive

for

had relevance

isolation--it

the

lag

the

socialist

way forward.

possible

of
this

of

If

a condition

development

the

"cul

of

"If

occasions:

an impasse.

letariat

for

on several

sector

collective
le

to

referred

was no

in

mind

that

of

the

Soviet

left

the

its

to

Union's
own

resources.
This

aspect

zhensky's

various

and elaborates
Even the

latter

wonder.

For

here

pages

The New Economics,

time

a statement

ative"

politics,

an unmistakable

of

of

analysis

about
to

while

the

be done

if

theoretical

of

politics

be sure,

in

that

to

the

it
is

socialism
depth

polemics

against

is
to

this

in

political
Preobra-

the

economy,

transition.
largely

small

that

in

step

con-

is

at

the

It

is

a "neg-

an attack

be possible.

text.

main

undertone--and

a tentative

book

strands

he refines

that

these

contained

Soviet

the

to

meshed together.
a highly

polemical
being

inaccessible

is

through

theory

consistently

a theoretical

roust not

basic

is

the

of

analysis

and political

inextricably

to

gen-

proletariat.

economic

devoted

are

were

Western

abstractness,

and it

many points
this

the

its

of

opponents,

has

that

his

mirrored

em-

and his

relations

concluded

had become

spite

its

it

the

of

is

Preobrazhensky's

with

production

he also

intervention

in

half

Nearly

work.

of

As such

argument

The New Economics,

consistent

which

essential

Preobrazhensky's

what

course

socialism.

the

without

What is

structing

of

contradictions

solution

of

of

conception

industrial

was

"qualitative"

on the

phasis
eral

argument

But
none of

same

against
there
his

is
earlier

-65possess,

works

that

struggle

to

obrazhensky
means for

of

division
ing

of

and the

the

the

was concurrently

and a cause

its

of

First,

the

of
generalization/knowledge

result

of

it

by locating
within

how the

political

failure

to

continued

with

the

question

abolition

of

throughout

the

these

effect

economic

Pre-

compelled

industrialization

of

this

consciousness

by the

same time.

purpose

He did

out.

class

this

at

consequences.

and by demonstrating

class,

tasks

it

carrying

labor

of

link

explicitly

development

the

a head

had two

this

be explained

can only

to

was coming

Theoretically

the

that

something

the
work-

two

backwardness

prolongation.

[the
divisions
the working
situation
and inequalities
within
is connected
the heterogeneity
class]
with
of the working
class
its
heterogeneity
in techthe management
as regards
of industry,
The new system
training,
nical
organizing
abilities,
and so on.
heterogeneity
from capitalism,
this
receives
as a legacy
and it
it
can abolish
gradually,
as the productivity
of labor
rises,
as
the cultural
training
and technical
of the entire
mass rises
on
the basis
of the new educational
system and the development
of the
democracy
in all
system
of workers'
of leadership
and
spheres
finally,
management;
on the basis
of a quite
struggle
conscious
The existtendencies
toward
against
conservatism
and stagnation.
ing material
inequality
slowness
of the rise
and the comparative
to the level
of the general
of the ormass of the working
class
from
the present
ganizing
cadres
of production
result
not
structure
in spite
they
relations,
and they
will
persist
structure,
of this
be abolished
is eliminated,
division
by occupations
as the hard-set
is abolished,
as the gap between
as there
passes
science
and labor
"enslaving
to the diviaway that
subordination
of the individual
from
Marx
" inherited
bourgeois
sion
of which
of labor,
so_ety,
in his Critique
Program.
spoke
of the Gotha
This

So long

as the

supercession
to
the

division

the

working

class

Transcending

the

economic

problem.

means of

production

the

labor

was so ephemeral,

characterize

tem of

of

proletarian

differentiation

social

towards
division
In

the

between

in

relations

labor

of
first

the

is,

before

and before
skilled

both

then,
a certain

case,

there
the

would

could
country

and unskilled

continue
of

progress
be cut

short.
and an

a political

development

of

the

be a general
could
workers.

its

towards

would

USSR, and the

consciousness

socialist

movement

and fetishism

reification

was required
education

and the

persisted

sys-

do away with
Only

then,

-66for

instance,

as do away with

the

divisions
the

If

transition

the

fact

for

is

entire

lution

period
terms

the

mediately

are

it--to

labor
without

quired

class
its
ledge

how highly

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-69-

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the

Soviet

of

the

itself

have

that

the

Soviet

the

By 1923 it

transitional

ten-

acquired

was unlikely

Only

so.

to

ascendancy

have

could

done

Union

socialist

gained

process.

could

overseen
in

have

only

this

beyond

The inherently

proletariat

class

have

socialism

could

over

working

could
to

the

control

Soviet

West.

capitalist

if

led

necessarily

economy

value

political

proletariat
have

we are

the

Western

that

process

might

USSR.

***

This

concludes

Preobrazhensky's
method

would

certainly

our
theory

have

as long

as the

the

essential

another

aspect

of

attention:

commodity-socialist

the

of

required,

lustrate

inadequate

all-too-sketchy

account

transitional

one.

components

of

Preobrazhensky's
His
economy

of

the

of

our

USSR during

Preface,

chosen

of
his

to

a thesis
try

We will
have

which

expanding

backgound

To elaborate

instead.

writings

analysis

in

We have
it

the

society.

as we cautioned
present

of

also

and il-

now turn
received
in

reproduction
the

to

New Economic

the
Policy.

NOTES TO INTRODUCTION

1.

For the background

and Preobrazhensky's
of the 1923 Opposition
(London,
1959),
Isaac
Deutscher,
Prophet
Unarmed
The
role,
see
London,
(Pelican
E. H. Carr,
The interegnum
edition,
pp. 113-34;
1969),
the
Chapters
13 & 14, plus the "Note, " pp. 374-80,
giving
text
reservaas the various
of the 46" as well
of the "Platform
Opposition
"The
Left
S.
Law,
David
tions
of its
and
signatories;
For the Opposition
in 1923, " in Critique,
No. 2, pp. 37-52.
of
(Pelican,
1970),
Vol.
1926-27,
Socialism
In One Country
see Carr,
iv
Chs.
&
Deutscher,
I, Part II,
19;
Vol.
II.
Ch.
v.
op
cit,
and
and

2.

From NEP To Socialism

Pearce.
For Spulber's

3.

in
Of these the most important
Erlich,
Alexander
by
an article
are
in the Quarterly
Feb. 1950, pp.
Journal
published
of Economics,
57-88 ("Preobrazhenski
Soviet
IndustrializaEconomics
the
of
and
tion"),
Debate (Cambridge,
and his book The Soviet
Industrialization
1960).
Mass.,
See also Spulber,
for Economic
Strategy
Soviet
Growth (Bloomington,
1964);
Alec Nove, An Economic History
of the

(London,

1973),
also translated
see Note 3 on page
anthology,

by Brian
13, above.

-75USSR (Pelican,
1972)
Introduction
to The New Economics;
and Nove's
Day, Leon Trotsky
and Richard
Isolaand the Politics
of Economic
(Cambridge,
1973)
tion
and "Preobrazhensky
and the Theory
of the
Transition
Period,
" in Soviet
April
Studies,
1975,
196-219.
pp.

4.

Erlich,
draft

In 1932 Preobrazhensky
Debate,
for a
p. 59.
was attacked
he had submitted
of an article
to the journal
Problemy
Eko"0 Metodologii
Sostavleniya
Genplana
i Vtoroi
entitled
nomiki,
Pyatiletki"
("On the Methodology
Plan
of Drawing Up the General
Plan"),
in which he allegedly
and the Second Five-Year
asserted
industrialization
the current
that
push was being hopelessly
misbeing suffered
the disproportions
managed, but that
were inherently inevitable
in a peasant
trying
to industrialize
country
on its
The polemic
his old posown.
accused Preobrazhensky
of reviving
ition
that
the only condition
Union could
under which the Soviet
avoid such disruptions
would be with the "victory
of the proletarian revolution
in other
" The article,
countries.
which Erlich
to in another
The attack
refers
context,
was never published.
in a
on Preobrazhensky
appeared
his
book Zakat
(The
Kapitalizma
1931).
See Zakat
Kapitalizma
v
in the Trotskyist
of Capitalism

S.

collection
of essays
criticizing
Moscow,
Decline
of Capitalism,
(The Decline
Trotskistkom
Zerkale
Moscow,
1932),
52-58.
Mirror,
pp.

A comprehensive
Marxist
critique
of Day's book is sorely
needed,
Like so many bourgeois
take up here.
something
we cannot possibly
industrialization
Day seems to think
that
scholastics,
and socialism are one and the same thing.
he reduces
As a result
the debates
to disputes
of the twenties
over the course of economic policy,
the political
while
sides,
not to mencontent
of the
contending
tion
their
underlying
goals and philosophical
premises,
count for
In Day's case he has not only seen fit
to squeeze the
nothing.
debates
into
the constricting
of bourgeois
categories,
aperture
but has even invented
Trotsky's
supposed
of his own, viz.,
a couple
"integrationism"
" The results
"isolationism.
vs Stalin's
are
bloc with Lenin is "explained"
Trotsky's
equally
completeunique.
for example,
ly without
to the Georgian
while
reference
affair,
himself
Trotsky
winds up as some sort
of liberal
market socialist.
It is interesting
Trotsky,
Day, unlike
Preobrazhensky,
that
or
between the Soviet
treats
the inter-relations
others
of the Left,
techentirely
economy and the world division
of labor
as something
i. e., a mere balance
nical,
quesand exports,
without
of imports
the
tioning
these would be, given that
what type of relations
world market was capitalist
and trade
relations
could only take
jeopardizing
the basis
place under very severe constraints
without
As for his discussion
of the Soviet
of Preobrazhensky,
which
state.
is our main concern
(pp. 145-48 of Day's book),
we wish to note
in the space of just
that
over three
pages Day manages no fewer
theoretical
than five
of Preobrazhensky's
major misrepresentations
in fact,
basic,
that
they cause us
and political
standpoint--so
he
if
had
to honestly
the
Day
refers
sources
read
wonder
actually
in"placed
Day, for instance,
Preobrazhensky
to.
that
an
claims
the imporordinate
stress
and ignored
on internal
accumulation"
tance of the world market.
We find
this
strange,
rather
accusation
the
Preobrazhensky
that
since virtually
every piece
wrote during
between
twenties
the necessity
stressed
of maximum inter-relations
the Soviet
economy and the world division
so long as
of labor,
these did not threaten
the socialist
ecoof the state
character
The need for these connections
does not mean that we can
nomy.
in any way deny the primacy
in the
accumulation,
of internal

-76in the West.

absence of revolution
We will
deal with both the
behind this
political
in the rest
and economic reasons
of the
thesis,
Day also asserts
and need not go into
them here.
that
Preobrazhensky
favored
a policy
of high industrial
prices,
and
his capitulation
attributes
to the Stalin
camp to the latter's
line.
We find
adoption
of this
this
charge equally
as astonishing
Preobrazhensky
as the first,
since
consistently
advocated
precisely the reverse--and
Day could
fail
if
he has
to know this
only
Preobrazhensky.
from
Aside
not read
The New Economics,
the
where
industrial
imporvements
need to lower
in productivity
prices
via
(a policy
Day ascribes
is a major
to Trotsky),
solely
theme,
see
(Economic
Krizisy
Ekonomicheskie
Pri
NEP'e
Crises
Under NEP, 1923),
in step
where he also
advocated
raising
agricultural
prices
with
in the possibilities
for
expansions
marketing
agricultural
products
Perhaps
distortions
the worst
is the way he panabroad.
of Day's
in the most revolting
ders
fashion
"criticisms"
to the Stalinist
he advocated,
in Day's
that
of Preobrazhensky
which
alleged
words,
"exploiting
just
the peasants
its
as a metropolis
exploited
col"
To refute
"argument"
this
both
onies.
particular
we merely
refer
Day and the reader
to a book entitled
The New Economics,
especial85-88,
ly pp.
We should
in his
Day,
Soviet
and 227-31.
add that
inaccuracies
Studies
textual
article
rectified
most of these
while
holding
Preobrazhensky
had accommodatto his
thesis
that
original
in one country
(citing
ed to the "theory"
of socialism
as evidence
from his
detailed).
book that
the same pages
Since
we have just
Preobrazhensky
in 1927 (in
"Economic
Equilibrium
explicitly
stated
in the System
in one country
of the USSR, " VKA 22) that
socialism
Day has to skirt
by claimthis
was impossible,
around
minor
point
ing that
incomplete"
these
to allow
statements
any "defwere "too
initive
judgement"
The fact
that
of Preobrazhensky's
position.
Preobrazhensky
had held
the same "incomplete"
throughout
the
position
it
(see Note 4 above),
twenties
and,
would
appear,
even after

In this
to Day.
the latter
seems to matter
very little
article
has become a kind of Trotsko-Maoist,
"unities
of opposites"
seeing
It is what we might call a W. H. Smith Dialecalmost
everywhere.
tic,
strongly
remeniscent
of the brand of "marxism"
generally
from one's
local
Day to
Though allowing
available
newsagent.
be more textually
it affords
him little
precise,
additional
underto what
twenties
standing
either
of Preobrazhensky
or the Soviet
is contained
in his book.
6.

One of the finest

examples of this
was in the field
of cognitive
See L. S. Vygotsky's
psychology
and linguistics.
pathbreaking
work
(English
Mass.,
1962;
Cambridge,
Thought and Language
translation,
in Russian
i Rech',
Moscow, 1934)
originally
published
as Myshlenie
issues
taken up in
which bears directly
upon the philosophical
Introduction
below.
this
and in the other
works
cited

7.

See

Georg

8.

See

Sidney

Lukcs,
(London,
1970)
ConLenin
and History
and Class
(London,
"
1971);
"Marxism
Karl
Korsch,
sciousness
and Philosophy,
"'
State
'Marxism
and "The Present
of
and Philosophy,
of the Problem
both
in Korsch,
(London,
1970);
Antonio
Marxism
and Philosophy
Gramsci,
(edited
by Quinton
Selections
From the Prison
Notebooks
Hoare
1971),
Nowell
Smith,
London,
and Geoffrey
as well
as the
(New
much shorter
Prince
the
title
Modern
anthology
The
of
under
York,
1957),
in
included
important
which
contains
essays
not
some
the Prison
Notebooks.
Hook,

Towards

the

Understanding

of

Karl

Marx

(London,

-771933)
(Ann Arbor,
1962,
to Marx
and From Hegel
originally
published
in 1936).
Hook is probably
American
Marxist
the only
philosopher
Strongly
influenced
by the pargmatist
of any distinction.
school,
his
line
two books
tread
between
the fine
that
certainly
exists
important
It was undoubtpragmatism
and certain
aspects
of Marx.
his
led Hook to dwell
that
edly
pragmatism
on the practico-active
influenced
by the publication
of Marx and to be so strongly
side
For Sweezy,
of The German Ideology
and the Theses
on Feuerbach.
(New York,
1968),
Development
see The Theory
of Capitalist
p. 20.

9.

Colletti,
(London,
1972) and Marxism
From Rousseau to Lenin
1973).
Leszek Kolakowski,
Marxism and Beyond
and Hegel (London,
(London,
1971),
in particular
"Karl
Marx and the Clasthe essay,
Definition
sical
of Truth, " although
other
essays in the book are
important.
Of all
here,
is
Kulakowski
the sources
we have cited
Yet one should not
the weakest,
perhaps
as we point
out below.
his work obviously
has, particuthe importance
that
underestimate
intellectuals
larly
Marxist
as part
of the "revolt"
of the Polish
Stalinist
1956.
Kolakowski's
analysis
of
against
orthodoxy
after
Eastern
the difficulties
of mounting
a left-wing
critique
within
is an insightEurope (in the essay "Responsibility
and History")
ful antedote
in Stalinism
to the usual
anti-communism
of dissent
Unfortunately
Kolakowski
champion that
regimes.
was to eventually
he had attacked
in his days as a Marxist.
same right
wing that

Lucio

10.

Since the degeneration

of the Marxist
movement was one of the cenMarxists,
by post-Russian
Revolution
tral
to be explained
problems
It would be impossible
the
to list
this
all
was not surprising.
The
to this
subject
among these and other
writers.
references
"The Marxism of
Lukcs,
would be the following:
most important
Observations
Rosa Luxemburg"
on Rosa Luxemburg's
and `Critical
"' in History
'Critique
Revolution,
and Class Conof the Russian
(Note
7 above);
by
Korsch
the
two
cited
already
essays
sciousness;
Hook, Towards the Understanding
Gramsci,
Notebooks,
pp. 322-472;
"Karl
Marx and the Classical
of Karl Marx, Part I; Kolakowski,
"Bernstein
Definition
and the
and Colletti,
of Truth, " in op cit;
" in From Rousseau to Lenin.
Marxism of the Second International,

11.

Claude

12.

Korsch,

13.

ibid,
"In
the

Levi-Strauss,
op cit,

pp.

The Savage
77-8.

Mind

Original

(London,

1972),

pp.

94-95.

emphasis.

this
following
Lukcs,
Colletti,
point:
stressed
also
p. 76.
hand,
the
Marx's
other
on
economy,
own critique
of political
The
trinity
decisively
is
mysterious
altered.
picture
whole
is
'value'
Since
is
Capital,
Labor
Land
now
away.
swept
of
and
labor-power,
human
the critithe
of
considered
as
objectification
discourse
comes to
of Capital
cal-scientific
or anti-fetishistic
fur(a
the
the
class
working
of
coincide
with
self-consciousness
just
For
ideology).
as
ther
the
and
proof
of
of science
unity
'
'capital,
'value'
labor,
by
the
and
of
wage
recognizing
essence
hence
(and
'itself'
that
of
essence
sees
as an objectification
knowledge),
the working
this
through
reaches
self-consciousness
by becoming
and
profit
achieves--for
class,
conscious
of itself,
knowledge
forms
derived
from
of the
are
rent
value--the
surplus
as a whole.
and basis
of society
origin
of other
and hence
classes
in
"
("Bernstein
RousInternational,
Marxism
Second
the
the
and
of
90-91;
in the original).
seau to Lenin,
pp.
emphasis

"

-78is

14.

This/one

15.

Karl

16.

It might be objected
that
that
the working
we are implying
class
have achieved
it can
before
socialist
consciousness
must already
This is obviously
not true,
at least
not in
make a revolution.
But capitalism
the basis
terms.
can only provide
such absolute
human consciousness;
for altering
it will
on its
own make large
potentially
of the population
anti-capitalist,
or at least
strata
But capitalism
the working
class,
or
provide
cannot possibly
so.
of capitalist
of the nature
anybody else,
with the understanding
Reading
are at hand.
and of what possible
society
alternatives
for example,
is not part of
literature,
Capital,
or revolutionary
It
for people
in capitalist
the normal course
society.
of events
break with those day to day activities
a qualitative
represents
bourgeois
in and of themselves,
that,
only serve to reinforce
from
developing
inhibit
the
an
class
and
working
consciousness
hisitself
of
agent
as a potentially
revolutionary
of
awareness
torical
change.

17.

See Hook's
excellent
formal
to
adherence

18.

Kolakowski,

19.

Gramsci,

20.

Marx,

21.

in the Grundrisse,
See the passages
where Marx
pp. 100-02,106-08,
between the logical
sequence of catethe difference
establishes
the concrete,
and their
through
gories
which the mind establishes
these
Rubin's
somewhat
of
explication
genesis.
actual-historical
is excellent:
difficult
passages

themes
of the central
of Colletti's
essay
on Bernstein;
76-102.
is almost
Colletti's
identical
see pp.
to that
argument
I.
Rubin,
(English
Theory
of I.
whose Essays
on Marx's
of Value
1972;
Detroit,
in Russian
translation,
originally
published
as
is without
Moscow,
1928),
Ocherki
Stoimosti
Marksa,
po Teorii
any
I of Volume
I of Capital
the best
treatment
that
question
of Part
is no indication,
There
however,
Colthat
we have encountered.
letti
Rubin's
was familiar
with
work.

Marx,

(Moscow,

The German Ideology

1964),

p.

396.

between
Lenin's
on the contradiction
theory
the reflection/cognition
and the active
his
that
and
political
of
all
underlay
of consciousness
philosophy
day
(Tohis
day
to
practice.
as
as
well
non-philosophical
writings,
For
61-62).
Karl
Marx,
a more genthe
Understanding
pp.
of
wards
between
deeper
the
treatment
same
conflict
of
and somewhat
eral,
403.
Gramsci,
implicit
Notebooks,
p.
see
philosophies,
and explicit

pp.

62-70.

Notebooks,

Grundrisse

discussion

p.
(Pelican

368.

Our emphasis.

edition,

London,

1973),

p.

101.

industrial
C
between financial
"... the relation
and
capitalist
from
C;
loan
this
B
B's
relation
a
consists
of
receiving
capitalist
between
relations
the
presupposes
of production
already
existence
industrial
A, or more exactly,
B and laborer
with many
capitalist
between the industrial
laborers.
On the other
hand,, the relations
that
do not necessarily
presuppose
and the laborers
capitalist
B had to borrow money from the financial
capitalist.
capitalist
'sur'capital'
Thus it is clear
and
that
the economic
categories
'interest-bearing
and
capital'
the categories
precede
plus value'
'
'interest.
Furthermore,
between the industrial
capthe relation
laboritalist
has the form of purchase
of
and the workers
sale
and

-79power,
that
the capitalist
and in addition
presupposes
produces
i. e., that
he is connected
goods for sale,
with other
members of
by the production
society
relations
of commodity
owners with each
On the other
hand, relations
other.
among the commodity
owners
do not necessarily
bond between the induspresuppose
a production
trial
From this
it is clear
capitalist
that
the
and the workers.
'commodity'
'capital.
'
the category
categories
and 'value'
precede
follows
The logical
from the
order
of the economic
categories
by the
character
of the production
relations
which are expressed
Marx's
categories.
economic
system analyzes
a series
of produc(Rubin,
tion relations
of increasingly
complex types. "
op cit,
p. 32; original
emphasis).
39.

22.

Rubin,

23.

The New Economics,

24.

Preobrazhensky's
fact.
Preobraopponents
were well
aware of this
how, when his chapter
zhensky cites
on the law of value was originally
in article
form it received
(as opposed
published
a cool
hostile)
Soon, however,
it was subjected
to openly
to
reception.
the same torrents
of vituperation
as his essay on the theory
of
See Preobrazhensky,
"Ekonomiprimitive
socialist
accumulation.
in Bolshevik,
No, 15-16
Zametki III"
("Economic
Notes III")
cheskie
(31 August
1926),
p. 68.

25.

I of The New Economics,

On this
see Chapter
ical
Analysis
Economy. "
of the Soviet

26.

VKA 22,

27.

When
This last
comment requires
and caution.
some clarification
1928 as a
dealing
with Preobrazhensky's
works we have to treat
line.
He continued
to write
once he had gone back
major dividing
between what he
into
is a clear
the party,
continuity
and there
Still,
1928 and what had come before.
whatever
published
after
debureaucratic
Preobrazhensky
thinking
the
a
of
on
subject
was
him
impute
be
to
too
to
much
generation--and
careful
not
we must
his capitulation--he
could not have said it
on that
score after
during
His writings
this
time have an interest
mainstraight
out.
his theory
in particular
ly in terms of economic theory,
of capfreshness
italist
crises,
and as a welcome breath
of intellectual
"red
in the midst of the paltry
the
the
proof
age
of
atmosphere
from
fessors.
him
the party
"
Even this
to
expelled
get
was enough
But it would only
in 1931 and branded
Trotskyist.
as a secret
finally
had
have been during
bureaucracy
the 1930's,
the
conwhen
itself
in opposition
of
were thinking
solidated
and others
still
have
Preobrazhensky
Soviet
Thermidor,
the problems
that
would
of a
did
he
If
degeneration.
been able to work out an analysis
the
of
In the twenties,
on
so we have no record,
as we would expect.
had
hand, when he and the rest
Left
the
the other
some
still
of
have
freedom of expression,
Preobrazhensky
possibley
could not
from
foreseen
degeneration
the prospect
the
revolution
of
of a
in
danger
Like
he
Opposition
the
the
main
within.
saw
as a whole
from
a capitalist
restoration
an economic and
which would ensue
breakdown of the proletarian
brought
dictatorship,
about
social
by the disastrous
leadership
and the revolupolicies
of the party
isolation.
tion's

Essays,

p.

p.

pp.

70 (Spulber,

148-50.

pp.

Original

emphasis.

"The Method

of

Theoret-

172-73).

-80To
at
this
ply
his
in

the extent
Preobrazhensky's
ideas to arrive
that
we can utilize
a better
appreciation
of the degeneration
of the revolution,
places
us in the somewhat difficult
to apposition
of having
Preobrazhensky's
the Soviet
method of analyzing
economy to
own account
of the problems
of culture
and class
consciousness,
Preobrazhensky
to arrive
that
order
at conclusions
either
could
We are justified
in doing this,
not or did not come to himself.
insisted
had to be caras this
was precisely
what Preobrazhensky
Marx's method to the historicallyto applying
ried
out with regard
Still,
new Soviet
economy.
to differwe have to be quite
careful
entiate
what Preobrazhensky
actually
said from what we ourselves
have concluded
largely
by
about the emergence of the bureaucracy
his theoretical
taking
in their
premises
some steps further
application.
29.

Original

28.

The New Economics,

29.

"Perspektivy
Novoi Ekonomicheskoi
New Economic Policy"),
Krasnaya
pp. 201-14.

30.

Ibid,

31.

implicitly
Preobrazhensky
in his divissame abstraction
made this
ion of she New Economics
between the analysis
of the law of primitive
(which dealt
socialist
accumulation
primarily
with the inter-relation
of the state
sector
with the private
economy) and the
discussion
the state
of the influence
of the law of value within
He stated
it explicitly
in "Economic
in the
Equilibrium
sector.
System of the USSR, " when discussing
the transition
to NEP:

p.

p.

emphasis.
Politiki"
No.
Nov',

("The Outlook
3, Sept. -Oct.

for the
1921,

202.

"In examining
however,
these changes,
to diswe must be careful
between two different
On the one hand, cerstinguish
categories.
tain
ecochanges were made in the methods of managing the state
from the usual capto squeeze everything
nomy in order
of value
italist
techniques
and so on, in the
of accounting,
calculation,
first
in other
these were
words,
stages
of socialist
construction;
in the interests
economy itself
changes introduced
of the state
These
level
changes
must not
at that
given
of socialist
culture.
imposed
be confused
that
the
upon
were
other
economic
changes
with
by the prefactors,
by external
the state
economy
specifically
(VKA
22,
dominance
in
"
the
country.
of petty-commodity
production
)
Our emphasis.
p. 23.

32.

Ibid,

33.

The

34.0

35.0

64-65.

pp.
Library

Original

emphasis.

lists
of Congress
0 Material'noi
zhensky
entitled
(On the Material
Obshchestve
holdings
Like
so many valuable
it
be found.
cannot

a book by Preobrav Sotsialisticheskom

in Socialist
Society).
however,
institution,

(On Morality
Klassovykh
Normakh
and Class
50-51.
interesting--and
See also
the very
pp.
book by I. Grossman-Roshchin
ceptive--review
of this
journal,
LEF, No, 4,1924,
196-98,
pp.
Morali
1923),

Morali,

its
catalogue
Baze Kultury
Basis
of Culture
of the august
in

p.

53.

Norms,

Moscow,

perquite
in Mayakovsky's

-81-

36.

Preobrazhensky's
is strikingly
theory
to that
of culture
similar
Compare the above quotations
of Gramsci.
quite
with the following,
Notebooks:
representative
passage from The Prison
"This
between thought
i. e., the co-existence
contrast
and action,
in words and the
one affirmed
of the world,
of two conceptions
is not simply
in effective
action,
other displayed
of
a product
for
Self-deception
self-deception.
can be an adequate
explanation
taken separately,
a few individuals
or even for groups of a cerbut it is not adequate
in the
tain
size,
when the contrast
occurs
life
between thought
In these cases the contrast
of great
masses.
and action
cannot but be the expression
of profounder
contrasts
historical
It signifies
that the social
group
of a social
order.
in question
own conception
of the world,
even
may indeed have its
if only embryonic;
itself
in action,
a conception
which manifests
but occasionally
is,
that
the group is actand in flashes--when,
ing as an organic
But this
totality.
same group has, for reasons
adopted
a conception
of submission
and intellectual
subordination,
from another
group;
which is not its own but is borrowed
and it
itself
this
to be folaffirms
conception
verbally
and believes
in
it,
because this
lowing
is the conception
which it follows
is not independent
'normal
is,
times'--that
and
when its
conduct
but submissive
Hence the reason why
autonomous,
and subordinate.
from politics.
And one can show
philosophy
cannot be divorced
furthermore
that
the choice
of
and the criticism
of a conception
is also a political
the world
Notebooks,
matter. " (Gramsci,
pp. 326-27).

37.

Preobrazhensky's
It is in this
use
sense that we should understand
of such terms as "instinct"
and "human nature. " Though borrowing
from an intellectual
this
traditerminology
rather
unfortunate
tion
that would seem to owe more to positivist
than to
science
in no way considered
Marxism,
Preobrazhensky
these as inate
proThose forms of human behavior
perties
of human beings.
which at
by social
one stage of human development
norms and
are dictated
in another
epoch be
are more. or less consciously
adopted,
will
i. e.,
out virtually
so habitual
as to be carried
unthinkingly,
instinct
be "instinctual.
" Thus for Preobrazhensky
they will
and
(and therefore
human nature
are historically-acquired
mutable),
forms of social
See
to specific
and correspond
organization.
0 Morali,
p. 113.

38.

is borrowed
from Gramsci,
This phrase
Preobrazhensky,
who, like
of the dissemination
was very much preoccupied
with the problem
in a predominantly
and implantation
of Marxist
culture
peasant
See Notebooks,
country.
pp. 392-93,395-98.

39.

"Better
V. I.
Lenin,
Fewer,
" Selected
But Better,
(Moscow,
Volumes
1971),
3, pp.
776-77.
Vol.

40.

Trotsky

41.

Parts
had appeared
NEP To Socialism,
pp. 62-68.
of this
chapter
into
incorporated
"Ekonomicheskaya
Politika
Proletarthe article,
iata
("The
Strane"
Economic
Policy
v Krest'yanskoi
of the Prolein a Peasant
in Kommunistichesky
Country"),
tariat
Internatsional,
(This
journal
1922.
No. 25, Nov.
in
was simultaneously
published
including
English,
is
the article
of languages,
a number
so that
in English).
available

makes this

same point

throughout

Works

The Revolution

in

Three

Betrayed.

-8242.
43.0

The New Economics,

Morali,

pp.

193-94.

93-99.

pp.

44.

Ibid,

45.

in the form of series

From NEP To Socialism
was written
of lectures,
in the year 1970 to a group of worker-students,
ostensibly
given
the transition
about the USSR's path out of isolation
and through
It was, of course,
period.
a positive
statement
about contemporary economic policy.

46.

NEP To Socialism,

47.0

105-07.

pp.

Morali,

p.

83.

p.

68.

Our emphasis.

Our emphasis.

48.

See, for example,

First
Five Years of the Communist International,
"Perspectives
For World Development,
" reprintVol.
II,
pp. 305-06;
(and which contains
(USA), Aug. 17,1970
such
ed in The Bulletin
fairly
formulations
lags behind
remarkable
as, "consciousness
being");
1938-39,
Korsch makes a very simiand writings,
p. 51.
lar criticism
of Luxemof both Luxemburg and Trotsky,
especially
burg's
Marxism
that
the "theory"
notion
of late-nineteenth
century
had got way out in front of its practice,
lying
and was effectively
State
in wait for the latter
See "The Present
to catch up to it.
"' in Marxism and Philof the Problem of 'Marxism
and Philosophy,
for
101-05.
I
C.
Marshall
to
pp.
am
grateful
calling
osophy,
the Trotsky
to my attention.
references

49.

The New Economics,

50.

Ibid,

51.

VKA 22,

52.

The New Economics,

53.

Ibid,

54.

(Spulber,
VKA 22, pp. 64,65,70
pp. 166-68,172-73;
heavily
passages
on pp. 166-68 are rather
edited,
important
deleted).
politically
paragraphs

147.

p.

188.

195-96.

pp.

p.

p.

p.

64.

189.
the Spulber
with the most

-83PART I

MARX'S REPRODUCTION SCHEMES AND THE ANALYSIS OF A MIXED ECONOMY

CHAPTER
CIRCULATION

Marx's

I.

In

the

is

that

in

in

ated

is

capital

forms,

ownership

and the

fic--that

is,

First

of

money-transformed
is

which

basic

circulation

must

M-C...

P...

of

are

also

the

money to

to

very

purchase

through

there

can be three

circulation,

and b)that

formula,

the

encompass

derived

in

which
and
these
speci-

I of

Volume

into

back

'

derives

This

in

invested

more money.
entire

gener-

historically

money capital.

M-C-M'--money
into

which,

production.

commodities-transformed

Only

are

just

not

production

direct-

Capital,

that

money.

commodities
formula

But now the

the

specific.
purchase
first,

expansion

as the

of

process.

It

just

money in

means of

for

his

production

not

As for
with

personal

is

This

money form

value.

The capitalist
items

is

now this

any commodities.

i. e.,

as money capital,

relationship,

forms

capitalist

Marx

commodities.

and these

functions

three

are

to

for

goes:

C'-M'

Money purchases
stract,

into

value

the

of

forms

etc.,
surplus

of

for

as opposed

the

out
at

three

capital

i. e.,

as a whole,

for

the

analyzes

capital,

see a)that

to

formula

transformed

then

we look

Capital

Industrial

finance

income

only

Industrial

production,

expression

relationship

familiar

the

are

the

in

process

pertain
is

from

the

the

REPRODUCTION

circulates.

we will

reproduction

there

Marx

of

land,

If

for

they

Capital

II

their

proper.

ly

This

draw

formulae

of

of

"metamorphosed"

three

only

Circulation

directly

engages

production

the

capital

instance,

last

the

industrial

capital,

merchant

SIMPLE

Volume

of

which

AND

for

Formulae

opening

by which

forms
Marx

Three

the

of

ab-

money which

the

capital

commodities,

they

money capital

doesn't

use

consumption.

He uses

them

(machines,

plant,

raw materials,

-84-

intermediary
he converts

half

of

LP
M-C-MP

of

labor

goes

(LP).

is

this

two elements
cess

not
of

dots

short,

form

of

main

means of

only

them

to

that

MP and LP function

In any

the

in

work

process

as productive

of

his
the

productive

scheme represents

indicate

as money

has found

capitalist

he can set

our

these

money capital.

Once the

capital,

when he finds

money functions

his

that

pur-

(MP) and

production

only

potentially

point.

side

is

it

potential

pro-

capital;
is

circulation
in

capital

the

pro-

process.

In

of

chines

(though

chines

that

that

what

that

the

labor

capitalist,

our

have

you.

is

engaged

would

they

bought),

they

They

his

value,

are

his

into

the

if

sensation,

he can once

shape.
for

the

capitalist

he will

have

he has

So he must

as money,

again

mabe

product

which

he,

is

to

be a real

to

ensure

as a

and sale.

The commodities

money,

but

of

might

the

commodity-product,

own use

wrong

they

on what

be ma-

same type

be shoes,

might

depend

They might

be the

comfrom

different

will

in.

has produced

For

a one-shot

can continue.

them back
of

capitalist

is

key word.

They have

that.

This

purchased.

of

a new quantity

be entirely

will

capitalist

for

the

and not

production

these

he has purchased

power

here

form

is

process

production

by coincidence

only

appropriates

capitalist,

equivalent

our

he initially

or

Sale

this

physical

production

jute,

transform

from

their

commodities

branch

allow

the

them

The P in

while

modities.

his

full

the

as the

money,

with

add that

is

productive

What emerges

the

it

on either

interrupted
duction

In

power.

really:

he finds

buys

then

production.

and the

So,

capital.

market

There

We should

Up till

of

on the

out

and actually

commodities
capital.

is

circuit

commodities.

power

case,

the

productive

labor

second,

P...

The capitalist
chaser

etc. ) and,

money into

the

first

the

fuel,

products,

go out

which
on the

in
sell
is

that

hand do not
them.
the

market

He must

universal
and purchase

-85-

new means of
is

There

one thing,

emerge

from

iginal

commodities

production.

value

original

the
the

of

commodities

in

a new value

equal

the

C has,

it

truly

a capitalist.

up in

production,
Now, in

al

his
took

that

power;
still
modity
again

of

come out
over

invested

times

more of
what

the

had the

it

but

the

particular

of

process

so it

the

it)

our

process

entire

seems to

he has
there

our

invested
is

man began

sale

to

money;

from

there

it

into
as comonce

commodities
again.

And,

who understands
sum of

of

and labor

functioned

begin

capitalist,

that

could

transformed

these

now an increment,
with.

that

production

could

a certain

capital-

equal

which

their

through

the

in.

origin-

value

saw these

a commodity-product,

tied

the

of

commodities

means of

namely

hands

the
of

form

now is

he put

money capital,

in

remained

commodiM, but

value,

sum than

a greater
of

of

was temporarily

which

some repository

start

where

that

it

commodity

The capitalist

m).

money,
of

out

M+

Marx,

Thus when

c).

form

the

cap-

follow

to

capitalist's

initial

the

simply

(i. e.,

M'

and finally,

and above

in

original

=C+

up in

the

has added
more.
It has
something/

(or,

as the

to

power

become C'
C'

The

value.

labor

the

c;

the

transferred

of

value

tied

production

than

the

their

added

also

process,

capital,

(or

has

process

all

commodities,

with

it

an increment,

got

commodities,

bonus

And the

augmented

bring

so is

has been

production

But

possessed
the

but

production.

circulation

At

bought,

capital-value

and has

became money,

other

or-

their

now exists

has at

capital;

as an added

from

value,

intervening

other

different

not

as productive
the

form

He has

this

sum.

function

little

does

He has always
first

is

only

has

as his

capital-value

ist.

of

by surplus

M augmented

Not

C, plus

commodity-product--which

sold

that

production

the

value

ties--is

commodities

own.

It

original

capital,

these

of

its

the

is,

about

means of

the

via

that

peculiar

course
to

power.

however,

capitalist

value.

added surplus
ital.

and new labor

production

money and has

surplus

value,

-86Marx
ist

termed

drive

expansion

value

fact

that

tion,

none

lost

sight

this

of

capital

the

the

of

that

for

C'-M'-C...

of

the

now the

in

this

be sold

process

and the

is

The

activities.

means of

of

which

intervention

of

produc-

production,
the

end of

M... MI,

to

the

of

(i. e.,

is

based

are

the
and

on the

money capital.
the

precisely

in

one hand,

commodities),
of

money cap-

Productive

on the

formula

illusory

capital

only

opposite

is

here

of

and,

to

existing

as we saw in
the

the

productive

And as before,

this

that

capital

with

These

power.

as commodity
M... M',

the

the

productive

C',

commodity-product,

process.

for

important

begins

examining

circulain

more

and labor

of

an interruption
capital

as productive

production

capital

of

in the process

The capitalist

production,

are,

renewal
money.

process
the

forms:

which

production)

value-creation

means of

capitalist's
they

these,

circulation
is

It

rise

process

form

for

is,

is

from

Aside

functional

other

was an interruption

production

give

that

for

to

power

of

goes:

value-expansion.

is

able

It

production.

capitalist,

of

the

circuit

can actually

out

the

(i. e.,

productive

P...

the

to

oppose

money capital.

capital,

capitalall

money-making,

circulation?

It

that

of

result

we must

Whereas

of

capital.

for

process

of

this

value

his

beginning

the

on two

value-creation

The circuit

in

both

forms

takes

material

other,

tion

of

without

labor

of

two

other

and commodity
process

that

of

perceives

happen

could

Money is

capital-value

in

process

capitalist

application

of.

What of

real

the

clearly

of

The self-expansion

form

general

basic

as the

most

production:

the

form

typical

most

process.

ital,

money is

which

the

without

capitalist

appears

way in

only

is

behind

And because

value.

the

as the
it
as money capital/reveals

For

production.

compelling

money formula

the

rise,

which
But

capital.
completely

The commodities

broken
be
can
money

give

unsuitmust

down into

-87The first

two components.

ties

the

after
formula

sale

low.

C'

turn

looks

a bit
is

returns

to

ally
ital.
of
m.

to

suited

But

the

He devotes

money,

serve

a whole

range

a quantity
This

product,

which

commodities
original

end he gets
Not

only

can once
up with

is

then

Thus

the

the

and m, which

contains

the

value

of

the

first

C (L F MP),

which

But

P, the

a value

has he restored

money,
of

value

to
initial

produce

quantity

Thus he takes

the

P.

which
the

then

commodities

to

for

to

buy more
in

in

but
his

their

P and at
something

gets

P (and

more commodities),
of

used

a commodity-

capital

equal

he also
of

capital.

to

rise

productive

value

advances

productive

is

a value
But

can be any of

consume.

gives

production,

He advances

his

to

of

equal

by

commodities

his

cap-

as a renewal

The capitalist

of

specific-

represented

value,

thing.
value

are

serve

he can individually

that

the

these

production

productive

consumption.

c.

for

that

initial

personal

process

and means of

his

surplus

M, and

these,

of

commodities

for

has his

also

sold

M' in
of

into

to

fol-

to

value

but

his

so difficult

the

commodities,

form.

an additional

M, m.

to

and then

contains

power

restore

serve

has yield-

C, c,

to

commodi-

straightforward.

labor

equal
the

back

again

much is

we see an interesting

functional

of

process

really

and purchases

to

in

not

the

commodities

which

original

M, which

commodities,

of value

functions

is

as a replacement

these

As a result

the

takes

capitalist

of

production

an increment

it

then

transformed

m, and buys

of

a quantity

an increment

of

This

The capitalist

Thus M is
P.

M'.

capital;

market

...

but

two magnitudes:

he purchases

is,

--that

the

the

value

in

embodied

of

(L & MP)

into

productive
value.

the

of

like:

converted

surplus

form

form

complicated,

represents

original

is

addition

the

the

CM-C
M'
+
+cm-c

P... C'

looks

in

renewal

value

in

C',

of

really

This

first

value,

the

C; and in

is

whose value

ed surplus

P's

P.

capital,

productive

is

a shape
he has

personal

the
more.
that

also

wound

susten-

-88He has appropriated

ance.
at

the

end not

P, then,

P...
--the

for

formula
the

at

simple

surplus

ital

is

ly

by the

capitalist
is

This
all

or part

tion

and labor

that

all

of

P...

C'-M'-C'

power.

The scale

of

enough
technical

next

a new m.
to

enough
is

that

the

ries

of
out

It

his

of

period,

is

his

have

consumed
than

on
their

when
cap-

individual-

consumed

he

this

into

means of

produc-

purchase

more means of

production

may be certain

technical

assuming,

would,

as:

appear

particular

labor

he has
can

it

surplus

crucial

value

and

capital,

between

as

an

wage

labor

must,

in

holds
of

quantum

the

not

fit

actually

together

two

may

onto

it

augmentation
and

capital.

the
his

have
The

to

point

expand
of

the

He car-

reproduction.

that

the

capitlist

reality,

take

value,

surplus

issue.
uses

into

he will

and

m,

value,

surplus

simply

a new

earned

is

as

he

Then

add

his

takes

to

power

the

his

with

difficulties.

enterprise

capitalist

purchase

This

relation

have

could

us say,

to

there

production.

capital

formula

the

production.

when

capitalist

obvious

year

P'

and/or

perhaps,

expanded

stays

next

The productive

is

the

let

cannot

He accumulates

production.
scale

of

capitalist

expand

is

this

more value

level.

capital,

exclusively

production

Then,

production.

The capitalists

c in

productive

used

structure
the

until

to

Of course

of

means

the

to

value

formula

the

(L F MP)...

the

surplus

second

Then

production

that

of

production

we see that
in

previous

alternative.

the

of

c goes

and labor

be such

only

power.

M' is

The money,

the

capitalist

process

rise

formula,

This

class.
the

not

the
closer,

gives

the

at
All

of

P, and receives

on.

The capitalists

Production

continues

force

Production

before.

year

live

of

a little

reproduction.

increased.

not

turned

it

out

value

formula

our

value.

but

began,

surplus

as the

same scale

entire
it

of

to

extra

driving

real

He advances

value.

something

the

expresses

we look

If

P but

only

generation

surplus

something

-89live

to

devote

then,

labor

part

ties,

c/x,

it.

and labor

than

or

ities

power,

equal

cumulation,
personal

P').

to

equal

but

have only

filled

in

commodity
it

C'-M'-C...
We start

he did
his

c-

Marx
is

appear

the

already

contains

value.

Thus

when the
the
these

(MP and L) plus

as follows:

commodi-

(where

to

producP" is

purchase

commod-

has been devoted

are

for

the

in

this

to

ac-

capitalist's

a formula

such

less

algebraic-

way,

process

and we
with

an

for

the
the

of

circulation

most

capital,
On the

complicated.

straightforward:

The capitalist
on the

sale

an original

of

commodities
those

for

into

into

personal

commodities,
those

for

consumption.

as in

of

process
other

our

Now, each of

money.
P, plus

the

reconverts

back

for

capital-value,

capitalist
C'

must,

market

the

after

commodity-product

commodities

these

ferentiates

of

means of

P"

accumulation

undoubtedly

capitalist's

his

sell

from

the

are

used

exactly

presented

has been completed.

circuits,

it

of

this:

formu-

P-C'

with

production

present

describe

like

form

These

c/x.
not

account

capital

might

to

Marx did

the formulae

Of all

surface

that

c minus

amend Marx's

and

formula.

of

part

a sum equal

this;

additional

the

to

own con-

production

a quantity

P to

to

added

his

then

and these

c,

m is

or

like

purchase

of

value

for

Pit

The remainder

in

consumption.

..

of

are

which

something

He will,

value.

commodities

We could

to

used

a fraction

x is

where

m is

of

surplus

Lo buy new means of

use

accumulate

part

words,

tion

tained

he will

rest

his

of

purchasing

to look
reproduction
(L & MP)
CM-C
M' +
+cmc/x (L & MP)
(c
- c/x)

C'

In other

that

m to

all

expanded
P...

ally

capitalize

the

of

He will

power.

for

not

and the

sumption;

la

He will

on.

the

surplus

money he has obdif-

he immediately

continued

production

Marx presented

it

-90C
Cl

M-C(L

is,

inal

capital-value

initial

the

and the

is

homogeneous--it

then

must

to purchase

the

precondition

the

formula

of

circulation:

is

commodity

capital

capital.

In

the
of

first

two

about

this

form,

as opposed

and

the

form,
following

on

the

other

is
from

fetch

is
meas-

the

take

part

capof

capital;

it

and

of
last

P for

an act
not
to

hand,

the

last

between

P...

C'

a form

that

is

the

act
is

not

the
for

suitable

just

the

the

renewal
In

of

a change

the

even begin.
between
both

for

money

is

an

act

of

to

change

its

of
formula

functional

its

every-

In

production.
of

in

C'

C'...

[C'-M'

circuit

the

money

production.

capital

is.
act

into

difference

the

being

of

taken

in

capital]

allows

acts

separate

in

productive

that

two

cannot

and

of

In

production

capital
act

as a whole.

back

But

lies

this

is

circulation

circulation

production.

of

other

circulation

production

it

the

as money capital

second

of

to

of

circuit

capital

act

without

the

one

from
the

of

circulation

period,

value.

P(P')

act

interrupted
of

emerged

process

? MP)...

the

and the

capital;

P...

entire

production

circulation

formulae

It

only.

of

of

significance

M-C(L

the

a change

He must
as productive

circulation;

with

practical

change

of

as money capital

serve

has

which

the

in

the

act

interrupts

functional

course

a universal

will

of

the

formula

of

culation

an orig-

money they

that

continuation

for

productive

functions

capital,

act

differentiation.

the

things.

the

starts

the

the

mass of

then

First,

two

The first

into

The

in

the

course,

money to

peculiar

M... MI the

converted

thing

that

contains

produced

an undifferentiated

make a real

Marx notes

entirety

of

already

own consumption.

Now, what
two?

for

value

sold,

new commodities

his

for

part

surplus

are

money,

But

value.

C',

commodity-product,

When these

production.

italist

C'

m-c

That

ure

P...

M'

--

of

F, MP)...

the

cir-

circuit

C'...

C',

As a result
form,

but

-91To understand
to

the

very

He could

find

his

his

sell

the

have

other

money capitalists
as means of
their

have

money capital

been

productive

the

very

existence

of

his

product,

from

C'...

C'

of

the

It

must

first

It

must

then

economic

for

capital
their

is

link

commodity

money

with
capital

the
in

this

for

presupposes

capitalists

to

who

in

commodities

hence

that

note

to

order
these

indirectly,

only

that

have paid

whom they

thus

market.
existence;

in

capital

would

have

owner

could

its
into

back

and in

exist

must
is

ever

to

presupposing

or

This

for

the

commodity
it

P...

circuit

capital

MP and L, which

producers

the

As soon

existence.

to

to

suppose

transform
capital

productive
order

P(P')

(since

live

subsistence).

circuit

money,

begins

so that

producers)

commodities,

direct

capitalist

we should

that

Commodities
if

purchase

when he has

other

into

that

own means of

different.

be sold

power

circuit,

this

workers,

both
(and

commodity

system

their

however,

into

his

his

of

productive

capitals,

produce

a capi-

commodities

capital

other

other

to

(and

their

first

the

C',

labor

as a wage).

the

was complete,

he does not

for

who were

their

i. e.,

these

producers

workers

money that

may need

money capital.

in

part

live

first

been

as embodied

transform

to

order

as production

purchased

for

subsistence

Similarly,

last

have

power

money capitalists,

in

or

sell

money capital,

well

commodity

this

of

for

very

money the

labor
to

must

formula

the

from

find

very

money they

production

could

and his

distinction

characteristic

money could

production

the

other

special
In

original

laborers

in

begin

of

the

free

only

of

themselves

part

two.

commodity-product

existence

is,

other

means of

first
is

It

second

and he could

who were the

to

the

was an important

this

the

money capitalist

capitalists;

talist.

thought

at

holding

first

not

to

as opposed

capitalist

the

look

we should

make,

formula

why Marx

right

from

get

the

the

off

ground.

a money capitalist.
are

merchants

capital

as a basis

already

either

who act

cannot
start

commodity
as

be the

assumes

first

commod-

-92ity

production

ity

producers

as the
have

MP and

ments,
tion

P into

of

Perhaps
in

point
talists

C',

vance.

of

premise

distinctions.
point

of

lae

would

we choose

view

Our first
all,

than

it

that,

certain

for

the

of

circuit

Yet

saw.
When P'

as a single

differentiated

(in
that

product

than

the

circuit

in

of

can

that

P...

formule
never

C'...

P',

for
not

all

all

the

is

quite

at

of

of

different.

relefor

i. e.,

at

circuit
as

It

a single

presents
(or

M) it

M' at

functions
been

has already
the

of

of

value
as is

more

can be capitalized).
to

start

the

new

constituents

various

are

and revenue
of

it

circuit

part

goes

the

af-

repro-

expanded

(assuming,

P'

That,

for

value

between

P.

More

It

that

surplus
of

formu-

as P (or

form

all

these

of

production.

the

end of

consumption
the

from

formula

this

circuit

P')

important

P...

say,
in

these

making

schemes?

capital-value.

where

society

very

reproduction

the

next

distinctions

can describe

capi-

commodity-

their

for

Which

be to

we look

of

capital

that

our

individual

and between

describe

C'

case

is

that

an expression

P...

of

M... M1, or

of

case

production

these

goes

reasonable,

Even in

the

general
is

what

other

capitals,

of

directly

to

block

of

that

discussion.
of

the

at

itself.

appears

and begins

M... M')

fact

circuits

capital

if

existence

presuppose

probably

directly

rise

ele-

transforma-

all,

He had a good reason

basis

the

all

a question

might

gave

the

subsequent

as a totality,

the

ask

inclination

problems.

end of

for

After

and in

here.

our

of

as we just

duction,

the

roots

They

production

us just

Let

commodthe

with
the

circuit,

the

presumes

some point;

nitpicking

the

ter

at

capitalist

Marx wasn't

the

of

other

it

supply

hair-splitting.

capital

the formulae

are

and will

aim

irrelevant.

production

and that

production

proceed.

the

appear

They

the

seems like

all

of

market

which

cannot

circuit

would

the

entered

without

this

the

capitalist

the

L,

form

general

In

lost.

capitalist,

short,
but

a whole.

starts

with

the

total

production

they

-93-

of

the

previous
be broken

first

of

ments

of

personal

is

circuit
the

the

the

capital

total

that

before
annual
is
into

stock

process

(P...

those

of

(M...

society

of

before.

it

and the

for

this

The premise

P')

or

commodities
M').

ele-

circulation

The premise

year

of

anew C' must

capital

possible.

part

a portion
of

ntire

the

of

only

either

productive

is

production

only

commodity

into

and the

production

can begin

production

C and c,

consumption,

circuits

other

the

down into

be complete

must

Before

year.

Marx

for

the

conversion

that

make up
it

explained

this

way:
because the circuit
But just
its
C'... C' presupposes
within
sphere
industrial
in the form of C (equal
the existence
of other
capital
diverse
MP comprises
to L+ MP)--and
other
capitals...
clamours
--it
form of the circuit,
i. e.,
to be considered
not only as the general
form in which every single
industrial
capital
not only as a social
(except
invested)
hence not merely
when first
can be studied,
as
a form of movement
but simultaneously
individual
capitals,
capitalist
dustrial

class,
capital
the
with

mingles
M...

industrial
individual
common to all
capitals,
also
of the sum of the
as a form
of movement
of the
of the aggregate
capital
consequently
inin which
that
of each individual
a movement
interwhich
appears
as only
a partial
movement
4
by them...
other
and is necessitated
movements

indicates

M'

the self-expansion
of the
side,
process;
of the entire
purpose
advanced
P... P(P')
as a proof production
of capital
of the same or of
capital
cess of reproduction
a productive
with
in
itself
(accumulation).
increasing
Revealing
already
magnitude
its
initial
production,
commodity
as a form
of capitalist
extreme
from
individual
the
CT... C' comprises
consumption
productive
and
of value
and the self-expansion
start;
productive
consumption
Finally,
its
included
branch
therein
movement.
of
as
a
appear
only
into
in
C'
any
more
enter
cannot
a use-form
which
since
may exist
''s
C
it
is
indicated
that
the
outset
at
any process
of production,
by parts
of the product
constituents
of value
expressed
various
is
C'
C'...
different
to
whether
according
must occupy
a
position,
capital
social
of the total
regarded
as the form of the movement
industrial
capiof an individual
or as the independent
movement
its
beyond
lead
tal.
the
All
these
us
circuit
of
peculiarities
individual
isolated
capmerely
of
some
own confines
as an
circuit
5
ital.
the value
only
as the
capital-value,
indicates
the process

In other
ital

which

dividual
is

interlink

must

ities

in

words,

with

represent

consumption
this

sense

from

that

all

the
the

very

as well
we must

of

commodities

aspects

of

the

of

circuit

other

commodity

as those
take

the

outset

commodof

production--means

sentence

cap-

commodity

capitalists,

productive

last

of

consumption.
in

the

passage

It

in-

-94just

What for

cited.

commodity

is

capital,

consumption

ual

of

the

it

large

is

are

gularities
Since

is

It

of

simple

in

C'...
C'
it
turns

of

either

an element

What is
it

society,
for

commodity

thus

commodity-product,

the

from

here

and expanded

that

for

use

the

these

all

of

his

commodity-

the

society

form

of

to

study

Marx began

that

from

reproduction

But

material,

individ-

taken

clear

capitalist

capital.
the

what

is

his

of

more,

continued

individual

the

deal

a great

is.

commodities

his

as his

capital.

necessary
For

simply

matters

purchaser

capital

as a whole.

C',

product,

its

productive

total

commodities

economy

for

of

the

of

standpoint
types

or

is,

one capitalist

at

these
the

re-

reproduction.

is the total
(total
starting
point
product
value),
out that...
reproduction
on an extended
scale...
to be
can take
place
only
when the part
of the surplus
product
the material
capitalized
already
contains
elements
of the additionthat
therefore,
al productive
capital;
so far
as the production
the

of one year serves

as the premise
of the following
year's
production
or so far as this
can take place
simultaneously
with the prois
cess of simple
reproduction
within
one year,
surplus
product
in

at once produced
tions
of additional
the substance
only
creates
additional

It

was indeed

tion"

foundation

that

duction.

cause
tion

ists
our

C'...

production
commodity

because
forms

of

the

C'...

C',

and not

express

assume

cannot

begin

involving
is

a similar

distinction
commodities);

discre-

and true
P...

P, the

process
other

of

repro-

capitals
and be-

outset,

without

the

complete

the

other

capitals

of

the

particular

at

all

made between

produced
is

the

presumes
the

functional

different

very

immediately

commodities

in

it

Because

various

capitalist's

"great

as workers,

capital,

a distinction

(and hence
first

process

the

must

peculiar.

as well

cited

formulae

three
capital

is

C'

circuit

Economique.
all

individual

any

the

of

that

capitalists,

the

ciety;
use

then,

But

and other

Tableau

Marx

that

who made the

his

of

We see,
forms

basis

on this

Quesnay,

of

it
to perform
the funca form which
enables
Increased
productivity
can increase
capital.
but not
its
but therewith
it
of capital
value;
6
for
the self-expansion
of that
material
value.

by these

other

circula-

capital-

made by them as purchasers

and because

the

circuit

so-

starts

of

-95out

by analyzing

for

all

these

reasons

Marx

the

analysis

of

for

point

Marx,

to

wanted

Our aims

than

we have

were

at

the

schemes

individual

capitals.

Second,
that

the

any of
must

following
the

which

its

case

this

what

Third,

this

of
the
It

commodity
overall
is

the

process

place

cap-

"metamorphosed"

use them

to

he

since
in

reveal

all

as much

as a whole.

analysis

upon

is

series

what

represents

show

for

in

capital,
it

out,

and year
where

anew

through

process

transformations

of

of

start

will

production

in

re-

Each year's

reproduction.

year

the

sense

capital

In order

form

that

forth

metamorphosis

a continuous

reproduced.
in

with

of

that

industrial

of

which

is

the

them

put

analysis
In

of

dream up

not

he derived

Although

Capital.

a process

did

Marx

in

each and
in

we end up with--and

can be recommenced.

relations

take

capital.

was natural,

production

circuits

basis

function

we began

cycle

cally-specific
never

to

starting

industrial

of

them on the

of

Production

a continuing

way the

is

system

forms,

II

various

the

year.

capitalist

undergo

every

the

represents

to

air.

based

Marx's

production

capitalist

is

show that

thin

of

Volume

of

presume

already

end product

out

to

clearly

beginning

capital

capitalist

important

schemes

production

in

it

8
Quesnay,
he quite

right

This

be his

social

circuits

before--

year

limited.

much more

we think

of

total

done.

he wanted

process

the

of

the

of

had to

this

various

by which

paths

the

about

reproduction

from

movement

and subtleties;

First,
his

the

product

that

more detail
the

total

discerned

the

explore

as he could

the

examined

details

their

to

course,

of

far

in

ital

happens

what

directly.

circulation,
circuit.

production

of

reproduction

of

capitalist
At

all

at

of

the

production

commodities,

which

it

upon

premised

the

requires

beginning
is
rarely

the

Production

production.
times

whether
Capitalist

is

or

in

production
emerge

historican

intervention
the
for
from

middle

of

exchange.
the

-96-

production

capitalist

cific

into
use

commodities

exists

this

last

to

enough
ducts

we have

understand.

in

capitalist

for

the

The worker
or her

ity.

work
the

work.

value.

out

to

Marx did

Marx,

But
either
that

labor

production

of

in

the
in

consumes
is

this
repeat

not
or

the

prove

enough

the

much
it-

longer

than
the

allow

Marx's

of
it

is

than

here.

raising

validity
us

to

much less

values

for

abil-

receives

deal

we are

himself;

laboring

that

commodities

point

exchange.

translates

a great

labor

his

The ability

power.

for

she has,

ability

ex-

workers).

an even
of

the

money in

of

also

capitalist
laboring

by this

contained

well

the

If

he or

quantum

pro-

money capital,

group

in

simple

But

sum of

(or

engages

this

production

his

of

commodity

a comparable

to

process

part

com-

physical

capitalist.

a certain

only

is

production

altogether.

a worker

the

and labor

production

tangible

matter

The capitalist

The laborer

she produces.
not

the

produced

labor

corresponding

We are

of

the

takes

of

of

Throughout

capital?

means of

he advances

capitalist

according

the

another

abilities

work.

process

in

endures

he or

is

the

produced

What are

some particular

circuits

power,

commodities

to

of

money and receives

the

laborer

of

the

Of course,

into

power

laboring

to

capacity

more--in

process

labor

sells

He advances

all,

any one of our

M, and purchases
change

They

after

class

already

more.

them as means of
of

labor

of

a bit

productive

are,

have

that

latter

the

have

and circulation

productive

production

self

designated

that

spe-

be trans-

times

all

the

market.

into

make up a capitalist's

the

of

on the

for

commodities

capitalists

looking

at

other

presumes

exchange

The production

power.

into

it

can reenter

They must

them.

other

bears

point

that

section

the

and that

they

which

further

This

them for

them and offer

modities

in

and then

money,

form.

appropriate

This

a form

who produces

first

formed,

in

process

only

theory
an

assumption.
What is

crucial

is

the

series

of

exchanges

that

goes

on here.

For

-97the

worker
it

and spend

is
this

of

quality

tion

power

circuits

that

level

the

dividual

in

capital,

his

possession.
their

consumed

first

on his

market

a source

it

cycle

to

of

labor

power,

that

the

nical

period

process

after
of

proportions

reproduction
capital

duction,

of

wage

for

it

just

not

a given

set

of

laborer.

This

this

only

historical

this

social

relationship

not

go on,

could

character.
between

not
if

social

establish

capitalist

the

is

that

a commodity,

well

The worker

the

itself
production

Just

as

to

is

the

that

gives
not

repro-

capitalism
reproduce

and wage laborers,

is

tech-

between

capitalist

as a particular

find
we see

It

of

could

the

the

whereby

relations--that
basis

con-

will

Thus

expanded.

the

find

he

that

to

the

will

a process

capitalism

capitalists

return

purchase.

or

spends

must

presumes

social
real

worker

a capitalist

relationship
If

she has

nothing--nothing,

for

of

is

Conversely,

so it

are

is

in

When he or

live.

that

available
is

remains

to

production

specific

tion.

period,

always

The worker

order

sale,

forms,

money;

maintained

its

it

for

in-

of

money-cum-other-commodities.

presumes

reproduction

process

and

capital

he needs

production

in

source

empty-handed.

worker.

receives

power

a constant

potentially.

consumption.

labor

of

only
for

The worker

of

reproduction

revenue

at

our

market

This

work.

capitalist

individual

a seller

means

of

the

goes.

her

or

as

tinued

is

to

ability

produc-

on the

have

they

subsistence,

further

sell

And so the

go out

The

We saw from

and his

capital

least
one of its various
is
This/simply
not so for the

means of

it

but

enough,
must

He need never

peculiar

means of

and selling

his

renew

could

and capitalist.

reproduced.

at

their

except

both

capitalist

laborer

the

a command over

by producing

the

we see the

laborer

constantly

merely

consumption.

His

is

will

is,

that

these

here

But

between

process

that

capitalist

Without

obvious

capital,

and labor

various

is,

exchange

from

she receives

subsistence

childishly

possesses

capitalist

money he or

the

on means of

live--that

not

it

take

must

mode of

be halted

this

it

could
producsocial

-98-

relationship
happen

through

For

that

revolutionary

us these

the

of

sis

be irrevocably

must

circuits

students

Marxist

of

we think,

from

strictly

algebraic

manner.

which

Marx highlighted
of

is

more detailed
need his
ist
at

fering

in

Volume

of

a brief

aspect

of

II.

to

of

Basics

give

in

simple

in

replacement

in

a given
of

account

our

Yet

not

true

both

of

industrial
the

we will

of

make all

anof
the

on it).
of

Nor
capital-

these

of

Hence,

schemes.
of

his

rudiments

process

a fog.

through

the

based

were

and by stressing

of

the

of

their

long-standing

about

capital,

of

are

by ofbetween

capital
social-relations

our

subsequent

classical

reproduction,

we want

to

draw

we need

in

order

which

is

of

to:

develop
the

specific

will

of

the

discussion

1)Clarify

certain

and their

Marx's

eco-

they
use

Marx's

schemes

reproduction

and 2)further

out

more than

on Marxist

works

Preobrazhensky's

the

is

This

mechanics.

expanded

we do not

schemes

reproduction

of

treatment

what

society,

fixed

of
this

that

metamorphoses

use

Instead

points

of

reproduction

intricacies

the

reproduction

crucial--dimension

Reproduction

Marx's

VKA 17.

a device

II

in

other,

clear

methodological
analyzing

Simple

a detailed

As for

become quite
schemes

the

are

schemes

analysis

in

schemes

presented

follow.

with

done

the

of

we hope

to

of

anyone

forms,

reproduction,

adequately
nomics.

survey

dealing

In
wish

use

easier

The

leave

Marx's

reproduction

usually

(although

analy-

difficulties

the

as a reproductive

reproduction

functional

discussion

of

investigations

relations

different

its

Marx's
grasp

of

are

the

reality

the

with

they

to

analysis

root

In

that

difficult

production
the

have

production.

not

can only

Marx's

of

Many of

a particular--but

capitalist

circulation

fact

the

implications

capital.

economics

emanate,

alysis

important

most

industrial

of

that

action.

the

are

destroyed--something

role
of

analysis

aspect

of

his

in
the

-99discussion

show that

we will
deriving

the
of

economy

petty

immediately

most

dealt

latter,

the

Volume

II

simple

and expanded

for

schemes

was to

in

use

capital

of

(or

and capitalist

Preobrazhensky

that

In

within

is

that

schemes

Preobrazhensky.

of

study

the

of

to

related

with

in

the

next

there

is

the

basis
in

reproduction

developing-socialist)

his

our

own

chapter,
for

a mixed

production

"Equilibrium"

articles

1926

of

and 1927.
scheme for

Marx's

He divides

known.

simple

social

produces

means of

means of

consumption

reproduction

under

into

production

two departments,

(department

production

(department

I),

II);

and it

simplest

of

analysis

of

how,

accumulation

of

capital

takes

and are

restored,

so as to

numerical

scheme

his

tion
in

circulate
the

next

the

of

either
dealing

longer

social

begin

with

ism each particular

of

capital)

on the

or means of

unit

constant

of

of

market,

and is

is

able

to

however--the

ious

one hand,

same manner,

individual

on the
explain.

other--are

capitals,
not

on the
identical,

to

begin

as Marx

of

no

produc-

once again

the

to

process

that

of
to

the

great

no
of

under

capital-

its

needed

its

of

its

of

which

we are

procure
all

of

reproduction

of

productive

own product
all

reproduction

goes

sum total

production,

(i. e.,
dispose

the

because

able

thus being able

of
The two processes/
reproduction,
the

where

and enterprises

only

course,

capital

and variable

but

The process

production

he begins

production
consumption

consumption

place,

i. e.,
elements

is

production

aggregates.

produces

as follows:

is

sub-branches

simple
takes

of

which

that

production

individual

the

all

means of

capital

elements

branches

these

of

production

produce

the

each

here

conditions,

well

that

which

from

is

individual

the

place,

and that

+ 1000v + 1000s = 6000 means of

+ 500v + 500s = 3000 means of

1.4000c
2000c
II.
Although

His

year.

the

under

is

capitalism

over
of

social
lengths

in

again.
the

var-

capital
to

-100For our present

this
purpose
process
of reproduction
must be studied from the point
of view of the replacement
of the value
as
well as the substance
of the individual
component parts
of C' [the
We cannot
commodity-product].
rest
content
any longer,
as we did
in the analysis
of the value of the product
of the individual
capital,
that
the individual
with the assumption
capitalist
can first
into
the component parts
convert
of his capital
money by the sale
them into productive
of his commodities,
and then reconvert
capital
by renewed purchase
in the comof the elements
of production
Inasmuch as those elements
market.
modity
of production
are by
they represent
nature
material,
as much a constituent
of the social
finished
capital
as the individual
product,
which is exchanged for
by them.
Contrariwise
them and replaced
the movement of that portion
of the social
commodity-product
which is consumed by the labin expending
his wages, and by the capitalist
orer in expending
his surplus-value,
part
of the movement
not only forms an integral
but intermingles
of the total
product
with the movements of the
individual
this
and therefore
process
cannot be explaincapitals,
it.
ed by merely
assuming
is this:
How is the capThe question
at confronts
us directly
in value out of the annual
ital
replaced
consumed in production
intertwine
and how does the movement of this
replacement
product
by the capitalists
and
of the surplus-value
with the consumption
It is then first
a matter
of reproof the wages by the laborers?
10
duction
on a simple
scale.
With

it

tion

This

ponent.
ious

whole

the
in

place

their

with

capital

its

reproduce

natura.

even though

equivalent

ially

useful

sists

of

simply

means of
II,

nor
of

which

cannot

eat

I possesses

for

form.

Department

off

both
It

v and s,

must

production,
on the

In
it

i. e.,

subsistence,

department

value

it.

within

consumption
People

material

capital,

variable

form

for
other

the

its

means of

it

does
this

useful

value

cannot

its

surplus

workers
value,

Therefore,
a

commodity-product
them

equivalent,
consumption.

just

opposite

the

i. e.,
live,

capitalists

possess

var-

it

means of
has

the

as a

production.

annual
not

com-

reproduction

place,

I's

department

produc-

department

provide

reproduce

its

hand,

the

second

cannot

in

exchange

the

for

sim-

capital

between

exchange

department--nonetheless,
its

entirely

means of

means of

in

means of

only

own constant

internal

require

the

within

its

scheme for

the

at

I produces

reproduce

place

look

another

department

no doubt

will

constant
takes

first

the

enterprises
the

us take

Because

in

can

let

mind

reproduction.

ple

of

in

this

in

a mater-

which

con-

problem.

-101It

produces
their

with
iable
is,

means of

necessary

its

reproduce
surplus

own annual

both

workers

department

tion

of

capital

component

too,

the

productively-useful
is

possesses

means of

duction.

Quite

take

of

material

equal.

as means of
II

(which

production

If

elements
department

exists

department

exchange,

material

the

department

that

and department

means of
the

is

department

needs,

that

II
it

receives

needs
required

is

equivalent

it

will

exchange

depart-

the
the

produc-

worn out
its

production

it

re-

means of

consumption.
for

production

for

means of

its

the

value

value

constant
is

respective
production

Thus Marx

equivalent

In

consumption

capital,

that

all.

is,

it
the

The value

departments
worth

of

terms

means of

not

pro-

equivalent

consumption).

the

which

reproduction

simple

exchange

This

for

II,

each other.

for

condition

I obtains

production

and department

with

as means of

I has means of

workers

in

exchange

must

production)

by the

its

means of

possesses

that

as well.

II.

represented

means of

consumption,

the

its

themselves.

production

I would

(that

consumption

in)

means of
of

var-

exchange

of

replace

which

of

basic

of

department

investing
must

the

which

of

by feeding

form

means of

they

fund

physical

I,

consumption

naturally

(existing

v+s

c of

for

concluded

place

value

department

exchange

capital,
of

out

some internal

just

II

its

no accumulation

within

(or

workers

consumption

and capitalists

upon

the

means of

What we have
must

this

exchange

must

workers

equivalent
in

is

entire

produce

the

its

of

however,

It,

the

Department

by a value

exists,

immediately

cannot

of

individually)

reproduced

by laboring

production.

quires--it

of

just

means of

product

it

II

any more than

I can consume

constant

is

fund

may require

as a whole

its

reproduce

as there

consumed
this

is,

their

so long

Once again,

ment

to

entirely

but

(that

with

and capitalists

and capitalists,

that

is

department,

Unfortunately,

annual

value,

product.

the

within

capitalists

both

can provide

subsistence

surplus
value

It

consumption.

means of

and its

capital),

and the

of

only

2000 for

must

of
be

which

-102it

the

needs
if

work

department

means of

means of

for

means of

dispose

of;

means of

in

discussion,
the

them.

just

it

social

necessary

to

to

say

that

and revenue;
to
year's

in

product

of

the

role

breakdown

consumption

of
of

to

department

of
offer)
I did

would

to

produce

of

values

not

on the
(here

as it

ensue

200
cut

the

this

account
such

and articles

of

matters

II's

some of
elementary
a few

only

analysis
The dis-

versus
are

11

pre-

the

new-

differ-

and that

production

product
etc.

his

between

capitals
and the

luxury;

of

as:

product

individual

department

in

Marx's

and how these

money capital

early

with

differentiation

annual

labor

of

re-

fundamen-

seemingly

deal

we will

the

very

analysis

that

simple

the

establishes

a detailed

the

of

conditions

and IIc

I(v+s)

and cover

current

the

basic

a proper

transferred

the

consumption

have

not

would

Marx

purposes

of the

capital;

a loss

the

give

intricate

capital

reflected

continue

and complications

be quite

value

of

between

For our

of

etc.

point.

proceeds

to

consumption

reproduction

and a crisis

starting

required

have a deficit

(which

suffer

still

fund

I did

simple

not

would

workers,

exchange

value

money material;
of

the

even

could

summary

problems

to

II
It

off

little

Suffice

ly-created

the

consumption

consumption),

laid

viously-created

ently

means of

future.

between

tinctions

department

of

1800 in

means of

would

(which

conditions

embodies.

have

would

still

and then

relationship
of

II

department

and had only

II

its

but

I had,

department

reproduce

of

essential

if

I could

the

relationship

but

department

Marx this
is

consumption

only

department

If

offer.

2000 in

means of

production
tal

means of

exchange;

200 in

production,

to

same value

and department

unsold

For

the

will

2000 and has

worth

and had

Then the

same scale

back

production

production

of

be satisfied

in

means of

deal

the

production

full,

in

need).

needs

to

then

and a surplus
not

consumption,

1800 in

production

[1800(v+s)]

means of

of

only

2000 in

200 in

II

consumption

a need

say,

in

same amount

of
the

of

into

articles

Only

then

would

-103full

the

import

analysis

the

of

or

Returning
we see is
could
ing

that

to

their

of

production

it

requires,

ists
is

in

would

the

is

a problem
The vehicle
no longer

just

of

for

this

If

reproduced.
geable

product

though

it

simply

capital-value
on in

the

capital-value

remains

at

as in
I(v+s)

a part

of
its

changes

all

circuit).
is

at

only

of

variable

the

I's

of

But

both

potentially

the

the

sec-

through

a process

the

and change
this

and their

Money here

form.

functional

money and commodity

capital.

In

bebe

I's

exchantimes,

all

however,

As money,

(v remains
the

it

itself

of
at

capital

as

value.

payment;

v part

IIc

confronts

M... M1, must

industrial

variable

previous

circulation.

circuit

of

in

or means of

capital-value
regardless

of

identified

exchange

monetary

external

reproduction

production

already

we see that

times,
in

has

value

is

a metamorphosis

undergo

is

pro-

by money.

means of

elements

metamorphosis

which,

I's

in

The obstacle

distribution

the

exchange

described

Marx

material

we look

of

is

as a measure

frequently
part

can only

that

seen

the

functions

impossible.

Each must

And we have
both

is

I(v+s)

consumption.

of

This

As we demonstrated

which

reproduction

and capital-

its

organizing

means

workers

to

reproduction

accord-

consumption

reproduction--it

economy.

comes money capital,

is

simple

products

means of

them out

efficiently

a circuit

in means of

parcel

problem

exchangeable

the

a moment.

two departments
the

its

for

return

in

first

the

the

and distribute

proportions.

market

simple

form.

then

not

elements

in

if

give

be shown sim-

ourselves

however,

matter

I could

II

one of

circulation,
In

department

appropriate

This

easy

was static

would

point

schemes,

commodities,

could

reproduction

last

this

upon

be a very

department

of

his

that

and any notion

quantitative,

reproduction

If

it

a capitalist,

its

it

to

the

cedure.

of

the

a technical

not

tion,

to

use.

essentially
touch

swap their

merely

and relations

even

We will

untenable.

become clear;

study

proportions

"model-building"
ply

Marx's

of

of

part

its

form

it

form

this

the

case

it

takes

of

-104-

its
money

functioning

converted

into

labor

of

power

being

is

It
tion

with

money,

or renewal

his

M... MI has

of

tion

place.

not

usable

potentially

the

is

production

capital--for

undergoing

the

capitalist

begins

capital.

This

labor

of

this

variis

then

only

of

and capable

con-

reappearance

in the form

Only
of

process

inite

are

use values

that

money,

the

along
ductive

path

self-expan-

duct,

C',

productive
Yet
in

if

end.

For

this

in

both

department

to

start

Money must

departments

so that

it

is

must

the

this

the

case
II

it

into

means of

exist

said,

is

there

a def-

that
specific

be converted

first
is

one step

the

into

further

elements

department

with

money,

only

potential

They are

same with

of

pro-

II.

It

a commodity-pro-

and only

then

into

production.
I must

circuit,

sell

we would

as a reserve

can be advanced

produc-

only

also

value.

must

and department

reproduction

previously

of

with

The commodities

begin

still

begin

that

as acquiring

be turned

first

must

capital,

order

It

pro-

commodity-product

is

and which

so far

concerned.

IIc.

which

equivalent

circulation

is

they

mean that

as we have

be sure,

circulation.

Thus

the

established

embodiment

value.

a universal
of

already
of

a universal

to

acquisi-

reproduction

still

is,

It

capital.

not

the

money before

into

however,

I,

Money,

the

must

be converted

department

process

possess

capital

replace

to

capital.

the

not

is

which

has

But we have
in

make up C'

The capitalist

C'.

does

of

point

starting

as variable

capital.
sequence

that

productive

For

variable

variable

the

M, and upon

as variable

however,

which

can take
simply

dead

the

capital

C'...

to

commodity-product

C',

in

become the

suddenly

as opposed

cess,

must

into

back

is

it

commodity-capital

as a commodity.

market

productive

of

case

upon

conditional

being

its

12

sion.

is

the

functioning

the

of

part

capital

converted

functioning

capital-value

able

in

power;

on the

actually

power

it

labor

upon C'

ditional

as variable

is

in

and therefore

at

their

product,

soon be in
least
initiate

one of
cir-

-105-

is

culation.

This

historical

assumption--its
as the

capital

In the

his

to

initial
their

workers

new value

products

that

bor

to

the

means of

production

in

form

the

he employs.

only
II

it

uses

has taken

this

to

money--their

purchase
in

place

this

is

far

it

Iv,

first

form

is

simple

expended,

and the

an even

exchange.

in

labor

and has been expended

in means of

Iv

shape

of

which

he gave up a certain

latter,
if

takes

he finds

which

for

equivalent
Iv

costs

and then

to
in

this
in

reproduce,

The circuit,
changes

have

been

create

labor

of
fit

for

He,

and in

however,

return

which

too,

in

it

has

not

yet

only

the

workers

in

the

next

in

the

for

period,

means of
has

given

up labor

of

its

altered

He can restore

then,

complete.

and received

commodities

he has received

is

So

now has money,

for

he consumes.

The labor

product.

money,

power.

work

He has

equivalent.

objects

equal,

II.

the

What

I has advan-

power.

in

The worker

quantity

I will

Iv.

of
of

latter

new values,

means

of

amount

labor

the

after

production.

department

the

up Iv

workers

capital-value--when

expropriates

He has given

wages

capitalist

purchase

The capitalist

money and exchanges

a value

useful

to

a commodity,

make himself

and thereby

he then

production

la-

their

the

of

to

as

These

work.

The capitalists
variable

capitalist

to

reproduce
of

power

receive

advanced

circuit?

capital-

money the

labor

II.

and then,

power,

they

this

the

they

has

I that

application

which

money they

He receives

ced money as wages.

power

means of

13

department

which

an

merchant

money,

The collective

for

i. e.,
the

is

the

with

by department

produced

back

get

use

from

exchange

equivalent,

The workers

consumption

In

money.

a commodity

receives

of

of

it

wages,

result

of

is

It

make.

proper.

advance.

the

exist

emrgence

production

in

power

the

us assume that

and makes the

I advances

of

let

case

present

is

capitalist

to

assumption

validity

of

prius

such a reserve
ist

an unreasonable

not

the
only

consumption,

exchanged

a value

power

that

Iv,

first

in

Although

all

the

money

14

department

I have

ex-

found

-106-

in

what
ment

I have means of

as they
in

the

need

or

is

Department

II

needs

for

valent
exchange

for

partment

II

ists

of

I in

in

its

ers

begin

to

production

now has part

part

of

the

the

and the

vanced
that

advanced

dition

of

to

process
Here

let

must

now complete,

has been
circuit

it.

This,

only

money.

They will

duction

for

money,

that

it

fraction

eventually

regard

between

is

purchase

the

and in

return

half

the

Is

their

workII

Department

go on as well--a
least

at

I's

exchange

of

II's

constant

condition

to

as refund
capital.
to

specific

I(v+s)

the

and the
of

capitalists

remainder

of

I's

acquire

in

full

the

bit

every

a crucial

play

to

Decapital

of

return
is

covered

capital-

The money originally

established:

will

15

to

additional

equality

still
with

portion

capitalism,

as it

place

us suppose

under

here,

we have
take

must

as the

it

note

Even so,

is

variable

De-

Iv.

to

again

The circuit
the

the

worth

period.

next

in

variable

requires

an important

the

the

an equi-

obvious.

from

original

it

we see that

reproduction

important

can advance

an equivalent

begin

to

they
in

is

production

orII.

of

workers

emanated

their

has

It

next

back

of

reproduction

the

once

must

department

Iv.

capital

of

reproduction

capitalist

which

constant

reproduction

Already

means of

once more

by Iv.

represented

gards

money,

(which

money

now have

form,

from

them,

had advanced

of

What happens

for

place)

capitalists

initial

this

capital

amount

received

production

consume

cannot

money they

the

them

to

means of

capitalists

of

it

which

the

depart-

of
no use

variable

the

of

consumption.

first

these
workers

to

capital

exchanges

the

I's

partment

money,

means of
then

hands

the

constant

in

this

capital--the

of

are

advance

What happened

now in

It

which

The capitalists'

otherwise.

iginally?

Iv

worth

They cannot

as money.

exist

again

production

The capitalists

values.

use

as variable

period

productively

of

exist.

currently
next

form

the

they

department

as much a conand IIc.

role

other

the

on.

The same
half

of

who advance

disposable
rest

is

It

later

circuit.

II

ad-

IIc.
the

means of
of

their

pro-

-107-

capital.

constant

in means of

Is

of

II

of

I have

got

have

Is

in

shape

now have

II

of

back

ments

have

tion;

I has means of

what

they

more than
in

In fact,

the

surplus

employed

consumed

II

could

the

under

the

constant

capital

not

achieve

restore
could

discussion

are

well

Marx's
is

most

already

abstract

introduced,

the

production

a very

take

through

ically-specific
talist
ficulties

mere

the

economy.
in

the

By extension

any system

of

of

of

both

cases.

somthing

extra,
they

workers

assumes

is

total-

reproduction--department
had started

production

reproduction.

the

of

mechanics
have

nor

repro-

we exhausted
basic

certain
important

three

above

capital,

simple

over

gone

highlight
the

industrial

of

points.

discussion

that

by the

complications

Preobrazhensky)

even

subsequently

exchange

The fact

that

monetary

circulation

is

an histor-

development

of

the

of

we can

the

expect

based

to

on market

makes

simple

monetary

result

economy

in

Marx

unencumbered

process.

condition,

to

(including

mediation

it

produc-

money advanced

by the

produced

We have

from

clear

supposition

complex

16

order

conditions,

writers

received

elsewhere;

subject.

in

analysis

I have

metamorphoses

so much with

the

source

simple

simple

explained
of

its

depart-

up anything

as the

value--which

the

of

here

concerned

It

surplus

and both

one has given

products

in

Marx and later

place

the

consumption

our

First.

in

embodied

own exposition
of

department

and

The capitalists

has means of

II

to

as personal

which

aspects

has returned
of

II.

exchange,

this

it

not

duction,

that

for

And without

As with

Marx's

had available

capitalists

not

i. e.,

we are

Neither

and now

consumption,

advanced,

form:

consumption.

The capital-

commodities,

means of

initially

an equivalent

corrected.

department

in material

need

first

value

ly

with,

them from

by each department

turn

the

they

hands

exchangeable

money they

the

easily

They need

money.

by purchasing

these

acquire

of

is

their

all

of

rid

has on its

This

consumption.

ists

the

however,

still,

reproduction

encounter
exchange

re-

must

the

capisame dif-

and a mature

-108-

monetary
cuss

expanded

there,

nor

ism,

in

the

ments
still

presume

present

in

1920's,

the

about

the

allow
cept

of

itical

(such

method

For

the

moment,

that

reality

implies

idea

is

simple

and tendencies

elaboration

of

conditions

sense,
are

of

of

the

bourgeois

of

in

both

achieved.

the

and thus

his

overall

it

would

take

the

the

our

us into
in

Any
"factors"

economic

society
The system

of

growth"

The
regular-

certain

capitalism

(and
as well).
is

the

Introduc-

following:

"balanced

out

conpol-

be seen

in

of

point

modern

III

permit

and Preobrazhensky.

Marx

post-capitalist

Volume

from

"balance"
even

use

when talking

be satisfied

out

point

reproduction

never

USSR in

therefore

must

or

of

entire

any analysis

which

we discussed

we must

development

for

Preobrazhensky's

of

It
which

to

and expanded

and limited
these

foreign

the

it

use

to

inseparable

state"

halt

term

process.

a static

a "steady

of

economics)

schemes of

ditional

however,

to

exchange

relationships

production

as a whole,

reproduction

as the

he does

and politics.

his

bourgeois

ities

philosophy

of

context

idea

of

we

Preobrazhensky's

the

use

reproduction

a proper

(and

as a category

not

those

practically

so that

economy,

tion.

is

equilibrium

the

by depart-

must

the

somewhat

(although
to

capital-

sufficient

in

like

Neither

and transformed.

clarify

expanded
of

will
factor

money,

Marx does

instead

is

commodities

economy

us to

but

or

proportions

circulation

that

schemes

simple

and value
values)

diswe
when

under

commodities

superseded

"

continuation

realm

this

extent

reproduction

of

reproduction

a complicating

totally

refers

NEP.

of

These

of

permits

economy under

their

at

exchange

"equilibrium.

of Capital),
conditions

the

been

This

Second.
term

material

becomes

to

case

simple

a commodity-socialist

has not

economy,

of

reproduction.

least

at

proper

then,

in

Soviet

the

the

mere production

interruption

This,

reproduction

the

be precisely

to

example

goods

continued

process.

the

the

that

and any

money,

the

in

can we assume that

guarantee

see this

reproduction

I and II

of

We will

system.

in

a conIn

constantly

-109-

in motion,

engendering

"stability"

are

conflict

only

Its

and contradiction.

relative,

never

moments

of

absolute.

inasmuch

But

as only one-sided
exchanges
are made, a number of
hand,
the
on
one
purchases
a number of mere sales on the othmere
the normal
we have seen that
exchange of the annual product
er--and
necessitates
of capitalism
such one-sided
on the basis
metamorphobalance
in
that
can be maintained
only on the assumption
ses--the
purchases
amount the value of the one-sided
and that
of the onefact
The
that
the production
sided sales tally.
of commodities
form of capitalist
is the general
implies
the role
production
which
in it not only as a medium of circulation,
but
money is playing
and engenders
also as money capital,
certain
conditions
of normal
to this
mode of production
and therefore
of the
exchange peculiar
it be on a simple
normal course of reproduction,
whether
or on an
scale--conditions
so many conditions
extended
which change into
into
so many possibilities
of abnormal
movement,
is itself
to the
a balance
owing
an accident
17
this
production.
of

since
of crises,
spontaneous
nature

The constant
supply
of labor
power on the part
of working
class
I, the reconversion
I into
the
of commodity
capital
of a portion
the replacement
of a portion
of
money form of variable
capital,
Ilc
II by natural
of constant
capital
capital
elements
commodity
demand
but
these
they
are
necessary
one
another,
premises
--all
including
brought
three proabout by a very complicated
process,
but
cesses of circulation
of one another
which occur independently
intermingle.
is so complicated
it offers
This process
that
ever
18
for
so many occasions
abnormally.
running
Marx arrives
sis

of

simple

to revealing

not

just

which

expanded

tion

that

the

to

are dealing

is

with

fund

a system

that

condition

is

but

can never

reach.

a point

the

only
is,

aside

the

latter

smoothly

it

must

department

is

constantly
which

capitalist

scale.
cru-

general,

is

starting

point

from

these

all

also

the

satisfy
IIc.

But

as we introduce

we also

production

excondi-

expandaccumu-

and see that

motion,

from

For

process-19

production,
in

analy-

is

which
in

I equals

and as soon

capitalist

around

not

in

of

of

analysis

reproduction

but

a moment

of

this

is

proceeds,

logic

the

of

his

on an expanded

reproduction
the

tendencies

means accumulation;

which

of

reproduction,

proceed

consumption

ed reproduction
lation,

than

other

reproduction

that

abstraction,

reproduction

nothing

panded

basic

an analytical

things,

to

simple
the

when he moves from

same conclusion

reproduction

Here he shows that

cial

the

at

we
see that

hovers,

-110The premise
I(v+s)
is equal to IIc,
that
of simple
reproduction,
is not only incompatible
with capitalist
production,
although
does not exclude
the possibility
in an industrial
this
that
cycle
total
of 10-11 years some year may show a smaller
than
production
the preceding
year,
so that not even simple
takes
reproduction
Besides
place compared to the preceding
that,
year.
considering
increase
in population
the natural
annual
simple
reproduction
that
larger
could take place only to the extent
a correspondingly
servants
would partake
number of unproductive
of the 1500 representing the aggregate
But accumulation
surplus-value.
of capital,
real
production,
capitalist
would be impossible
under such circumstances.
The fact
therefore
of capitalist
accumulation
the possexcludes
ibility
Nevertheless
it might occur
of IIc being equal to I(v+s).
in consequence
that
accumulation
even with capitalist
of the course
during
taken by the processes
of accumulation
a preceding
series
IIc might become not only equal but even
of production
of periods
bigger
This would mean an over-production
in II and
than I(v+s).
in any other
in
could not be adjusted
way than by a great
crash,
20
to I.
consequence
of which some capital
of II would get transferred
Preobrazhensky
more than
tion

under

between

the

this

tendency
before

writings

on equilibrium.

attempts

by even

into

we must

make a further

talking

reproduction

lationships
in

stressed
forget
is

true

movement
ily

the

same time

to

of

both

the

there

exchange
reveals

between
that

capital

these

to

light

of

Preobrazhensky

the

the
the

its

and IIc.

regularities

term

equilib-

Volume

I of

of

process

production

particular

social

As we have
section,

previous

reproduction
the

in

Already

society.

and of

I(v+s)

the

the

use of

of

and the

Marx discerns

social

Preobrazhensky's

turn

behind

lay

Introduction

that

as a

of

to

reproduction

at

imbalance

important

in

on method.

capitalist

when we look

the

is

more necessary
economists

reproduc-

and IIc

xamination
_:

22

this

the

he derives

It

Preobrazhensky's

what

was the

expanded

[I(v+s/x)]

be

as will

21

point

that

appropriate

the

bourgeois

about

explained

of

There

any

theorist.

In

and its

It

is
This/all

Third.

Marx

into

Marx,

of

reproduction.

we launch

"growth"

Capital

not

capitalist

sympathetic

a bourgeois

rium

of

own analysis

department

of

idea

this

(VKA 17).

fund

consumption

clear

his

capitalism

concrete

fundamental
get

when we discuss

clear

from

departed

never

schemes

Volume

of

regularities

individual

elements,

in

doing

are

those

of

already
we must

fundamental

Yet

re-

this
the

II.

in

the

primarMarx

at

reproduction

the

-111social

of specific
able

capital

tions,

or

is

not

simply

how money is

of

it

of wage labor;

the

a single

from

chase

ture

the

of

creation

ture,

of
as the

If

wealth.

capacities,

the

sphere

The same applies

by the
of

capitalist

a certain

to

capitalists

as a class.

tion

consumers

But they
half

of

ital

expresses.

the

reproduction

the

the

present

social

agents

the
In

of

function

also

a very

real

labor

department

II;

producers

of

take

the

of

movement

details

of

of

the
of

com-

will

all

23

circulation.

expropriated
both
the

and of

society

func-

capitalists
of

they

of

the

circulation.
the

are

in
the

accumulation,

take

one cannot

force

driving

place

other

of

capwithout
they

reproduction

expanded

of

be a rup-

reproduction

agents

the

and fuin

value

the

pur-

for

agents

and wage laborers--that

Thus

other.

of

the

capital;

relation--capitalists
The reproduction

must

There

of

and the

owners

they

function

that

reproduction

commodities

of

present,

surplus

commodity-product
simple

buyers

which

not

in

behind

that

as the

place.
or

Iv

that

reproduction

past,

does

class

repro-

process.

and as the
all

form

social

as the
but

produced,

movement

as the

of

power;

production

This

of

is

process

is

schemes
remember

cannot
of

reproduction

varifunc-

the

class

always

working

the

class.

portion

as the

the

reproduction

in

either

its

in

power

working

of

capital

we must

themselves

capitalists

new values,

social

these

have

the

the

within

labor

how the

expressions

commodity,

they

which

IIc

productive

acquire

shows

of

functions

class

of

modities

a portion

and algebraic

The working

to

advanced

and reproduction

how the

of

When we see in

against

numerical

sellers

a matter

simultaneously

duced as wage labor.

exchanges

The circulation

relations.

re-

capitalist

production.
This
ing
tions

the
it

and later,

explains

why so much of

circulation-reproduction
involves.

From his

expanded--reproduction,

Marx's

discussion

process
analysis

of
he then

to

the

the
is

devoted

is

particular

fundamentals
able

to

to

social
of

introduce

relatrela-

simple-more

-112into

and more complexities

for

relations,
the

instance,

capitalist

possible

of

system

and obtain

emergence

merchant

the

of

capital

modern

which

credit

system

precedes

as the

dominant

form

standpoint

it

quite

production

derivative

certain

of

or

and makes

economic

and so-

life.

cial

From this
the

nize

of

of

but

are
the

ideal

comprise
If
cause

capitalist

Soviet

resultant
ically
the

is

this

in

organization
socialist

duction

is
but

tions,

of

of

his

own use of

the

Soviet

transition
state

human labor

that
their

of

reproduction

reproduction

economy

demonstrate

of human

Preobrazhensky's

type

entire

to
analysis

of

of

value

problem

set

activity

of

that

law

repro-

expanded

rela-

social

in

he reveals
of

application

relations

society,

and

the

versus

of

the

theoret-

are

which

production

Soviet

is

analysis,

of

this,

Be-

Preobrazhensky.

conditions

And

that

25

obligatory

another.

themselves,

relations

economic

a given

economy,

in

of

and his

schemes

one particular

consciousness)

of

certain

political

his

The tendencies

transformation.

the

from

the

capitalist

of

so of

law

of

Preobrazhensky

development,

(the

power

of

moment.

regulators

regularities

premise

objects

of

of

As

social

object

and planning),
the

natural

equally

of

two antagonistic

life.

historical

specific

tendencies

accumulation
not

is

the

analysis

concrete

a given

realities

The very

categories

not

real,

it

as the

conflicting

embodied

at

Marx,

of

society,

of

the

of

the

are

which

society
true

his

They

analytical

bare

entire

we recog-

schemes.

complex

laying
24

Marx's

of

that

abstraction,
of

throughout

concepts

expression

task

is

own analysis

abstract

the

all

production.

schemes

developed

his

in

emphasized
they

he

which

society,

his

key

reproduction

portray

capitalist

the

of

is

an analytical

in

Marx

motion

construction

are

the

of

which

They

facilitate

which

character

models"

society.

and laws
the

formal

strictly

capitalist
tools

methodological

"objective

are not

of

the

presence

antecedent

the

them to

for

the

(and

one

too,

presupposes

with

all

of

its

-113social,

philosophical,

To summarize
of

the

will

ings

on expanded

prove

We have first
crucial

schemes
important

that

further

so far,

in

our

establish

of

ial

of

the

condition

in

economy;

a market
fact

and the
distinction

highly

under

between

the

are

might
of

concepts

from

arise

"equilibrium.
We are

articles
into

of

Marx's

which

use

of

the

to

are

the

dispel

of

as the
of

reproduction
to

it;

and the
repre-

real

be-

relations

introductory,

are

later

any

argument.
that

any misunderstandings

reproduction

schemes

or

from

the

notion

"
not

yet

to

ready

1926-27.

First,

treatment

of

already

there

prove

the

intimated
fundamental

leave

Marx

problem
above,
to

and move onto

of
the

almost

fixed

capital

relationships
all

of

our

Preobrazhensky's

digression

make a slight

we must

in-

production

capitalist--and

our

mater-

and as another,

ideas

these

build

the

algebraic

not),

substance

we will

of

valid,

revealing

Some of

are).

designed

the

As we have
will

upon

cautionary,

for

make up the
they

they

between

of

immanent

are

as objectively

device

and relations

process

nature

crises

(which

world

that

(which

other--society

Others

schemes

analytical

tween human beings

and provide

capitalism,

an outside

refined

contradictory

USSR.

the

circulation

the

of

writ-

inter-relations

the

monetary

continuation

fluid,

the

that,

of

sentations

the

of

of

a few ideas

and in

and as an exchange

role

use

Preobrazhensky's

categories

include

Marx's

at

and clarify

capitalism

basic

values

looked

of

modern

These

as an exchange

dispensable

emphasize

certain

analysis.

production;

we have

examination

under

reproduction
elements

to

mainly

reproduction

had to

implications.

political

discussion

our

reproduction

to

and

in

and go

some detail.

we will
subsequent

derive
study.

-114NOTES TO CHAPTER 1
Marx,

Vol.

(London,

1.

Karl

2.

Capital,

3.

Ibid,

p.

88.

4.

Ibid,

p.

99.

S.

Ibid,

pp.

100-101.

Our emphasis.

6.

Ibid,

pp.

101-102.

Our emphasis.

7.

Ibid,

p.

8.

"Letter
" July
in Marx and Engels,
Marx,
6,1863,
to Engels,
Selected
(Moscow,
1965),
142-45.
Marx referred
Correspondence
to Quespp.
Tableau
Economique
to study
as the first
scientific
nay's
attempt
in numerous
in
the regularities
of economic
reproduction
passages
For Quesnay,
Capital
Value.
and Theories
of Surplus
see Francois
Quesnay,
by Marguerite
Tableau
Economique,
translated
and edited
1972).
Kuczynski
L. Meek (London,
and Ronald

9.

(New
See in particular
Rosa Luxemburg,
The Accumulation
of Capital
Section
York,
1968),
One; and Paul Sweezy, Theory of Capitalist
(New York,
For an
1968),
Chapter
V and pp. 162-64.
Development
interesting,
but much more mathematically-oriented
treatment
of
Koshimura,
Capital
Reprothe reproduction
schemes, see Shinzaburo
book
The Koshimura
(Hove, Sussex,
1975).
duction
and Accumulation
schemes, without
covers only the very basics
of the reproduction
taking
we deal with in
modifications
up any of the complicating
deal with some of their
he does, however,
this
thesis;
more refinThough giving
the schemes a purely
exmathematical
ed aspects.
fairly
faithful
he remains
their
to Marx in stressing
plication
it is also written
exclusivenon-objective
nature;
unfortunately,
be inaccessible
ly in matrix
to most readers.
algebra,
and will

Capital,
Vol.

II,

(Moscow,

1967),

1970),
pp.

Chs.

IV U V.

57-64,

Our emphasis.

102.

10.

Capital,

11.

For a discussion
main discussion,

topic
and its relationship
of the latter
to Part I, below.
see the Appendix

12.

See Capital,

pp.

13.

that
It would seem that we are here anticipating
the problem
so preRosa Luxemburg in The Accumulation
and her
of Capital
occuppied
(London,
1972),
Accumulation
namely
Capital--An
Anti-Critique
of
the
realand
exchange
where the money comes from that
allow
will
ization
This is not entirely
so,
to take place.
of production
of accumulation.
since Luxemburg was concerned
with the problem
Nevertheless,
Luxemburg's
was an artithat
problem
we consider
found
ficially
be
in
its
within
that
created
one,
answer cannot
historical
the reproduction
premise
schemes, but only as the real
i. e., the development
capiof capitalist
of merchant
production,
tal and the eventual
system.
emergence of the modern credit

14.

It would have been quite

incorrect
to have said
He gives
gives up Iv in labor power.
up labor

II.

p.

II,

397.
to

our

450-51.

the laborer
that
power for the entire

-115day,

only part
working
of which is needed to cover Iv.
The rest,
goes to create
of course,
here represented
surplus
value,
by Is.
From the point
of view of the capitalist,
however,
the laborer
only gives up Iv, or an amount of labor
power equal to his wages,
is virtually
since the capitalist
oblivious
to the creation
of
He thinks
that the worker has labored
value.
surplus
day simall
his wages.
What is correct
ply to reproduce
to say is that the
Iv and receives
advances
capitalist
for it in Iv in
an equivalent
by the workers
he employs.
commodities,
produced
This represents
however.
In addition
only part
of the day's
product,
to this
for Iv the capitalist
"equivalent"
Is, which is
also receives
from Iv and exchanges
realized
separately
against
a different
(both in value and in use form;
of IIc
portion
to
see Appendix
Part I, below).
15.

Of course,
ing their
ity,
labor
of v--the
the workers

16.

Marx, for instance,

function
used his analysis
of money and its
develop
his analysis
the reproduction
to further
within
process
By the same token,
the following
of the modern credit
system.
passage from the chapter
on simple
reproduction
gives us some
idea of the real
into
complexities
monetary
exchange introduces
analysis
of the reproduction
schemes:

is that the workers,

the other
side of this
after
consumto the market as a commodmeans of subsistence,
return
This is the other
power.
condition
of the replacement
back their
capitalists
must receive
advanced money, and
must reappear
as sellers
of labor
power on the market.

an

"The fluxes
and refluxes
of money taking
place
spontaneously
on
in the exchange of the annual
the basis of capitalist
production
the one-time
to the full
products;
advances of fixed
capitals
extent of their
of this
value
value and the successive
extraction
from the circulation
in the course of years,
in other words,
their
in money-form
by the annual formation
gradual
reconstitution
of
hoards,
from the paraldifferent
a hoarding
which is essentially
lel accumulation
based on the annual production
of new
of hoards,
depending
lengths
the different
gold;
on the
of time for which,
duration
money must
of the production
period
of the commodities,
it can
be advanced,
and consequently
always hoarded anew before
be recovered
from the circulation
by the sale of the commodities;
lengths
the different
of time for which money must be advanced,
if only resulting
from the different
distances
of
of the places
in the
from their
furthermore
the differences
production
markets;
to the condition
of
magnitude
according
and period
of the reflux
in the various
lines
of
relative
size of the productive
supplies
business
businesses
and
of the same line,
and in the individual
hence the lengths
for which the elements
of constant
of periods
during
the year of reproduction-this
capital
are bought,
and all
these different
all
movement had only to
aspects
of spontaneous
in order to
be noted,
through
and made conspicuous,
experience,
to a methodical
of the
appliances
give rise
use of the mechanical
loanable
fishing
credit
system and to a real
out of available
"
II,
Capital,
capitals.
pp. 484-85.
17.

Capital,

18.

Ibid,

19.

We will

II,
pp.

pp.

498-99.

Our emphasis.

499-500.

not

deal

separately

with

the

mechanics

of

expanded

repro-

-116duction.

These will
become clearer
in discussing
Preobrazhensky's
in VKA 17 (see also Luxemburg and Sweezy,
analysis
in Note
cited
For the moment we need only mention
9, above).
that
expanded
between the consumption
also has the equality
reproduction
fund
I (v plus the consumed part of surplus
of department
value,
s/x)
but here it is a point
and IIc;
around which the process
revolves
is
never attained.
--it
20.

II,
This extremely
Capital,
important
pp. 524-25.
passages raises
have particular
a number of themes we will
to later
cause to return
First,
derives
on:
when we see how Preobrazhensky
the systematic
"over-accumulation"
fund of
of IIc as compared to the consumption
disproportion
I as the basic
inherent
in capitalist
expanded reproduction;
and second,
when we deal with the role of non-producin the Soviet
tive
consumption
system.

21.

See Introduction,

22.

I, Chapter
XXIII.
"But that which at first
Capital,
was but a
becomes, by the mere continuity
point,
starting
of the process,
by simple
the peculiar
reproduction,
result,
constantly
renewed
On the one hand, the
and perpetuated,
of capitalist
production.
incessantly
into
of production
process
converts
material
wealth
into means of creating
capital,
more wealth
and means of enjoyment
for the capitalist.
hand, the laborer,
On the other
on quitting
is what he was on entering
it,
the process,
a source of wealth,
his own.
bebut devoid
Since,
of all
means of making that wealth
fore entering
been alienhis own labor has already
on the process,
by the sale of labor
ated from himself
power, has been appropriated
it must, during
by the capitalist
and incorporated
with capital,
does not belong to him.
be realized
in a product
the process,
that
by which the
is also the process
Since the process
of production
is
the product
of the laborer
consumes labor
power,
capitalist
but into
incessantly
capiconverted,
commodities,
not only into
into means
into value
that
tal,
power,
sucks up the value-creating
into means of
buy the person of the laborer,
that
of subsistence
The laborer
therefore
that
conproduction
command the producers.
form
in
but
the
of
stantly
produces
objective
wealth,
material,
him;
dominates
that
and
and
exploits
capital,
of an alien
power
form
but
in
labor
the
the capitalist
power,
as constantly
produces
in
from
the
objects
of a subjective
separated
source of wealth,
he produces
in short
the
and by which it can alone be realized;
the
laborer,
but as a wage laborer.
This incessant
reproduction,
is the sine qua non of capitalist
properpetuation
of the laborer
duction.
" Capital,
I, pp. 580-71.

23.

Capital,

24.

in
17,
VKA
Preobrazhensky
insisted
this
point
on
unremittingly
Marx's
of the reproduction
analysis
when he repeatedly
warned that
and
of simple
the basic
principles
schemes established
abstract
but that
the need to study more concrete
expanded reproduction,
built
be
demanded
upon
this
that
analysis
economies
and societies
in
See
particular
and the abstractions
successively
removed.
VKA 17, pp. 35-6,47.

25.

For

II,

pp.

p.

15-17,

above.

420.

Preobrazhensky's
nomy see Introduction,

discussion
of
pp. 27-35.

the

categories

of

political

eco-

-117CHAPTER
MARX

initial

In Marx's
the

of

portions

be exchanged

ON THE

scheme of

is,

very

serious
of

take

place,

monetary

+ 500v

had to

exchange

is

this

that

durable
the

of

value

that

element
the

all

of

fuel,

fixed

capital

the

circulating

in

the

placed

in

lation

between

I(v+s)

What happens
last

realistic

assumption

of

economy.

the

if

at

and IIc
part

longer

of

than

the

of

one year's

is

to

intermediate
out

production,
then

basis

but
the

only
value

that

capital,

wear

more

the

not

production,

constant

case,

as the

transferred

time,

a tech-

physically

It

is

goods,
are

produc-

had to

be re-

or

our

which

and machinery
This,

after

capitalism,

or

time?

we can make under

Then a machine

this

however,

re-

original

hold.

plant

this

in

which

the

the

taken

for.

materials,

end of

the

is

could

in

being

c are

of

condi-

exchange

presupposes
This

employed

normal

circuit

we have

and tear,

would

turn

c stands

capital

of

the

in

notes

We presume,

economy.

what

all

fixed

complex

period

(raw

course

form

physical

capital

If

portion
of

consumed

wear

necessary

componentl

production

produced.

etc. ) and all

modern

remember

through

which,

commodities
its

had to

then

if

that

commodities.

the

production

of the means of

this

which
to

We must

tively

fixed

production,

one year

schemes.

total

of

the

the

that

Marx

now assumed

of

infrastructure
of

than

I and II

2000 IIc.

a fairly

required
classes

capitalist

fractions

large

it

though

advanced

nically

for

prevailed,

individual

the

we saw that

500s

We have up till

circulation

even

reproduction

departments

of

2000c

problem.

movement of

simple

CAPITAL

+ 1000s

+ 1000v

2000 I(v+s)

tions

OF FIXED

as follows:

II.
That

REPRODUCTION

commodity-product

were

1.4000c

worth,

say,

all,

make up the
is

any other

100 may last

for

the

only

form
ten

-118Each year,

years.

a value

transfer

is

it

tion

employed.
arbitrarily,

immediately

put

ing

(the

capital

iable

capital)

other

10 will

this

money,

until

after

longer

it

This

a great
Let
changed?
means of

is

value

again

the

of

means of
of

represents
in

means of

consumption).

the

be completely
against

past

present

equivalent
the

form

New values

consumed
those

labor

in

the

of

in

the

is

other.
is

used

They
no

up,

be replaced.

has not

machine

is

It

What is

IIc,

of

(c),

labor

added

exchange

present

(means
(and

which

labor

against
of

hence

of

exists
into
The
function

will

production).

as means of

past

newly

which

circulation.

(v+s),

ex-

circulation

be transformed

through

(i. e.,

form

through

and must

labor

being

physical

2000

also

must

whose consumption

capitalist.

scheme.

again

added

one

Why?

consumption

newly

of

be metamorphosed

There

hoard,

the

buy a new machine

to
type

exists

which

it

hoard

on the

has to

individual

the

reproduction

embodied

in

this

of

production,

a value

One,

need

to

varThe

will

on the

machine,

the

products.

money,

consumed--it

price

consumption.

for

their

two conditions.

must

the

money each year

100 in

be

circulat-

plus

10 in

as a whole.

and which

advanced

capital
of

for

market

money will

The capitalists

for

is 2000 I(v+s),

function

exchange

at

a value

as a replacement

to

the

the

value

money they

as so many means of

one represents

The other

that

society

2000 means of

an equal

the

this

would

whose produc-

on the

money.

productively

for

production,

physically

of

10 of

constant

accumulated
out

in

sold

replace

surplus
of

no difficulty

difficulty

There

worn

because

course,

of

adding

have

have

us look

form

year,

being

of

the

the

they

capitalists

changed).

portion

are

20),

to

circulation

completely

capable

of

of

a price

it

commodities

for

after

10 years

the

of

commodities

in

remain
year

value

realize

depreciation,

and equal

When these

into

and to

(assuming,

the

circulating

replace

Two, the

into

back

and have

can then

average

10 to

of

(say,
money

hand,

"

assuming

which
(i. e.,
old.

consumption)
replacement)

will
as

Values
must
will

-119p lace

take

only

Therefore,

in

for

money.

of

production
sold

its

not

used

physically
200 in

over

have to

not

all

of

of

it

is

that

II

does not

help

ter

Secondly,

need.

production

money it

have

tion
cause

to

it
to

when it

need

In

to

production

Ii's

replace
to

its

its

but

given

of

200 in

200 in

previous

keep part

200 in

them,

the

of

in

production.
200 in

the

means of

capital

de-

The result

consumption.
production

no mat-

however,

means of
of

that

doesn't

the

year,

gift

fixed

level.

but

hands

that

needed

a shortage

suffering

must

on its

this

back

Depart-

purchase-without-sale

II

means of

leftwill

consumption,
II

a virtual

I cutting

with
and II

II

does

this

here.

same scale,

whenever

place.

bought

be a crisis,

should
return

at

time.

machines.

future,

the

this

day when it

production

the

over-production

over-production,
if

in

(Marx's

200 but
keep

violated

this

of

as it

1800

present
of

it--department

means of
them

out

means

replace

will

means of

converse

has made department

advanced

the

towards

be available
took

I has a relative

it

of

IIc,

of

circulating

by a value
II

to

the

to

the

at

Department

purchase

im-

I needed

only

its

of

capital)

are

on producing

would

all

reproduction

200 in

transaction

it

(i. e.,

worn

may need

I kept

In addition,

its

I has
It

us here--if

would

the

department

needs

completely

money has returned

this

when the

of

simple

money for

department

partment

of

of

as a hoard.

means of

set

value

same value

however,

only

depreciated

the

buy the

because

It

saving

to

I will

money and purchase

buys,

fixed

its

of

another

I advanced

It

replacement.

Two conditions
ment

IIc

capital

money as a hoard,

replace

2000

capital

require

this

production.

up constant

II,

no longer

consumption.

fixed

from

take

will
of

and part

its

of

it

But

department

reproduction,

then

will

means of

capital

A portion

I.

means of
in

constant

II

of

production).

consumption

an equivalent

illustration)
of

means of

from

much in

value

process

Department

It

sold.
this

the

purchase

mediately

(means of

time

over

year
produc-

before

How do we resolve

I had

-120the

Perhaps

problem?

each year,

of production
II

the

whole

lot.

as fantastic

and surplus

personally)
up of

such

in means of

brings

in

present

the

II

kept

hoard

of

money until
of

up its

fixed

capitalist
the

is

capitalist

that

of

II's

but

will

accumulating

divides

their

fixed

replacement

in

we account

for:
of

part

must

cannot

complete

their

find

in

prior

not

capitalist

its

surplus

its

of

200

heart,
its

accumulated
with

the

with

a massive
logic

whole
and if

be sold,

it

is

and re-

circulation

II
toto,

How does

Is

for

the

of

Iv

the

their
of

sections:

and those

future.

At

equivalent
two

who only
our

for

additional

what

balance
an equal
portion

the

its

Those

in

part

who must

of

IIc

full,
Marx

replace

money for

exchange
of

part

and tear.

accumulate
of

do.

using

another

capital
wear

to

capitalists

kind,

same time,
fixed

out

set

in

capital

of

premises

Marx
of

portion

fixed

years.

into

is

a certain
their

the

within

This

be retiring

The exchange
of

a solution

year

a monetary

in

the

havoc

produced

every

department
capital

of

hook

the

What is

be replacing

will

capitalists

then

exchange

in

hoarded

only

I off

get

or
building

the

and diligently

and circulation.

have

money they

(and

goodness

wreak

we must

that
II

be realized

a halt.

production

in department

to

must

produce

we would

capitals

Marx notes

the

of

bargain

the

was ready

production.

clear

out

not
with

cause

to

re-

incompatible

and where

I were

is

this

productively

an additional

example,

of

capital,

comes to

production
It

it

individual

it

of

is

either

be earned,

must

with

part

produced

consumed,

on faith,

production

while

purchase

value

reserves

If,

crises.

not

totally

reproduction

that
it

that

buy

to

function

the

and socialism,

commodities

and un-

money and was ready

seems--except

where

them,

selling

when we discuss

capitalism

as it

production,

simple

under

advanced

a solution

capitalist

later,

see

in

amount

200 in means

an extra

them up without

an equal

We will
both

under

serves

keep on producing

storing

had accumulated

til

of

I could

look

IIc,

plus

that

II

after
the
is

-121to

prepared
ital

exchange

fixed

and whatever
division

Marx's

In such

a situation

200s of

department

I would

ment

section
it

it

must

case,

the
it

gets

just

as satisfactory

with

money it

That

the

the

money,

(2),

and needs

the

(1)

has

still

duction

from

modities,
sume;

It

money it
the

200c

is,

the

in

of

money,

I has
is

II,

is

its

which

thereby

production,
its

original

tremendously

is

department
have

There

from

hoard--it
not

it

buys

which

its

all

it

advance
significant.

will
of

It

adfrom

commodities
no further
II-section

200 in
what

I advances

money back

complete.

receives

full.

(2).

requires

is

in

Department

see.

II-section

of

obtained

consumption

back

this

II

we encoun-

department
to

easy

any way get

exchange

with
It

means of

conclusion

for

that

means of

that

has disposed

latter

received

I.

fact

in

as a whole

scheme.

the

commodities

cannot

circuit

and department
Marx's

of

this.

department

that

stem from

not

money which
this

We could

it

nec-

In

and it

receive

what

the

capital.
II

I purchased

and could

200 in

fixed

first

our

department

to

because

But

purchases.

from

department

200s worth

money for

II-section

(2)].

not

as opposed

purchase

vances

section

had advanced,

has received

has

the

II-

I has acquired

was department

to

a result

does

(2)

(1)],

from

consumption

(1)

of

money for

money depart-

this

Department

section

that

problem

means of

came from
returns

difficulty

the

could

[it

back

that

tered

[it

money

it

example,

200c in

With

purchase

Following

commodities

II-section

future

cap-

following:

the

exchange

and II-section

the

first

our

unlike

in

order.

consumption;

for

in

would

200c

in

production;

aside

set

advanced

is

have

200c

constant

retirement?

production.

the

purchase

means of

means of

essary

(1)

means of

Everything

in

needs

I's

then

(2).

(2)

circulating

for

we would

plus

II-section

its

ready

II,

200s in commodities
(1) 200c in money,

I.
II.

is

capital

department

of

for

as a replacement

means of

it

needs

in

procomcon-

productively

money return
In

any given

to

it.
period

-122the

of production,
replaced
form of

full

in

portion

must

IIc's

of

that

equal

fixed

capital

portion

is

which

is

which

and

retired
in

accumulated

the

a money equivalent.

is here evidently
The condition
fixed
that this
precedent
componII,
into money
of constant
ent part
capital
which is reconverted
to the full
of its value and therefore
extent
must be renewed in
kind each year (section
1), should be equal to the annual deprecifixed
II,
of the other
component part
ation
of constant
capital
in its old bodily
form and whose wear
to function
which continues
depreciation
in value,
to the commodand tear,
which it transfers
ities
in whose production
it is engaged,
is first
to be compensated
in money.
Such a balance
would seem to be a law of reproduction
is equivalent
This
in class
I,
to saying
that
on the same scale.
the proportional
division
puts
out the means of production,
which
it
must remain
since
produces
of labor
unchanged,
on the one hand
fixed
and on the other
circulating
component
parts
of the constant
11.4
of department
capital

We can illustrate
tion

both

within

division
II

that

must

200 in

of

section
requires

of

(1)

from

for

its
it

cannot

also

serious

than

of means of
have to

the

plight

production.

radically

200 in
Yet
(2),

has for

II

Thus
dispose

alter

sale

of,

100 in

of

on the
on the

I--a

account

of
for

it

and

is

simply

appear

would

as:

(1)

is

labor

within

it

100 in

with

of

100

II-section
even more

a like

amount

department

new distribution

sub-

that

all

perhaps
of

means

this

a shortage

same token,

re-

will

100 in

that

all

one hand,

other,

with

production

money is

shortage

this

that

altered

purchase
is

this

money and--what

The division
to

means of

By the

department

original

commodities

and 100 in

consumption).

of

than

I can only

left,
and,

our

money and II-section

because

I is

capital
balance

produc-

imagine

is

in

200 in

as with

and hoards

exchange

100c

exchange

production.

(means of

has a surplus

(2)

plus

total

But here

Is.

fixed

of

value

that

and that,

retirements

obtain

hoard.

commodities

unsold

II-section

department

money which
in

I will

means of

consumption

200 in

Then the

I can only

(1).

same,

a greater

money form.

that

clear

the

between

IIc

replace
in

II-section
ceive

I has

Imagine

simply.

very

stays

200s in commodities
(1) 300c in money,

I.
II.
is

I and II

within

accumulating

It

problem

department

assumption,
the

the

I would

between

-123and hoards.

retirements

department

within

the

II

in department

would

Alternatively,
II

have

might

100 from

need only

100 in money with

section

I's

demand for

partment
must

in

sell

purchase
200)

Even more

Because

(1).
cut
they
filled

needs

have,

each

their
suffer

try

its

300c

But
to

means of

production

sections

with-

department

of

money via

of

I's

production,
And this

is

would
in

in

to

(an over-production
part

of

by money;

what

of

to

department

its
Both

ensue.

order

of

what

coexists
I).

consumption;

with

its

coexists
(2)!

I has

department

the

So,

money for

I and II-section

eliminate

that

(1).

for

ex(2),

II-section

exchange

the

commod-

II-section

no use

it

what

its

means of

of

within

precisely

imbalance

sudden

production,

is

of

means consumption

consumption

de-

100 (not

II-section

with

of

be mediated

that

II-

money I has for

of

and a shortage

shortage

means of

less

I now has only

and a shortage

I only

because

First,

conversion

exchange

would

from

commodities

is

amount

because

commodities

must

200 in

incomplete

the

(1)

department

give

would

accounts.

the

of

production

commodities

consumption

And second,

a crisis

demand on the

two

of

after

as it

crisis,

as II-section

this

on two

of

in

purchase

regardless

cash.
the

the

production,

I.

suffers

means of

due to

Once again
back

to

exchange

hard

(2)

plus

striking,

stock

namely,

between

means of

has unsold

an unsold

which
not

means of
(2)

II-section

change,

be reduced.

Is--into

I has unsold

Why?

to

as a result

ity-product--200

with

have

commodities.

in money,

hoard.

The scale

Union

reverse:

any case,

of

Soviet

the

capital.

which

The latter

in

occured

fixed

division

disproportion

a one-time

of

department

(2).

what

only

by a severe

have unsold

I would

were

be seized

in commodities
100c in money,

1.200s
(1)
II.
Here

the

this

would

the
been

if

unlike

system

a shortage

suffer

would

(not

II

War),

Civil

the

Yet

I does
II-section
(2)

would

"over-production"

with

an actually

un-

-124In

first

the

production.

commodities

(means of

case,

I was left
of

"in

spite

important

first

that

can

a crisis

and

reproduction

dividual

the

where Marx

alongside

scale.

an

of

this

the

of

"S

the

money that
means

is

This

Marx's

Even under

the

we see

material

circulation

op-

over-produc-

reproduction,

in

the

unsold
of

example.

simple

imbalance

In

was not

on an unchanging

duration

passage
stated

we quoted

composition

period

replacement

of

within

department

I.

of

the

department

II

we emphasized

how an imbalance

of

rate

labor

it

a crisis

from

by importing

out

of

in-

these

parts.

In

the

the

IIc-(2),

production

had a shortage

trade.

is,

assumptions
from

foreign

I had

IIc-(2),

things

evened

(2)--that

conclusion

result

(1)

than

means of

reproduction

general

II-section

through

II-section

asbstract

uncomplicated,

of

of

than

have

could

was less

unsold

within

consumption

tion

but

with,

was greater

while

production),

IIc-(1)

where

IIc-(1)

hands,
They

of means of

posite

where

money on its

of

a surplus

case,

its

within

fixed

part

capital

A few pages

affected

later

last
in

the

sentence,
terms

of

division

Marx makes this

of

point

again.
if under simple
In short,
unchanged condiand other
reproduction
tions--particularly
volume
power, total
under unchanged productive
between
is
intensity
labor--no
assumed
and
of
constant
proportion
fixed
(to be renewed)
still
concapital
expiring
and fixed
capital
form (merely
in its
tinuing
to function
adding to the
old bodily
in
depreciation),
in
its
then,
the
products
value
compensation
of
to be reproduced
one case the mass of circulating
component parts
to
the mass of fixed
component parts
would remain the same while
be reproduced
Therefore
the total
production
would be increased.
there
I would have to grow or, even aside from money-relations,
in reproduction.
would be a deficit
II to be reproIn the other
if the size of fixed
capital
case,
duced in kind should proportionately
decrease
and hence the componin
fixed
be
II,
only
ent part
replaced
of
capital
which must now
increase
in the same ratio,
then the quantity
of the
money, should
by
I
II
reproduced
circulating
component parts
capital
of constant
that
would remain unchanged,
component parts
while
of the fixed
in
decrease
decrease.
to be reproduced
Hence
aggrewould
either
deficit)
(as previously
and surgate production
of I, or surplus
is not to be converted
into money. 6
plus that
If

the

total

volume

of

production

of

I were

to

remain

the

same we would

-125-

have still

another
IIc

of

part
form,

to

exceed

volume

of

were
the

then

partment

II

culating

means of

IIc

these

of

hand the

ume.

But how is

Marx's

now

decrease?

if

the

division

same,

a crisis

can

duction

in

find

itself

of the

needed

within

I is

capital

in
if

that

deficit

itself
II;

and,

that

make up circulating

ever

changes
then

Marx's
though

his

changes.

with

unsold

its

the

to

means of

a crisis

will

of
one

the

same volproof

con-

in

argument

on fixed

conclusions

are

to
is

indispensible

the

of

of

its

on

will

hands,

production

division

of

to

is

analysis
its

of

and those

keep pace
two

labor

circulating

make up fixed,

the

fix-

replace-

department

composition

so as to

pro-

between

rate

Marx's

of

demand for

capital

remains

means of

fixed

material

capital,

here

the
case

of

that

production

II's

if

the

that

is

IIc

production

implication
the

of

supply

proportion

adjust

arise

of

first

structure

either

means

discussion

our
The

division

In

the

in

capital.

or

result

constant
place

"If

elements

technical

ability

again,

may take

part

On the

department

the

by the

I fails

those

fixed

within

if

IIc

in

once

and cir-

semi-finished

conclusions

of

result

affected

department

capital,

principle

labor

The second

type.

between

output

of

de-

versa.

retains

circulating

capital--alters,

alternatively

a chronic

the

Il--specifically,

part

and vice

raw materials,

(i. e.,

social

constant

fixed

its

fixed

go down.

would

money
for

The fixed

change.

also

in

production

between

II

replaced

"7

will

department

the

of

or with

and

means of

to

class

replacement

of

circulating

ment

of

two

the

of

only

decreases,

if

established

analysis

be reproduced

portion

other

possible

the

proportions

circulating
the

circumstances

of

have

would

materials

that,

ed and

the

production

this

II)

capital
We have

of

total

and auxiliary

stant

production

production
and the

to

portion

same,

increases

parts

other

ducts,

I's

these

under

the

the

remaining

go up,

would

If

result.

types

with
of

what-

constant

as well.
essentially

stops

to

discussion

the

here;
in

and althe

rest

-126-

of

thesis

our

beyond

somewhat

the

relevance

emerge

rather

zhensky's

Marx's

of

to
fact

(especially

argument

how much of

anticipated.

In

further

make the

and will

go

show just

and their

conclusions

first

We must

stand.

order

had in

more clearly

compact

as they
in

Marx

own analysis

we hope,

will,

things

Marx has done

what

Preobrazhensky's
so,

leave

we cannot

in

doing

ramifications
of

Preobra-

easier

to

train

VKA 22)

follow.
we have

From what
ple

the

reproduction
different

and the

any but

assumption

that

tween necessary

to

produces

elements

capitalist
the

Then,

with

subdivided

the

department

tively.

Total

F (fixed

produces

I,
the

capital)

we get

department's
of

and separate

its

two dubdivisions
and C (circulating

of

which

we assume
let

as three

capital

throughout

us take
to

one.
our

I by the

let-

respec-

capital),

]
I-F,

3000c

I-C.

1000c

II.

2000c

social

+ 750v + 750s = 4500 means of production

capital
+ 250v + 250s = 1500 means of production
lating
capital
+ 500v

production

+ 500s

= 3000 means of

is

same as in

the

Marx's

now

reproduction.

simple

department

We

production

capital

constant

luxury.

development,

a new scheme for

be-

product

Since

capital.

of

initial

the

and that

capital,

technical

will

homogeneous.

and articles

fixed

production

when he showed how

II,

that

constant

composition

remove

totally

department

and circulating

same organic

[We have designated

ters

fixed

I is

of

sim-

components

We must

we divided

a mature

individual

the

I,

even under

composition

analysis.

department

of

between

material

consumption

which

that

clear

department

circulating

production

division

of

part
of

of

once

same with

that

basic

is

of

same with

place

articles

do the

paths

product
the

it

the

of

most

done
take

would

according

the

the

Marx had already

now must

problem

circulation

complicate

exchange

so far

said

for

fixed

for

circu-

consumption
scheme for

simple

-127We have

reproduction.
ing

the

to

assumptions
and the

rate

I and in

department

II.

Now, suppose
somewhat
fixed

capital

large

factories,

e. g.,

raw materials,

in both
ly

circulating

close

ever,

will

could

absorb,

on the

have

ters,

to

artment
tion:

far

and will
hand,

engaged

I-F).

have

with

produce

upon

exchange

in

exclusively

We then

find

enterprises

consumption--that
II.

which
is,

The breakdown

both

the
produce
will

might

look

other

their

something

a rural

of
great

feed

to

order

to

fixed

production
own department
this:

coun-

as
conhow-

market
areas,
and
their
mat-

simplify

capital

sectors

rural-agricultural.

like

the

consumption

countryside

two

means of

have

in

The urban

with

we have

up depart-

means of

cities.

production

strict-

functioning

than

in

same

The latter,

the

assumed,

the

The workers

their

of

many means of

the

that

the

rural,

is

originate

very

whom, we have

is

break

to

are

capital,

difference

and farms.

consumption

cannot

depend

most

there

production

capital

production

more means of
trade

where

produced.

obtain

that

constant

have

will

(means of

scheme

come from

our

we will

enterprises

to

our

capitalist
of

capitalistically

will

rural

that

consumption

I-C

of
part

So far

case,

The one urban-industrial;

contains

ment

from

by,

and capitalists
are

are

capital)

produce

other

workers

they

constant

sumption

means of

large

composition
I.

the

department

of

and capitalists

is

areas,

urban

assume

organic

this

Most

still

department

and recognize

portion
in

I accord-

composition

bringing

reality,
in

will

organic

same throughout

condition,

department

of

even though

tryside,

will

the

If

as well.

etc.,

the

department

changed.

circulating

We can

subdivisions

II

the

fuel,

and that

geographical.

ment

has

else

be produced

to

and that

regions.

universal,

the

historical

with

tend

will

agricultural
is

Nothing

line

both

exploitation

we add a qualifying
into

closer

of

in

production

leaving

we stated,

capital

of

divided

merely

of

(depproducEach

and means of
I and depart-

-128I-F.
II-F.

3000c
800c

+ 750v
+ 200v

+ 750s = 4500
+ 200s = 1200

I-C.
II-C.

1000c
1200c

+ 250v
+ 300v

+ 250s
+ 300s

For convenience
departments
I-

II

fixed

capital

particularly

has exchangeable
in

has only

800c

means of

production.

I-F

only

1200 in

of

the

700 in

means of

in

means of

production,

F by

sector

simple

reproduction.
II-F

while

much in

that

only

700 in

of

point.

means of

produc-

consumption.

has only

500(v+s)

means of

and must
to

constant

1500(v+s),

and requires

500 in

order

some

important

we take
of

worth

means of

production,

consumption

if

that

has a surplus

I-C

the

not

conditions

production

thus

and needs

with

is

consumption,

C.

700 in

dispose

of

and a surplus

in

offer

consumption;

means
II-C

while

the

of

same amount

has

II-C

them.

acquire

to

means of

a deficit

consumption

same magnitude.
is

It

fairly

be satisfied

in
all

can

if

the

sell

its

for

exchange
sectors

will

begin

again

next

to

us,

since

we took

our

everything

an important

one,

surplus

year.

figures

by disaggregating

we broke

and urban

rural

the

of

up.
since

This
the

scheme,

in

in

ex-

they

we have

no way depends

for

require
really

not

had been

to

producsurprise

and depart-

in

balance

established,

on the

700,

departments

sectors

respective

mutal

worth

Then all

should

which

can

production,

elements
result

reproduction

engage

sectors

consumption.

The relationship
it

simple

means of

material

for

Marx's

of

conditions

700 means of
have

tion

that

obvious

only
I-F

change.

is

means of

sector

of

ments

means of

Likewise

of means of

II-C

satisfy

of

needs

here

cannot

and a deficit

of production,

in

it

that

and some circulating

is

them

renamed

recognizing

This

cities.

interesting

we see that

tion

rurally,

F and C for

of
have

we might

(rural),

and II-R

the

same designations

the

More properly

be produced

come from

What is

I-F

and I-

will

will

kept

as I.

as well

capital

itself

we have

(urban)

and II-U

= 1500
= 1800

figures

before
however,
we

-129-

the

We could

with.

started

proportions

the

of

departments,

the

illustration

we chose,

Any imbalance,
of

into

circulation--and

plus

commodities,

per

any single
is

schemes of
same

two

different

modes

has

production

our

two

sectors

and

the

interconnection

an essential
conditions

are

of

of

within

the

in

the

sphere

to

of

in

the

system

the

sur-

the

pro-

no longer

reproduction

as a whole.

rural

of

been

production

at

capitalist
the

capitalist

seen this
only
representthe

industry.
real

between

Thus

situation,

them

has

Any imbalance
sector

petty-commodity

dawn

type.

petty-commodity

an historically

development.
the

moments

capitalist

discerened

the

Not

production.

Rural

by

just

has

production

historical

of

that

required

sector

how much we can manipulate

predominantly

extent

other

commodities

simple

production.

within

commodity-pro-

the

sector

what
hold:

would

by calling

only

and

capitalist

individual

exchangeable

deficit

characterized

reproduction
to

the

but

abstraction

of

in

other

given

we have

element

be rectified

be brought

an

proportionality

changed

No matter

etc.

of

for

urban

was

been

capital,

Historically

particular,

development

capitalist

the

exercise

between
at

supply

alone,

"disaggregation"

ed by

part

sector

reproduction.

have,

that

conditions

simple

they

Urban

the

no abstract

that,

of

and could

for

if

only

and even

shared by the

be redressed

only

short,

of

deficit

or

figures

product

same rules

then

In

This

the

could

amount.

apply

social

composition

surplus

one sector

different

employed

total

organic

any

duct

have

could
sector

been

in
in

the
large

could

circulation.

Within
industrial
its process
in
capital
which
of circulation,
functions
the circuit
of induseither
as money or as commodities,
trial
capital,
capital,
or as commodity
whether
as money capital
the commodity
crosses
modes of proof the most diverse
circulation
duction,
the
The
of
character
so far as they produce
commodities...
is immaterial.
from which they originate
process
of production
They function
they
in the market,
and as commodities
as commodities
into
into
the
the circuit
industrial
enter
as
as
well
capital
of
is
it.
It
in
thereincorporated
circulation
the
of
surplus
value
fore the universal
the
the
the
commodities,
of
character
origin
of
the
existence
of the market as world market,
which distinguishes
process
of circulation
capital...
of industrial

-130As soon as act M-MP is completed,

(MP)
the
commodities
cease
...
to be such and become one of the modes of existence
of industrial
capital
in its
functional
form of P, productive
Thereby
capital.
however
is obliterated.
their
They exist
henceforth
origin
only
in it.
of existence
as forms
of industrial
capital,
are embodied
it
However
true
that
still
to replace
remains
them they
must be
the capitalist
and to this
reproduced,
extent
mode of production
is conditional
lying
on modes of production
outside
of its
own
But is the tendency
stage
of development.
of the capitalist
mode
to transform
inof production
all
production
as much as possible
to commodity
by which
The mainspring
is accompproduction.
this
is precisely
lished
the involvement
into
the
of all
production
9
capitalist
circulation
process.

Marx,

did

then,

how capitalist

take

crete

of

production
We have

as his

point

This

is

for

the

the

not

however.

ed,

only,

of

of

commodities

be characterized
as we showed

of

the

ing,
those
in

the

moment in

above,

was not

production

relation

between

which

of

most

Marx's

another

detail

in

with

regard

separate

to

Part

be reach-

the

way we
the

namely

different

functions

II.

a crucial
in

the

con-

leave

to

conclusion

problem,

was

under

however,

derivation

us to

own

charac-

reproduction

scheme was no doubt

its

mutual

Preobrazhensky

up in

important

in

studying

qualitative

We will,
it

take

ma-

types
the

within

which

creation

of

the

types

as the

as its
its

technical
a question

and means of

function

function

just

process

social

of

consumption

means of

fixed

part

wealth.

the

of

Marx

material
in

constant

chose

will

that
to

balance

be-

but

also

general,

production

portion)

production
Reproduction,

structure.

of

circulating

its

development

a society's

by a determinate

means of

those

extending

what

economy.

Preobrazhensky,

and their

of

material,

analysis

two-sector

leads

develop

for

and circulation.

At any given

tween

the

reproduction

produced

his

Soviet

even

the
for

its

as we will

necessarily

conditions

of production

the

or

Although

have done here

in

point

will

consequence

as a conclusion,

moment,

discovery

analytical

terial

derived,

and in

production

to

framework

the

us with

first

the

according

starting

capitalism

this

is

This

teristics.
to

provide

and petty-commodity

inter-relation.
breakdown

fact

in

(broadly
capital
society

demonstrate

speakversus

utilizes
this

-131by looking

IIc

at

between

structure

figures

the

f,

to

and circulating

[ 600f+

200 ]c

+ 200v

+ 200s

[ 750f+

250c]c

+ 250v(c)

+ 250s(c)

[ 900f+

300c]c

+ 300v

+ 300s

become extraordinarily
against

must do so in
that

of

IIc.

the

means of

material

form

departments

The commodities

of

which
that

production

must

their

of

by the

letters

means of

production

the

500,

of

in

but

can only

function

within

up the

conditions

of

that

com-

of

means

form.

The
of

shape

a material
the

suf-

the

form

material

exchange

ex-

no longer

against

exchange

have

and must

is

It

have

values--they

appropriate

I(v+s)

has a value

reproduction

as well.

I-F(v+s)

capital,

continue.

simple

of

their

at

combined

I-C(v+s),

only

consumption

correct

production-qua-fixed

same with

conditions
Not

complex.

means of

the

the

as this

a system

to

must

c.

+ 750s(f)

In such

bined

by C or

technical

portions

capital

+ 750v(f)

I-C.

ficient

fixed

neces-

scheme and rearranging

and circulating

we designate

capital

sector

750c]c

II-F.

change

fixed

is

reproduction

[22SOf+

I-F.

II-C.

two

argument

and these

components,
if

our

the

has a given

too,

proportions

the

Again,

But

and circulating

by taking

according

I(v+s).

with

I as well--it,

proper

this

capital.

constant
or

the

illustrate

We can

exchange

fixed

its

in

be reproduced

its

department

to

extends

sarily

in

cap-

circulating

ital.
As the

scheme is
We have

satisfied.
and circulating
to

addition

assumed

constant
Marx's

to

that

the

quire

in

material
in

their

the

the

capital

initial

100% and an organic

note

set

two departments

constant

of

in

the

of

of

capital

I the

means of

capital;

the

proportions

departments,

all

assumptions

composition

form

same technical

of

three

four

between

fixed

to

in

to

one.

of

We must

f and c for

subscripts

one,

exploitation

of

a rate

production

these

subscripts

for

are

reproduction

simple

Ic

departments
Iv

and Is

refer
re-

represent

-132the

form

material
II

ments

produce
in

listed

In

means

scheme

to

exactly

tion

of

the

fund

of

500(v+s)

in

combined
in

to

replace.

need

to

combined

require

means of

amount,

constant

capital.

of

that

value

500 in

that

fixed

cap-

consump-

will

means of

condition

capital

with
to

consumption
from

assured

serve

consump-

this

can satisfy

is

Depart-

has an exchange

500 in

means of

only

has

I-F

means of

circulating

reproduction

material

of

production

II

constant

the

1500(v+s).

with
I-C

requires

departments

are

to

of

I-F

means of

there

production

exchange,

It

have

they

however,

this

their

replace

Simple

the

and can provide

Besides

500;

place

depart-

two

as follows:

capital

I-C.

to

exchange

refer

fixed

consists

of

obviously

take

The combined

total

subscripts

would

of

to

and
they

which

They need

also.

the

production,

capital,

same value.

return.

As the

commodity-product.

production

this

as circulating

of

exchange

and II-C

ital

tion

of

production

II-F

ments

constant

this

means of

own

no means

their
the

of

shape

their

of

this

give

point

of

view.
We see,
now has to

take

has a constant
2250 in

It

must

constant

ital

for

capital

in
tion

i. e.,

750 in

I-C.

technical

of

to

1000,

of

it

fulfilled

of

which

continue.

It

can acquire

capable
with

of

new,

I-F;

as well

internal

as the

must

the

itself

constant

has a

a naturally-

750 fixed

cap-

because

only

it

as circulating
in

latter

Yet

process.
It

in

have

capital

others.

with

I-C.

at

these

condition

I-F

production

functioning

production-qua-circulating
this

and I-C.

circulating
its

There

satisfy.

250 exists

only

capital.

can exchange

means of

750 in

us now look

Let

It

I-F

can provide

composition

I-C.

production

between
it

which

to

condition

however,

needs,

750 from

So we see that

has been

of

as circulating

means of

and which

these

the

value

production

has 750 in
capital

of

another

exchange

3000,

It

these

obtain

form,

useful

of

capital.

because

capital,

an internal

place
capital

fixed

is

there

of
this

turn
that

needs
originate

simple
in

turn

reproducmeans

-133is

there

that

a new possible

a new point

of

disturbance.

I(v+s)

to

take

were

the

necessary

tal

were

physical

[2500f

I-F.
II-F.
I-C.
II-C.

+ 200s

[ 750E + 250c]c

+ 250v(c)

+ 250s(c)

[ 900E + 300c]c

+ 300v

+ 300s

their
II.

what they

need

the value

of

the

ferent

is

ital

not

fixed

We have
origin.

production

all

the

in

10

to

of

within

I-C

constant

of

The result

way around.

will
But

to

be that
would

difcap-

reproduction

canI-C

capital.

serve

It

can

have

will

250 in
as part

of
no

will

mean that

production

have
its

to

un-

capital--have

means of

I-C

is

as it

exchange.

constant

more,

exactly

of

of

acquire

circulating

and a surplus
can only

depart-

that

circulating
to

ex-

department

I-C

famine

this

able

then

they

a goods

to

But

some department's

effect

both

thing

simple

capital
enough.

which--since

of

has stayed

constant

capital,

and I-C

individual

fixed

that

ensure

were

What is

The only

ratio

easily

still

each

same.

down

capital

capital.
of

be imposbreak

to

how I-F

of

each

circulating

I-F

with

portion

industrial

the

500 in

only
750 in

production

circulating

purchaser.

is

enough

requires

this

are

capi-

still

were

consumption

and circulating

production

is

hand has

means of

II

now has a higher

alone

250 in

means of

if

this:

terms

commodity-product

while

500 of
of

fixed

total

I-F

I-F

other

deficit

needed

departments

both

before,

same in

the

economy as a whole

go on.

exchange

the

the

And this

on the

sold

in

that

than

was.

s for

v plus
Conversely,

and of

like

+ 200v

combined

and even

constant

[ 600E + 200c]c

has remained

the

might

each department's

+ 750s(f)

process,

and circulating

and I-C

+ 750v(f)

Everything
change

fixed

look

entire

IIc;

combined

I-F

might

the

between

reproduction

between

of

+ 500c]c

in

exchange

the

with

simple

exchange

structure

the

between

Such a disproportion

to alter.

ments

full

then

even

technical

or the

in

proportions

internal

the

dislocation

of

Even if

place

satisfied;

if

sible

point

cut

variable

of
back

-134and hence

capital,
its

justed
it

constant

in

capital,

constant

is

result

a general

because

and all

ing

capital

in

the

department

Every

latter

of
still

could
Under

be foreign

250 in

the

division

native
for
This,

fixed

that

purchase

whatever
of

simple

and hoarded

Marx cites

in

however,

engenders

fixed

in

goods,

means of

his

example,

other

of
could

they

that

serious

problems.

I-C

the

its

would

imbalance
Here

the

of

surplus
needed

ma-

make up I-C's

could

one other

of

the

way out

capital.

might

meant

needed.

of

consider

productivity

for

and import

and which

circulat-

a drastic

only

fixed

etc.,

also

to

of

even though

export

the

of

II,

the

production

We could

fixed

capital

discussion

equivalents

etc.,

economy as a whole.

capital

his

The

requirements

fixed

reproduction

intermediary

ll

the

goods

values,

precipitated

of
of

circulating

production.

of

departments

Our economy

same.

capital.

labor

concluded

of

it

of

of

proportion

capital

both

cut

material

a shortage

The intensification

ours:

the

in

to

or possibly

semi-finished

destruction

internal

production

forms

have

will

of

or

adthat

capital

II-C,

or

amounts

raw materials

the

entire

II-F

as soon as it
fixed

of

necessary

changing

as Marx

and other
of

in

own constant

be the

supply

unemployment,

its

raw materials,

shortfall

too,

assumption

trade,

would

chinery

They,

a change

between the replaced

solution

of

was affected;

contraction

the

shape

crisis,

the

Then either

obtain

By simply

within

alteration

the

of

I-F.

department

the

origin.

agricultural

to

exchange.
to

would be reduced

value

capital

be able

not

would

surplus

through

can obtain

both

of

total

its

prove
labor

alter-

suitable
within

I-F.

But
ital

of capa shifting
such a change would not take place without
from one line
and
of I to another,
and labor
of production
Furdisturbances.
forth
every such shift
would call
momentary
labor
(in so far as extension
intensification
would
thermore
of
and
its
[I-F
for
I
in
have
of
more
mount),
exchange
our example]
would
be
for
[I-C's]
Hence
less
there
II's
would
own value
of
value.
12
depreciation
[I-F].
a
of the product
of I
Even foreign
italist

trade

economy,

has
with

it
its

difficulties.
world

market

Once we presume
and mutual

a world

inter-relations

cap-

-135between

percussions
trade

eign
the

its

parts,

a disturbance

in

others.

Any attempt

all

else

somewhere
house,

stocked

closed

national

for

it

that

extent

where

as Marx argues,

would,

every

would

in

the

with

gives

"only

is,

fill

and its

ensuing

transfers

the

disproportion

in

the

disproportion,

the

division

to
labor

of

is

not

some idle

holes

in

the

economy of

has

presumes
its

world

ware-

its

own demands

Thus foreign
to

contradictions

some

production,

own trauma,

disturbances.

for-

via

market

market

unit

a wider

trade,

sphere

and

'13

concludes,

only

and disturbances:

proportions

extend

up the

The world

latitude,,

Marx

merely

have re-

necessarily

the

solve

some change

productive

them greater
There

to

economy.

proportionality,

to

one will

The world

world.

goods

national

as Marx notes,

require

in

one durable

The abolition

of

to

solution
capitalist

these

dis-

production.

form of reproduction
Once the capitalist
is abolished,
it is only
a matter
of the volume of the expiring
portion--expiring
and therefore to be reproduced
fixed
(the capital
in kind--of
capital
which
functions
in our illustration
in the production
of articles
of conin various
If it is very large
sumption)
varying
successive
years.
in a certain
year (in excess of the average mortality,
as is the
in
then it is certainly
case with human beings),
so much smaller
The quantity
the next year.
semi-finished
proof raw materials,
ducts,
for the annual production
and auxiliary
materials
required
things
of the articles
remain equal
of consumption--provided
other
decrease
in
not
consequence.
--does
Hence the aggregate
would have
production
of means of production
This can
in the one case and decrease
in the other.
to increase
There
be remedied
by
over-production.
only
a continuous
relative
procapital
must be on the one hand a certain
of fixed
quantity
duced in excess of that
on the other
required;
which is directly
hand, and particularly,
there
of raw materials,
must be a supply
(this
in excess of the direct
applies
etc.,
requirements
annual
This sort of over-production
to means of subsistence).
especially
its
is tantamount
by society
to control
the
of
means
material
over
it
is
But within
an element of
reproduction.
society
capitalist
14
anarchy.
These
of

fixed

quent
from

capital,

will

discussion.

In

Marx

brazhensky

made from

extrapolations,

conclusions
was to

immensely

prove
the
that

use to

first

place,

anticipate
analyze

both

Marx's

analysis

important
they
a)the
the

have

to

of
all

allowed

theoretical
Soviet

system

the
of

reproduction
our

us to

subsederive

framework

Preo-

and contemporary

-136in

capitalism,
basis

on the

technical

ent

had abolished

mately,

capitalist

but

are

produced

cope

the

arise

necessary
differ-

with
15

labor,

and

impasse

the

and which

sufficient

material

that

capitalist

circulation

places

upon

where

which

wealth,

could

and advanced

and

(and ulti-

reproduction

foreseen

in

so preoccupied

disproportions,

these

can be increasingly

which

sectors

1920's,

the

with

that

exchange.

more developed

the

by

with

fetters

to

where

of

schemes

problems

economy

highlights

in

a society

needed

more naturally

nomy is,

an

by market

production)

flexibility

within

reproduction

b)the

and

productivities

itself

the

the

construct

economy;

own conclusion

Only

which

occur

differing

found

economy

Preobrazhensky.

the

place

be mediated

Marx's

Secondly,

the

existence

and

must

Soviet

its

of

needs

reproduction

take

to

need
in

sectors

must

elements

material

the

two

of

reproduction

when

the

particular

attain
will

which
a capitalist

and coped

eco-

with

under

socialism.
We should
from

strictly
tion

would

loci

of

note

that

these

an analysis

of

simple

also

increase

the

portion

is

inherent

in

process

Even at

the

level

ties:

had to

which

medium of

market

revolution

in

in

achieve

backward
in
the

his

a way out.

Only

her

participation

in

a mixed
expanded
and in
the

analysis

of

then

_ ,

midst

state
this

system

overcome
division

of

economy

It

offer
political

of

labor

even

no accident

that

that

concluded

could
the

is

eco-

the

a private

of

twen-

the

via

dilemma,

it

could

in

reproduction

sector.

world

dispro-

itself.

Union

commodity-socialist

the

even more

we have managed to

Soviet

socialist

examples

reproduc-

reproduction

however,
the

our

show how such

expanded

capitalist

an international
16

of

in

and provide

process

we will

confronted

than

advanced

ion

Part

the

reproduction,

which

exchange,

more technically
Preobrazhensky,

simple

famine

The goods

nomy,

the

situation

Expanded

III,

in

the

reproduction.
of

Later,

highlight

arose

complexity

breakdown.

of

disproportions

the

only

Soviet

obstacle
which

Unto

possessed

-137NOTES TO CHAPTER 2
1.

is

It

and
ital

important
"circulating
for
Marx

and circulating
acteristics

2.

3.

here

Marx's
"fixed"
clarify
use of the categories
(Capital,
II,
Chs. VIII,
CapX, and XI).
capital
is not a thing,
but a social
relation;
and so fixed
have nothing
to do with
the material
capital
charbut with
the way in which
of commodities
their
value
to

is transferred
Thus fixed
to the annual product.
is that
capital
in a greater
part of the productive
capital
whose value remains
fixed
in the means of production,
i. e., outside
the
or lesser
part
is transferred
to that of
of the annual product--its
value
value
Cirthe product
only gradually,
over several
production
periods.
is capital
is transferred
capital
culating
whose value
entirely
in the course of a single
to that
of the product
productive
period.
follow
from this
distinction:
Several
First,
things
the differenbetween fixed
has nothing
tiation
to do
and circulating
capital
between machines
and raw materials,
with that
or between means of
insofar
production
and means of subsistence,
except
as certain
types of means of production
transfer
their
value more or less slowly as a function
But, notes Marx,
of their
physical
properties.
fertilizer
is fixed
if its value
is not wholly
imparted
capital
in one season;
to the crops it helps produce
converesely,
coal and
fuels,
in any product
although
are
other
not physically
contained
consumed and hence their
circulating
capital,
as they are wholly
is completely
transferred
to that
of the product
within
a
value
is not made
Second, the distinction
production
period.
single
kinds
Variable
between different
strictly
of means of production.
it is a capital-value
capital,
since
advanced in the course of
is also part
Here we must make
production
of circulating
capital.
distinction.
Just as the circulating
part
of constant
a further
involis not the same as the physical
capital
means of production
is transferred,
so
ved, but only a question
of how their
value
is not the same as the
the variable
portion
of circulating
capital
labor power of the worker
that
sustain
or the means of subsistence
It is only the value of the variable
the laborer.
as a
capital
Third,
the
in the course of production.
capital-value
advanced
is one entirely
distinction
between fixed
capital
and circulating
Marx
important,
is
This
the
attacks
as
productive
capital.
within
i. e., money capital
Smith for confusing
and
capital,
circulation
industrial
forms
functional
(which
that
the
commodity
capital
are
capwith circulating
capital
assumes in its
path of circulation)
in
by
ital
(i. e., capital
is
distinguished
the
which
manner
which
be
it transfers
its value to the product,
that
only
can
something
form
functional
has
done in production,
i. e., while
the
the capital
of productive
capital).
is,
let
this
This/
The
not
would
of course,
capitalists
an abstraction.
idle,
but would make it available,
via the modern credit
money lie
does
however,
This,
to
the
system,
capitalist
as a whole.
class
individBoth
the
in
the
the
not alter
any way.
nature
of
problem
back
the money needed
ual and collective
earn
capitalist
only
can
increments;
in
little
and
to replace
time,
their
at
a
machinery
a
but
itself
the machinery
time,
require
will
over
only wear out
will
For
immediate
life
in toto at the end of its
span.
replacement
hoard
limits
the possibilities
this
accumulating
and
of employing
by
depreciation
fund--for
of
accumthe
the
purposes
--represented
Ch. 8, below.
ulation,
see Part III,
This

relates

to

the

somewhat

difficult

discussion

in

Volume

II

of

-138(pp. 433-37),
Capital
where Marx poses the problem
of how to compare the value components
of the social
product
with its material
form.
In any given production
is obyear the new value
created
into
by the application
viously
resolved
what is created
of living
i. e., what appears
in the value of commodities
labor,
as v and s.
for both departments
Taken together
these represent
the aggregate
fund of the society,
consumption
and so are materially
represented
If we look at the reproduction
as means of consumption.
schemes
indeed,
the sum of I(v+s)
we see that,
and II(v+s)--i.
e., everyis personally
thing
that
the total
consumed--equals
product
of deII,
Yet the
these means of consumption.
partment
which produces
that make up each department's
commodities
product
obviously
contain
to it;
a constant
capital
value component
which is transferred
clearly
new means of production
what is more, quite
are produced
in each production
by
year,
and these contain
new value created
And here is the source of the conthe application
of labor
power.
fusion.
in a year's
All of the newly-created
value
social
product
is resolved
into v+s.
Yet all
newly-created
contain
use values
both a new value
i. e., a
component and an old value component,
is simply
in the course of production.
transferred
value that
is embodied directly
in the exchange between I(v+s)
This duality
is new labor,
I(v+s)
and IIc.
whose value
exchanges
against
a valby the constant
i. e., by a value
capital
of II,
ue represented
(assuming
in the
that
over in one year)
created
all
of c turns
is a sum of values
I(v+s)
the enthat represents
previous
year.
total
tire
even though each disproduct,
newly-added
value of I's
both c and (v+s).
This is why we can
product
creet
of I contains
to I(v+s)
Conversely,
IIc,
refer
as new values.
although
existing as means of consumption,
sense part of
and hence in a social
(which,
the newly-created
values
of society
as we noted, is equal
is really
to the total
the old value component of
product
of II),
II's
What we have is newly-created
product.
value
exchanging
in the annual product
against
only because
old value,
which exists
it has been transferred
from values
in a previous
year.
created
And
II's

is

if
in the year
before
that
surprising
we consider
by I(v+s)
constant
of that
capital
wore out and was replaced
i. e.,
in that
by new means of production
that,
were new
year
year,
(and
is
Thus I(v+s)
in the present
to
values.
replace
going
year
hence
I(v+s)
This
year's
exchange
against)
year.
of the preceding
Although
this
labor
last
newly-added
exchanges
year's.
against
it
distinction,
prove
exceptionmay seem a rather
scholastic
will
important
ally
of the accumulation
once we take
up the question
this

not

of fixed
capital
the latter
turns
4.

Capital,

S.

Ibid,

p.

472.

6.

Ibid,

p.

472.

7.

Ibid,

p.

471.

8.
9.

Capital,

10.

II,

under conditions
in
over solely

p.

469.

See Appendix

to

Part

II,

p.

113.

The Russian
Theoretically,

term

Emphasis

I,

assume that
where we no longer
below).
(see
III,
Part
one year

added.

below.

Our emphasis.

tovarniy
literally
golod
means "commodity
this
translation,
would be a more correct

famine,
because

"

-139it

the dual nature

reflects
of the Soviet
economy, which Preobrazhensky characterized
as commodity-socialist,
the category
since
had not been transcended,
of commodity
not even in the state
secIn these terms we could speak of a "goods"
famine when the
tor.
in the Soviet
no longer
existed
commodity
economy and we had only
(see Preobrazhensky's
discussion
in
products
topic
state
of this
"The Law of Value in Soviet
Economy, " in The New Ecothe chapter,
Convention,
however,
has
as well
as our Introduction).
nomics,
"goods famine, " and we have retained
been to use the phrase
the
term only for this
reason.
11.

in another
We could solve
If the combined
the disproportion
way.
demand of departments
II for means of production
from I-F fell
from 1500 to 1250, and their
demand for means of production
from
I-C rose from 500 tO 750; and if I-F and I-C held their
respective
from both departments
demands for means of consumption
II constant;
then the latter
would have an exchange surplus
of 250 in money from
I-F,
their
now greater
which they could then use to purchase
amount
from I-C.
I-C would then have a money hoard
of means of production
it
the means of production
of 250 with which it could purchase
Then the system would be in equilibrium
and the
needs from I-F.
The figures
to it.
money I-F would have to advance would return
might appear as follows:
I-F.
II-F.

[2500f
[ 500f

+ 500c]c
+ 300c]c

+ 750v(f)
+ 200v

+ 750s(f)
+ 200s

I-C.
II-C.

[ 750f
[ 750f

+ 250c]c
+ 450c]c

+ 250v(c)
+ 300v

+ 250s(c)
+ 300s

Here departments
II together
capital
purchase
only 1250 in fixed
from I-F.
hand they purchase
On the other
750 in means of producfrom I-C.
Let I-F advance 1500 in money for its
tion
combined
II buy back only
Departments
purchase
of means of consumption.
1250; so I-F has lost
some of the advanced money (250) and has un(also
II now ex250).
But departments
sold means of production
directly
I-C for 500 means of
change 500 means of consumption
with
but deI-C needs only 500 in means of consumption,
production.
from
II have an extra
250 in money which they obtained
partments
their
I-F;
unequal
purchase
and sale with
and I-C has 250 unsold
for
750
it
has
means of production
exproduced
available,
since
So departments
but the latter
bought only 500.
change with I-F,
II obtain
from I-C,
750 in means of production
the
while
a full
has sold everything
latter
it has to sell
and has, in addition,
it takes this
250 in money that
it did not have before.
Finally,
in
had
from
I-F,
turn
money and buys 250 in fixed
which
capital
1500
it had produced
these 250 lying
idle
due to the fact
that
for exchange with departments
but was able to sell
II,
only 1250.
We can see that
just
equilibreproduction,
on the basis
of simple
rium can be attained
of excircuit
only via a very complicated
form
in
We will
in
this
change.
this
our
exact
meet
problem
again
discussion
below).
IV,
(see
Part
famine
Union's
of the Soviet
goods
12,

II,
here is that
capital,
The process
Marx is describing
p. 472.
More of
of non-equivalent
exchange between the two departments.
Its labor
The only other
alterwould exchange for less of II's.
I,
from
II
to
native
so that
would be a transfer
of social
capital
in the
the two departments
could then exchange equivalent
values

-140In the Soviet

quantitative
necessary
proportions.
economy under
find
NEP we also
but
dirin the reverse
non-equivalent
exchange,
from
the petty
are transferred
ection--values
production
sector
into
into
departt he state
the state
sector,
primarily
sector's
is a vehicle
for
This
into
transferring
the latment I.
values
the social
ter
towards
and thereby
redistributing
capital
an inWithout
this
the shortage
output
of means of production.
creased
heavy
industry
have
of means of production
of state
could
only
(abstracting
from
foreign
been "liquidated"
by abolishing
trade)
(and this,
in the very
as'we
non-equivalence
shall
see below,
only
have made state-produced
This
run).
would
short
means of profor
duction
the private
relatively
cheaper
sector
and more acceshave further
Thus the state
to the prescould
sible.
accommodated
between
of the market
and relieved
some of the disproportions
sures
its
but only
the countryside,
relations
with
at the expense
of its
industry
to accumulate
ability
and supply
all
of state
continued
Under
these
conditions,
which
already
with
means of production.
that
presupposed
equilibrium
on non-equivalent
exchange,
was based
be tantamount
the Soviet
to adopting
the solution
economy
would
Marx described--i.
transfer
e.,
a de facto
of values
out of the
sector,
or a relative
state
subsidization
of the petty-commodity
We should
that
to a transfer
sector.
only
note
of
when we refer
from one sector
to another
values
or department
we are not talking
but about
the moving
of actual
entities,
values
as
about
physical

a command over labor

labor
social
and the
13.

Ibid,

pp.

14.

Ibid,

p.

15.

See the
above.

16.

It

power
total

and hence as a channel

social
capital.

for

113,

on pp.

reorganizing

472-73.
473.

passage

from

Capital,

II,

p.

quoted

129-30,

implications
is this
inability
to recognize
the political
of
Union's
the Soviet
characeconomy that
relations
with the world
interpretations
terizes
the traditional
of the debates
economistic
Day (see
in particular
the argument
of Richard
of the twenties,
Day treats
Note 5, pp. 75-76,
above).
pp. 16-17 and Introduction,
foreign
devoid
trade
of particular
as a technological
category,
limfails
historical
he
the
Thus
that
to
see
social
and
content.
its to the Soviet
Union's
were
with world capitalism
relations
determined
the governby the levels
trade
only partly
of foreign
to adopt or which the economy could
ment was or was not willing
had
in
to careits
the
total
addition
support
state
with
output;
fully
that
of the economy to producassess the fact
adaptations
for the world market raised
tion
the serious
of what
question
kinds of relations
Capitalist
these were to be:
or tightly-conEconomic relations
by the monopoly
trolled
altrade.
of foreign
form
have
they
of the
them,
part
to
ways
as
a political
character
that
enthe
systems
process
economic
of reproduction
of
specific
become a question
of the abilthey immediately
gage in them--hence
ity of a given social
types of socparticular
system to reproduce
ial relations.
The capitalist
more
could have been nothing
market
than a stop-gap
assismeasure for the Soviet
economy; eventually
tance from other
socialist
countries
would have been necessary,
for only this
of
the socialist
could have safeguarded
character
the Soviet
economy.

-141APPENDIX
THE

REPRODUCTION

from
came

tion
II

the

of

analysis

into

where

two categories,

that

of

Preobrazhensky

that

go beyond
of

fixed
it

was only

of

capitalist

brazhensky
only

in

1931,
crises

a passing

for

fixed
ular
the

poses
ing

any elaboration

only

the

fixed

to

need

the
for

capital,

Second,
directly

to

combines

both

the

Marx's

First,

the

of
the

a two

the

the

exclusive
a

(which,
is

It

to

this

VKA 17 when he emphasizes

account

'

fixed

the

the

of

mater-

Marx's

section

the

VKA articles;

up the

taking
of

on

question
Preo-

that

capital,

it

even then

construction

in

to

of
it

of
of

our

was

has to

in

his

be drawn

a scheme for
analysis,

II's

in

out

the

in

our

pur-

deriv-

actually
discussion

of

by implication.
fund

consumption

simple

partic-

famine
for

valuable
to

department

and a value

goods

came closer
he did

of

reproduction

the
is

of

reproduction

argument,

entire

II(v+s)

than

the

of

behind

Marx

scheme

argument

analysis

question

the

of

analysis

tendencies

analysis

sector

the

a material

II

and comprise

bourgeoisie).

analysis--and

central

that

extent

where

although

of

thematically

USSR; by contrast,

the

department

two reasons.
is

Marx's

form

throughout

accumulation

of

discussion

capital
to

part

reference.

We deferred
II(v+s)

and the

of

Volume

of

and luxuries

exchange.

unmentioned

inspira-

section

fund

and take

analysis

Marx's

original

class,

when he was specifically

this

noted

in

and their

goes

working

capitalists)

refers

value

the

(which

by the

only

reproduction
however,

capital,

the

the

from

consumption

the

LUXURIES

scheme from

If

capital.

the

of

AND

two-sector

necessities

consumed

a simple

his

was certainly

of

discussion

elements

fixed

divides

Marx

are

ial

of
it

all,

understandably,

need to

out

consumption

portion

substantial

at

NECESSITIES

work

consumer

individual

of

source

not

reproduction
Marx

of Capital

OF II(v+s):

did

Preobrazhensky

TO PART

reproduction
problems

of

leads
that

circula-

-142-

extremely

are

tion

in our

analysis

been

the reproduction

of fixed

or difficult
to

into

the

1600c
400c

and luxuries,
the

of

the

prob-

an analysis

of

of

circulation

fact

in

whose explication

and reproduction

(the

put

of

as a whole

essities.

means of

necessities;

abstruse

necessarily

go-

Articles

to:

department
IIb

group

produces

as follows:

capitals

of

at

which

of
the

and 160 in

consumption
I to

their

course,

Marx

surplus

Therefore

replace

in

Ha

constant

group
Ilb

if

we add up the

consume

capital,

not
it

out-

60 in

total

have
amounts

will

each

and two. -fifths

consume

will

will

the

they

they

that

necessities

Ha

does

So,

story;

in

that

wages with

consumption-qua-nec-

assumes

to

value
of

their

a different

are

means

needed

a moment).

500 means of

these

their

exchange
in

within

department.

that

any of

go into

we will

workers

subsistence

wages outside

those

produced

means of

obtain

means of

same way as the

the

their

their

obtain

will

They must

capitalists

luxuries;

luxuries.

IIa

and luxuries,

necessities

Thus

in

group--in

itself.

of

department

produces

cannot

The capitalists,

and 40 in

sub-divide

their

IIb

of
IIb

three-fifths

essities

is

II

and we can thus

receive

cover

luxuries.

especially

we referred

workers

least

consume both

not

department

of

respective

to exchange

within

must

is

with

commodities

that

within

mechanics
Ha

Ha

the

workers

subsistence

began

of

their

that

have

the

Ha

Marx

+ 400v + 400s
+ 100v + 100s

II

and do not

Similarly,

with

Group

divides

Marx

of department

ties

with

goods;

directly

to

out

and luxury

consumption

devote

we had started

classes

evident

of

if

two

quite

II

essence

The product

two groups.

Ha.
IIb.
is

the

that

follow.

contain

luxuries.

It

As a result

elaboration

problem

to

of necessity
II

scheme we employed

capital.

The actual

ing

the

capital.

necessities

prior

in

so than

more

obscured

of

the

presupposes

fixed

of

have

lem would

complex--far

240 in
necessi-

output
to

nec-

of

be exchanged
to

800,

or

-143-

the

IIa(v+s).

of

sum

is

items?

It

talists

IIa

goods,

group

500 from

IIb

200 all

is

Ila

no artifact

of

figures.

the

individual

that

the

percentages
in

necessities
this

would

by the

between

Ha

production

of

all.

As for

over

from

its

capiluxury

total

out-

demand for

and the

in

those

is

of

the

out

lux-

IIb,

or

simple

circuit

1600c
400c

The most

important

can only

spend

at

have

in

Ilb,

of

a simple

between

fairly
the

reflect

500,

and lux-

of

II's

we know that

a
the

Therefore
and lux-

necessities
two

output

Given

amount.

sub-departments.
of

accordingly.

reproduction

None

versa.

reason.

magnitude

relative

is

the

of

of

Once we assume

that

cover

consumption

division

equals

tastes

necessities

for

case

assumed

varied

or vice

the

weights

the

such

overall

II,

least

exchange

scheme to

two groups

Ha.
IIb.

of

have

we could

involved.

is

our

relative
in

or

and the

consumption

Marx,

initial

in

and luxuries

consumption

This

as Marx notes,

necessities

group

that

department

must

of

than

gross

which

the

conditions

down our

average

capitalists'

observes

and IIb;
each

fixed.

necessities

The actual

IIa
in

the

IIv,

We could,

proportionalities

in

determine

will

in

the

between

of

Any change,

ists

800 in

40 from

plus

between

less

say,

capitalists

size

ing

is,

Ha
change

particular

the

do not

and IIb

the division

in

capitalists

division

a given

our

proportion

capitalists

that

alter

240 from

capital;

capitalists

consumer

plus

left

constant

necessary

groups,
or

these

160 from

consumed by the

uries

both

IIb,

200 of
its

a different

have assumed

uries

in

these

told.

This

of

demand for

capitalists

have

will

the

workers

has restored

it

equals

uries

the

and 60 from

after

put

What is

a and b would
3
Break-

straightforward.
of

consumption

the

capital-

we have:

+ 400v + [240a + 160b]s

60a + 40b]s
+ 100v +[

their

feature

of

this

scheme

wages in

IIa.

Hence

is
the

this:

The workers

capitalists

of

IIb

of

IIb

can

-144-

their

realize

only

variable

capitalists

in

departments

I and II

capital
In

sa.

from

case

present

the

cash

so-earned

from

when the

capitalists

IIa,

and the

from

IIb.

Thus

equal

the

value

that

is

in

luxuries,

draws

I's

our

initial

know that

the

overall

constant
that
at

capital

be exchanged

will
least
Is

within
tion

1000,

in

to

between

Ha

and the

essity,

then,

400 in

luxuries.

is

IIa

100

purchase
This

satisfy

100 of

60 in

the

of

circuit

necessities
60 in

purchase

reproduction

here

to

be spent

on luxuries

the

portion

of

necessity

capital.

purchase

is

IIb's

luxuries
that

the

must
surplus

that

as does

go for

the

In

other

But

in

turn

that

is

and luxuries

already

given

patterns

capitalists

in

Any other

division

by their
of

I must

II's

I's

of

part

So we then

that

fraction

IIa(c)

also

fund

fixed--for

organic

must

the

means that

violate

all

equal

division
produc-

compositions

necessities
the

of

By nec-

own capitalists,
600 in

of
the

while

consumption

words,

consume

would

Is.

necessities,

luxuries.

Iv.

equal

must

We

accordingly.

= 1000,
Ha

and

necessities

value

will

equal

both

sk; splus

of

capital

must
for

Iv

The cap-

complication.

consume

their
that

fund

consumption

the

will

divide

necessities

and IIb

capital

cover

to

The

of

part

an additional

likewise

constant

of

plus

to

example

IIb

is

IIa

turn

ver-

on necessities.

consumption

IIb

and vice

The last

simple

IIb

attention

department

in

in

that

in

and so we must

know from

for

value

be spent

to

in

in

variable

capitalists

luxuries.

condition

capital

variable

IIb's

variable

difficulty.

capitalists

capitalists

surplus

Marx then
italists

latter's

the

IIa's

of

portion

the

allows

160 in

from

the

its

100 articles

and purchase

represent

which

demand for

completed

also

IIb,

transactions

total

their

wages

little

presents

confronts

realize

capital,

the

of

value
that

problem

constant

exchange

their

surplus

I can only

II's

against

the

to

as a whole:

the

the

against

identical

take

With

items
of

pair

is

the

IIa.

luxury

taken
value

IIb

is

This

and surplus

in

workers

IIa.

capital

conditions

and

-145-

reproduction

of simple
of

group

however,

different

we've

those

produce

must

group,

Ib,
in

IIa(c),

against
three-fifths

of

Ia will

purchase

we also

know that

means of

320 in
Ib.

constant

IIb

Ib(v)

will

equal

Ib will

Ha

from

the

this

economy,

to

200,

luxuries.

(which

in

IIa,

from

in return.

Ha

IIa
will

Ia

have

its

Ib(s)

will

can satisfy
120 in
Ib,

their
in

and sell
then

means of

who will,

60% of

have

IIa

IIa.

a like

In addition

value

all

of

Thus

from

That

it

necessities

of

obtains
in

capitalists

buy

its

IIa,

necessities.

other

quantity

that

since

The workers

These

therefore

other

come from

400,

consumption

to

the

clearly
to

800
a total

capital.

demand for

as do the

Ib will

If

obtain

equal

production.

surplus

recovered

it

must

means of

their

exchange

necessities,

200 as well.

equal

200 in

purchase

from

up constant

used

for

have purchased

they
fund

an exchange

relevant

la(s).
for

cap-

and lux-

the

are

Where does

latter

the

now has realized

latter

Well,

restore

and

480)

already

IIa(c).

Yet

production

consumption
will

designate

necessities

and so will

equals

so the

1600

The capitalists

consumption

800,

equal

replacement?

in

devote

will

its

short

capitalists

1600 means of

of

and the

down into

consumption

produce

from

department
still

their

and

necessity

we may also

both

means

production

consume

workers

to

which

the

themselves

many means of

immediately

that

as only
leaves

requires

in

use

IIb.

800 Ia(s)

capital

of

for

Ib must necessarily
what

group,

articles

production

Ia(v)

800 + 480 = 1280 of

for

production

capital.

produce

400 means of

then

consumption

of

which

IIa;

must

the

Those

one

In reality

matter.

for

break

this

the

least

at

constant

production

Ia

the

their

end of
I:

for

means of

will

and so we must

impossible

realize

production

former

the

provide

If

the

1600 in

lb

to

department

means of

Ia and

subdivisions.

in

for

provide
must

italists
uries,

in

We know that

as Ia,

II

by no means the

suitable

which

luxuries.

is

is

department

branches

of production

of

in

capitalists

This,

make it

and actually

and 40%

120 means of

means of
constant

production
capital;

-146the

conversely,

from

in necessities

This

800s

from

Marx did

Ha

This,

for

back to

Ha

is
use

on our
3200c
1600c

Ia.
Ha.

+ [480a
+ 400s

+ 800v
+ 400v

of necessities

(a)

will

purchase

exchange

IIb

could

production.

production

dilemma?

the

particular

can purchase

money,

their

200 of

in

means of
IIa's

1600c.

the

that

and IIb,

the

and lb(s)

Let

suitus go

scheme would

of

has already

wages

its

only

in

Ha.

subsistence
This

dealing

to

leaves

Ha

with

quantity

these

ignored

as this

we are

the
in

capitalists
We have

problem

form

to

refer

value.

surplus

Ila

proceed?

Ia(s)
(b)

between

can exchange

advances

in

their

with

affect

buy

means of

that

a reproduction

what

for

Ib

produce

means of

this

exchanges

+ 320b]s

and luxuries

and does not

they

of
with

means of

to-

patched

assumptions.

a and b listed

Ib

for

produce

do we solve

and reconstruct

The subscripts

internal

not

not

that

800c + 200v + [120a + 80b]s

400c + 100v + 100s

Ib.
Hb.

groups

does

How, then,

beginning

the

like

IIb.

la

however,

We assumed
Ia

lux-

capital.

directly

Hb.
with

400 in

succession

Ib does

with

purchase

Engels

that

whole

do.

Ib will

problem,

consumption

items

in

40%

purchase

constant

notes

This

cannot

luxury

of

its

his

will

as well.

purchase

one crucial
in

Ditto

can use.

impossible.
in

is

la

Those

restore

means of
it

in

Ha

1000

have

and Ib will

from

I together

Capital.

This

exchange

too,

in

not

of

exchanges

that

direct

effect

least

Ia

necessities

luxuries.

There

II

production.

production

in

IIb

Marx.
at

in

The capitalists

can therefore

tackle,

assumes that
means of

IIb.

make Volume

to

gether

Karl

not

in

have purchased

together

will

capitalists

The capitalists
IIb

IIb;

Thus far

look

and Ib

and the

= 320 from

200 = 80.

40% of
uries

leaves

only

their

able

IIa,

la

480 and 120 respectively

bought

of

in

workers

workers.
This
200 in

the

been

solved,
How

with.

The latter
they

do,

money and

and

-147IIa(c).

1400 unsold

in

the capitalists
from

sumption

IIa.

from

tion
it

200 in

also

received

ated

in

cuit

by advancing

wound up in
hold

it

of

were to

when it

made any purchases

do.

to

proceed

la
Ha,

480 in

of

tion
It

articles

means that

that

it

must

sells

buy necessities

from
its

of

600 to

capitalists.

modities

it

from

capitalists

of

means of

production

entire

Ia.
I it

constant

required
capital

means of

production

la
its

to

which
to

capitalists

have not

own money,

sell

This

they

into

its

fallen

have

its

got

has managed

luxuries.

or

280 of

and purchases

Ila.

is

to

of

its

constant

further
a

120 in

of

1000 to

money it

replace

component

needs

the

the

entire

workers

consump-

capital.
money to
commodity
of

by selling

received

further

money it

1600 means of

the

replace

advances

these

now has the

cir-

Ia

I and

these

com-

that

much in

means of

600 in

necessities

to

1000 and purchased

By selling

entire

consumption.

money that

by selling

spent

origin-

which

means of

now has disposed

IIa

Ia has

money

1480 out
it

Of the

has already

production

its

if

of

1600 IIa(c)

equivalent
its

200 in

from

IIa.

the

produc-

This

necessities

120 when lb

remaining

means

money that

this

the

off

as wages.

workers

value--but

a further

dispose

but

started

bought

has sold

IIa

advance,

surplus

the

adds

not

800 in

the

to

As a result

either

of

commod-

means of

addition

value.

necessity

This

the

its

takes

hands by way of

its

200 of

IIa

surplus

200 of

of

did

workers

to

in

remember,

money to

the

sold

its

realize

an equivalent
yet

where

unsold

con-

replacement

1000 in
back

gets

But

it

we will

200 in

IIa,

Ia

as Ia(v).

money which

The latter,

Ib.

money and buys

transaction

advanced

acquire

money

means of

money and 600 in

to

the

capital.

1000 in

this

(with

800 in

them as wages)

1000 in

constant

the

had originally

to

Ia purchase

made any purchases

its

With

Ia.

in

workers

now has

yet

now takes

the

advanced

IIa

for

of production
IIa

Ia

has not

It

ities.

Next

to

Ila(c).
and converted

the

buy

the

rest

Thus

IIa

has realized

into

means of

it

of

the

pro-

-148likewise

la
320 in
it

from

its

Ha

to

200 of

these

back

320 have
Ia,

to

In

of production).
come Ia's

of

has,

It

s).
Ia

the

takes

entire
its

out

it

need

320 in

money which

had to

la's

point

consume,

and in

the

advance

process

280 in

the

money,

total

have

before.

This
has

it
Honey
;

means of

makes

sold

all

advanced
consumption
between

proportion
these

means of
it

to

returned

which

have

(its

IIb.

acquiring

means

by lb

not

It

correct

of

its

of

+ 480 neces-

did

the

and

480 in

production

view.

back

to

Ha

its

rest

800v

from

of

all

the

bought

it

luxuries

what

pleases.

to

money advanced

1600 means of

320 in

as it

the

sold

acquired

In

it

has purchased

has

and necessities.
it

120 in

of

Ignoring

note.

lb(v)

bought

has received

and it
to

Ha

excess
advanced

do with

to

(when

Ha

the

has

and

natura

came back to it
it
Yet/ma. de 480 in pur-

Once from

to

la

from

complete

some

money.

hand

(when

la

320 and buys

capital;

consumption

Ia

is

and which

twice:

has

it

commodity-product;

luxuries

320 in

in

actually

of

280 in

only

while

as we noted,

circuit

capitalists

workers,

another

So,

IIa,

this

as variable
its

IIa.

way via

from
1280
=

sities

is

to

addition

it

point

from

back

and then

necessities)

money

last

its

800s

This
what

circulated

and again

its

of

over

has

that,

of

all

sales

has advanced

Ia

on top

and,

v+

through

advanced

of

advance.

not

Ia

chases

then

did

This

away,

straight

it

disposed

own purchases.

800v that

the

now

which

money

received

make

has

with-

any complications.
This

leaves

IIb

with

At the

same time

IIb

has

has to

get

means of

rid

to

production,

by taking

the

of production
hand when it
through

of

its

320 in
from

sold

the

means of

IIb(c).

It

however,

and it

money it

just

received

in

turn

had these

made 320 in

Ib

purchases
from

IIa

does

(200
without

did

it

money which

320 of
its

replace

Ib.

capitalists)

320 in

has

this

now,

from

la

at

its

buy these
in

least

and buying

means of

through

to

part,
means

production

workers

any compensating

it

that

consumption

still

either.

advance

not

on

and 120
sales.

And

-149these

by selling

means of

leaves

IIb

means of

production

means of

production

still

can only

buy

from

is

The circuit
it,

advanced

proper

simple

merely
ment

from

assuming

the

system

necessitated
ment I,

of means of
At the

complex
the

of

all

80 luxuries

direct

exchange,
for

separate

with

to

one of

purchase.

those

have

the

and of

it

which

the

reproduction

values

80

and Ib with

money needed

as

products

are

much

organic

who

been

sat-

restoration

of

in

commodity-products

a whole

the

their

the

the

once

where

sales-without-purchases.

could
the

The

the

the

of

and the

the

take

realization
place

this

under

via

of

labor

between

Ha

economy--

entire

production
for

of

in

capitalists

breakdown

of

By
depart-

each

division

and IIb

purchases-without-sales
And all

the

the

division

social

in

capital
of

conditions

appeared.

depart-

of

types

specific

proportions.

quantitative

correct

only

first

it

material

Ha

the

others,

luxuries,

feature

in

needs

this

departments

commodity-product

value

important

and in

same time,

of

determined.

division

meet

than

interdependence

material

the

all

surplus
and

was

least

the

composition
the

of

of

narrower

necessities

production,

between

we assume

the

division

had to

circuit,

Ib;

and a shortage

for

simple

of

the

of

unsold

money has returned

of

once

a particular

which

exchange

upon

between

II

the

exchanges

that,

a given

and IIb--seemingly

ment's

this

a given

department
for

of

reproduction

and

back

gets

form.

department

each

last

from

needs

the

all

elements

material
We see

for

terms

still

through

The conditions

individual

the

long

at

and a need

advancing

now complete,

in

it

which

unsold
is
This/done

Hb.

etc.

both

isfied,

of

items

two sub-departments

these

all

80 luxury

with

80 in

of

lb

had advanced.

the money it
This

production,

was fixed,

labor
of

each

sub-depart-

an extraordinarily
had to
simple

exactly

reproduction!

match

-150NOTES TO APPENDIX TO PART I

1.

VKA 17,

2.

Zakat

3.

Capital,

pp.

44-45.

Kapitalizma,
II,

pp.

p.

81;

413-14.

p.

83,

fn

1.

-151PART II

SIMPLE AND EXPANDED REPRODUCTION UNDER CONCRETE CAPITALISM

CHAPTER
SIMPLE

In Part

I we showed how,

for

a scheme

simple

= IIc

I(v+s)

that
and

Ilc

any

imbalance

for

Beyond
means

production,

and
as

problem
ital

an

the

of

(or

Needless
schemes from

fact.

conditions

the

could

take

place

the

entire

the

not

expanded

economy

and antagonistic
primitive

essential

socialist

of

theory

was the

the

where

simple

re-

We saw

this
in-

of
as

introduced

the

constant

capthe

within

result

question

was how

industry

coexist-

when he came to
an economy,
production.

two regulators,
of

production:

accumulation.

modern

Marx's

to modify

need

and economic-political

such

of

of

the

him

us that,

systems

industrial-

reproduction

well

at

petty-commodity

his

under

components

as an historical

of

of

and

arrived

society,

represent

famine

that

into

alone.

For

surprise

I(v+s)

sector

system.

as

was

between

other

values,

sectors,

reproduction

premises

Soviet

material

both

angle.

of

sector.

accidental--and

even

assumption
exchange

of

agriculture

to

for

Preobrazhensky

say,

should

the

concrete

law of

a goods

sector

a different

of

from

different

how

the
of

capitalist)

to

showed

simplifying
of

strictly
the

one

reproduction

balance

any
be

construct

than

more

simple

drawing

by

only

mean

departments

duce a new sector

the

the

of

would

we could

of

a whole;

sector

reproduction

peasant
So it

lowed

as

an historically-given

analyze

ed with

economy

would

analysis

both

within

industrial

to

it

Marx,

economy

condition

production

what

an

a basic

we also

we removed

merely

in

be overcome

of

from

starting

particular

this

ly-produced

volved

the

could

exchange.

as soon

that

each

within

REPRODUCTION

reproduction

we derived

From this

a conflict

the

analyze

he would
This

folsaid

which
between

The law of

intro-

that

two

value

and

-152in

Already

and

economy
it

in

his

Ekonomicheskie

the

understand

study

to

of

in

that

stated

be necessary

would

used

to

in

he

NEP)

Under

Crises

1923,

Pri

to

order

sources

and expanded

disproportions

and

to

the

Soviet

the

analyze

crises

department

(Economic

NEP'e

properly

its

of

a third

add

simple

Krizisi

two

had

Marx

reproduction.

for us to carry
In general,
out the necessary
the
analysis
of all
of the exchange of goods in our commodity-socialist
conditions
system of economy, we will
need not two schemes, with which Marx
but three.
It is necessary
to introduce
operated,
a third
scheme,
the exchange of goods and the numerical
characterize
which will
indusregularities
and proportions
of this
exchange between state
'
try and the peasant
economy.
Only

then

economy in. the

the

with

it

would

be possible

NEP period.

practical

theoretical

other

analysis

of

up his

that

just

abstract

in

we drew out

on page

K, those
letter

all

previously

a mixed

of

the

p represents

and k represents

those

would

what

The problem

both

introduction

the

means of

production

did,

Preobrazhensky

was a
Thus an

out.

pointed

necessitate

and
is

and this

argued

as soon

the
which

values
P obtains

this

that

his

the

which
from

capitalist

are

sector

K obtains
K.

scheme of
system

production
of

part

was an essential

as we compare

The departments
pre-capitalist

as historically

categories

economic

capitalist-petty

128.

do.

not

an additional

analysis.

We see this

method.

reproduction

small

realized

produced
is

treated

and we have

specific,

labelled

seemingly

as he had already

itself
This

Preobrazhensky

his

entire

was concerned

most

would

reproduction

which

pick

soon

economy,

consumption.

where we will

of

as always,

even the

department

third

expanded

of a new sector,

have

must

system

of

means of

of

the

and regulate

endeavors.

scheme, " or

whole

understand

Preobrazhensky,

significance

Preobrazhensky
"third

to

labelled
from

with

simple
the

sector
P.
P via

one
are

The
exchange;

-153KI.
KII.

4000c[3750k

+ 250p]

+ 1000v

1500c[l000k

+ 500p]

Total

production

Pl.

750c[

500

Total

of

articles

is

inapplicable;

of

simple

to

can be used

only

in

take

into

by the

indirectly

What sort
Preobrazhensky's

of

128.

I(v+s)

within

of

and IIc

circumstances),

constant
total

capital

consumption

makes the
as "one

is

Although

we will

a single

is

equilibrium
equivalent
fund

of

sector

of
the

the

value

to

possible
combined

combined

the

identical

(except
if

but

I.

case

to

on a scale
labor

of

this

power ... "3

type?

for
saw
we

own

between
accidental

most
the

we exchange
departments

this

also

of

the

under

expand-

product

surplus

what

consumpof

in

equilibrium

departments

of
of

of

cannot

an economy

not

fund

question

from

have

circumstance,

themselves

law of

peasant

mechanics

production

producers

emerge

conclusion

because

expand

by the

regulated

first

to

independent

regularities

scheme on page

it

power,

only

This

and the

production)

the

organic

two divisions

the

only

categories

in

the

of

simply

and the

no counterpart

We have

labor

can go not

production

only

s,

analysis

pet-

consume dir-

producers

sense.

of

is

capital

value,

much more complicated,

of petty

is

variable

as surplus
have

up the

The structure

related

Conversely,

of

divide

the

up means of

value

consumption

of

makes our

account.
that

= 2250

500k]

= 6000

not

v and s.

a conditional

much easier.
(used

[1000p+

As a result,
such

either

capital

into

income the petty

product.

Preobrazhensky,

does

production

c/v,

to

consumption

category

the

assume any constant

that

fund

capital,

ed reproduction

expand

+ 4000

the

economy,

reproduction

constant
tion

or

= 1000p
+1000s]

8250

only

annual

political

composition

according

is

= 2250

fund

produces

that

such

their

of Marxian

it

375s

[KI(v+s)

+ 1500 consumption

petty-commodity

there

from

economy,

of

k]

P=

consumption

production

ectly

in

= 6000

8250

+ 1000k]

production

The sector

K=
250

p+

2000c[1000p

PII.

ty

in

375v

+ 1000s

II
This

total

against

the

much we have

-154-

this

first

into

P must

not

surprising,

at

their

that

the

value

equal

the

value

of

in

ments

K),

fund

in

is

assumption

there

must

(If

this

achieve

of production

own.

show the
components

reproduction.

buys

500).
(= 1000),

It

It

are

sold

these

sells

KI,

With

petty-

this

a dispro-

is

place

two

133--but

on page

that

imbalance

and

by drawing

this
the

capitalist

the

surplus

PII,

to

of

have

petty
In

orbit.
means of

has a deficit

which

conversely,

hour

depart-

we will

a critical

PII,

to

both

the

taking

into

of

c to

of

between

rectifies
it

exchange

values

really
with

is

This

ratios

c/v

example

Preobrazhensky,

amount;

however,
has
fact,

in

of

promeans

has a 500 surplus

which

fund

whose consumption

in

constant
that
more
buys
well

given

us a far

the

the

exchange

of

First

capital.
part

from
the

of
PH
rest

enough.

its

(v+s)

(1000)
of

its

But

this

of
which

than

not

is

its

needed

what

one we later
fixed

the

all,

does

deficit
means of

comes to

only

to

composed

and circulating

KI does

KII

hap-

really

scheme than

more complex

to

close

is

this

shows us that

very

proportionality
of

is

our

same 500.

is,

It

found

from

500,

this

in

and bringing

taken

look,

PI merely

actually

KII

simple

Preobrazhensky

pens.

only

itself

consumption,

A closer

with

has

worth

by these

short

our

sector

of

of means of

satisfied

arose

the

labor.

of

from

more primitive

place--one

capitalist

exchange
not

one that

exchange

KI,

of

takes

K.

goods

P against

of

of

what

scheme we have

duction

(compare

Socially,

into

production
the

the

economy

exchange

is

all

obviously

of

departments

be an equal

that

from

pass

P into

the

spite

one hour

worth

below).

capitalist

cannot

both

go from

that

derives

that

commodities

assumes

peasant

condition

to

similar

more on this
the

those

no non-equivalent
labor

portion

the

of

production

sectors.

in

and that,

consumption

the

of

Preobrazhensky

since

structure

Preobrazhensky

relationship

one is

values,

technical
the

A corollary

shown.

already

not

not
with

exchange

KII

(which

consumption
1000,

It

purchase.

and KII

from
has

is

-155-

to replace

constant

has the

unsold

surplus

belonged

So far
(half

it

consumption

the

means of

talist
total

PI for

in

tion

the

KIIc

combined

is

need means of

a fairly

dictated

In

return

two

thirds

of

peasant
in

consumption

to

consumption

structure

that

produce

means of

which

are

of

of

capi-

producis
for

for

exchange
called

of

the

of

This

PII.

the

for.

production
They

consumption:

industrial-capitalist

are

means

means of

is

technical

sectors,

means of

Thus we see that

sector.

the

production

has acquired

which

by the

both

fund.

What remains

is 1000 in

PI,

exchangeable

agriculture.

of

must

them to

the

it

circuit

from

production

agricultural-peasant

PI.

complicated

two departments

the

each of

fund

PI's

its

the

KII

means of
of

which

like

sells

all
all

peasant

KII

consumption

of

means of

the

plus
PIIc,

plus

complexity

peasant

within

KI(v+s)

combined

This

1000 in

peasant

be exchanged

to

transaction

a simple

from

It

has obtained

needs,

looked

exchangeable

has disposed

it

production

product

social

its

is

needed.

its

replenish

KI and S00 to

to

is

more

somewhere.

of
It

KII

one third

origin,

all

PII).

to

requires.

consumption--1000

all

in

KI has sold

Now it
it

glance

something

1500 to

of

1500.

of

first

consumption

need

and half

KII

to

amount
at

Clearly

means of

so good.

the

while

KI.

to

has an overall

which

of

commodities,

500 in

this

sell

to

capital

and the
different

a qualitatively

type.
But

this

exchanges

of

ments

in

place

their

(produced
other
change

means that
commodities

both

sectors

constant
in

articles
between

KI)
of

that

means of

production

part

of

will

which

will

produce

and part

of

agricultural

KI has

terials,

and PI has

to

for

which

consist

replace
to

works

out

250 of

restore

of

right

all

its

250 of

constant
its

all

the

of

The departeach have

of

consist

We thus

production.
This

for

accounting
reproduction.

capital,

KI and PI.

finished
simple

needed

scheme because
etc.,

we haven't

in

internal

and
ex-

Preobrazhensky's

capital

constant

re-

machines

raw materials
have

to

in

capital

raw mawhich

-156had previously

existed
The cycle

of

would

be a very

simple

around

so that

250 PIc.

for

It
figures

in

produced
would

nothing

absolutely

in

reproduction

between

combined

constant

through

all

about

the

He never

route

this

a mixed

exchange

that.

is

What

ensue.

to

refers

later

"Economic

Equilibrium

in

in any of

the

first

to this

keep

should

mind

that

the

question

his

results,

to

lay

system

economy.?
the

sectors

is

and show

be overcome

how if

by adjusting

and leaves

does

in

actual

the

article

At no time
refer

back

point.

We

he ever
at

at

have

would

famine

goods

matter

show the

this

the

of

I and the

the

which

though

simple

this

because

it

6
concerned

analysis

for

the

departments

of

scheme shows,

reproduction

of

the
out

a later

more

of

valid

for

for

any economy
What

commodity-socialist.

arises
within

scheme
he wants

analysis

interdependence

a disproportion
production

are
or

this

proportionality

of

capitalist

study

concrete

has presented

conditions

conditions

of

cautions
alter

would

exchange

stage

reglarities

and even

sophisticated

conditions

and these
be it

of

composition

the

showing

with

reproduction,

Preobrazhensky

exchange,

movement

question

Even so,

economy,

reveal

this

up at

laid

general

USSR" (VKA 22).

be taken

He first
of

leave

material

groundwork

the

equilibrium

crisis
says

scheme of

the
the

of

first

even

of

type

Preobrazhensky

brackets,

about

System

this

value

and must

in

production

this

II,

figures

means of

that

fund

travels,

the

the

out

departments

was obviously

of

based on market
he now does

traces

Preobrazhensky's

and saw what

is

consumption

the

on.

a strictly

to construct.
mixed

He presents

argument

what

later

in

only

this.

We will

inherent

a given

more amazing

scheme.
in

133)

the

on economic

Preobrazhensky

of

of

articles

be important

will

famine

circulation

his

to

was a goods

combined

which

been central

juggle

(p.

250 KIc

of

now complete.

us to

above

of

an exchange

for

thing

economy,

capital

is

reproduction

there

We did

KI.

We have

as machines.

the

in

the

sector

between
system
that

the
it

can

had been

two

-157is

This

unaffected.

disproportion

we saw that

There

by drawing

alleviated

the

this

fact

adjust

to

zhensky

takes

sectors

will

To this

end he presents

tion

of means of

starting

to

sector

such

3500c
2000c

+ 875v
+ 500v

PI.
PII.

1000c
1750c

+ 2000 consumption
+ 3500 consumption

4000c
1500c

PI.
PII.

750c + 1500 consumption

2000c + 4000 consumption

+ 1000v
+ 375v

When we compare
has not

changed;

altered

is

the

two

has total
division

fund
fund

of

production

is

now in

means of

consumption

it

was before.

what
in

In the

present

within

K of

this
its

rearranges

more means of

means

produc-

be the

response

the

capitalist

of

of

situation

example

250;

there

production

in

deficit

= 2250
= 6000

Total
total

labor

of

labor.

means of

now a shortfall
however,

production

social

the

within

What has

production

the

inadequate

previously

way that

will

consumption
of

could

equilibrium

have
than

means of

has risen,

is

Everything

sector

petty-commodity
It

sec-

capitalist

capitalist

and the

be if

= 8250

each sector.

within

The only

= 8250

production

now shows a surplus.

PI,

= 8250

production

production

we see that

would

is

Total

self-sufficient

and fewer

production

Total

fund
fund

division

social

= 8250

Scheme

social

formerly

be maintained

and the

production

= 3000
= 5250

production

the

of

Total

schemes

that

now such

reverse

also

the

+ 1000s
+ 375s

the

nor

that

of

of

Scheme

= 6000
= 2250

KI.
KII.

production

What will

system as a whole.

production

fallen,

a rearrangement

+ 875s = 5250
+ 500s = 3000

Old

of means of

has

sector

be

show how both

to

the

the

which

could

Now Preobra-

order

within

in

has grown.

KI.
KII.

is

in

any new disproportion

capitalist

sector

exchange.

point,

a new scheme,

conclusion.

capitalist

into

sector

New

tor

the

first

our

capital?

social

sector's

peasant

consumption

the petty-commodity

from

within

as his

the

within

of production

different

somewhat

while

to
it

produce
used

production
PIIC

has

to.

-158has fallen,
way the

this

peasant

means of

essary

falls,

equilibrium

if

corresponding

sector

production

of

reproduction

and takes

of

from

peasant

are

is

sector

are

in

to

in

Preobrazhensky

for

capwithin
be

an important

relation-

study

of

did

not

process

draw
of
of

economy brings

it

exists
its

of

constant
with

We have

commodity
additional

this

that

sector

that

crop
of

of
between

circulation
of

up

the

seen as well,

composition

sources

then.

inter-relation

conclusions

appropriate

takes

analysis

by a redistribution

material

capital-

and commodity-

exchange

sector.

the

our

of

disproportions

certain

the

in

production

more properly

capitalism

can be overcome

petty-commodity

with

concrete

upon

those

goes

each de-

Preobrazhensky

two constituents

capitalism

more complex
of

deal

It

in

means of
with

simple

account.

production

extent.

and we will

to

only

one hand,

on the

into

physical

limited

a very

KI-PI,

of

raises

therefore,

applies

interchangeable

not

because

types

the

sector

is,

of values

sector
be maintained

can only

of

composition
that

capitalist

There

course,

exchange

such

that

own analysis,
new,

nec-

arrangement

bourgeois

petty

movement
of

Second,

sector
the

This,

and depends

equilibrium.

though

different

our

production,

capitalist

the

us with

First,

labor

this

to

VKA 22,

social

his

with

would

as a whole
the

technical

the

economy.

to maintain
the

In

reproduction

the

of

same amount.

the

sector

indispensible

petty

only

now he has provided

with

KIIc.

market

any other

established

of

between

except

up further

socialist

in

each

production,

Right

production

simple

system

by the

other.

that

partment

this

the

relation

saying

has

department

on the

ist

If

one department

within

and KII-PII,

the

against

as an adequate

prevailed,

within

production

inverse

without

capitalist

consumption.

Preobrazhensky

If

clear,

provides

exchange

ship.

level

for

and serves

means of

From this

its

economy

production

impossible.

the

PI available

production,

italist-produced
the petty

2S0 in

making

al-

from
exchange,
two

disproportion-

-159and crises

ality

along

with

it.

NOTES TO CHAPTER 3
Krizisi

Pri

NEP'e

(Economic

1.

Ekonomicheskie
1923),
p. 16.

2.

in the text;
There is an error
VKA 17, p. 40.
KIc reads 4000c
[3725k + 250p] instead
We have changed
of 4000c[3750k
+ 250p].
designation
for the petty-commodity
Preobrazhensky's
from
sector
D (for
the Russian dokapitalistichesky)
its English
to P (for
translation,
pre-capitalist).

3.

into
This as we know, became translated
fact
during
an historical
its
the goods famine,
than market
rather
crops
when the peasantry,
simply
on terms it considered
unfavorable,
went over to increased
in natura
consumption
of its
own product,
along with handicraft
for those products
of goods which could substitute
production
of
supply.
urban industry
which were in short

4.

It

Crises

Under

NEP,

Moscow,

figures,
is
Preobrazhensky's
that
this
an
artifact
of
might seem
fund esince he has set KI(v+s)
equal to PIIc and PI consumption
the system as a whole will
then baland obviously
qual to KIIc,
however,
is itself
This latter
an artiance.
set of equalities,
in the
fact of the symmetry he has established
between production
in K equals
in P; output
in KI
Total
that
two sectors.
output
in KII.
in PI equals
in PH and that
We could
that
equals that
set up a different
scheme where the volume of production
easily
differs
between K and P and where the above accidental
relations
do not occur:
KI.
KII.

6000c
1500c

+ 1500v
+ 375v

PI.
PII.

2000c
5500c

fund = 6000
+ 4000 consumption
fund = 16,500
+ 11,000 consumption
Total
production

+ 1500s
+ 375s

= 9000
= 2250

Total

production

= 11,250

= 22,500

for the system as a whole,

Here we have simple
reproduction
does not exist
in any one sector
own.
on its
equilibrium

while

S.

When we speak of non-equivalent

with the
exchange we are dealing
Obviously
labor.
problem of what constitutes
socially-necessary
But
is the same in either
sector.
one hour spent on production
in the capitalist
this
sector,
one hour will
yield
more products
it will
As such, exchange relations
see more use values
produced.
be dominated
by those of the more efficient
econowill
capitalist
This also raises
theoretical
the more complicated
question
my.
of how we evaluate
exchange between two sectors
which are not govto the
laws.
Petty
erned by the same economic
conforms
production
law of value only to a limited
degree.
Yet its
exchange with the
be subject
to the law of value,
capitalist
and evaleconomy will
It is precisely
here that
uated on those terms.
non-equivalence
becomes an historical
fact
the differing
which reflects
productivities
of labor
of the two economies.

6.

See Part IV, below,

of
where we take up Preobrazhensky's
analysis
in the Soviet
Even here Preobrathe circulation
process
economy.

-160himself
to a merely verbal
zhensky confined
argument and failed
to
work out all
of the implications
of his analysis,
which the
of the reproduction
application
schemes--even
one as basic as that
have shown.
on page 1S3--would
7.

Throughout
VKA 17, p. 45.
the VKA 17 article
Preobrazhensky
refers
if we introduced
that
to the complications
would arise
the quesi. e., exchange between the same departtion
of internal
exchange,
but cautions
sectors,
that this
ments of different
can really
only
be taken up at a more advanced stage of analysis.

8.

Preobrazhensky
VKA 17, p. 46.
notes that historically
capitalism
did not develop
in this
Both KI and KII advanced simultanway.
in different
(due to their
though
differing
eously,
proportions
compositions
organic
of capital,
as we deal with in the next chapAs he shows in the final
ter).
section
of this
article,
petty
in assisting
plays
production
an instrumental
role
to
capitalism
disproportion
between KI and KII.
overcome this

9.

The text
is a direct,
that
there
actually
states
proportional
between KI-PI,
tionship
on the one hand, and KII-PII,
on the
Both the argument
on the preceding
pages and the reproduction
however,
that
the relationship
schemes make it perfectly
clear,
is one of inverse
proportionality.

relaother.

We should also note that

in the production
when we speak of a fall
departments
of one of the capitalist
and the role of petty
production
imbalance,
in overcoming
(as
drop can be either
this
this
absolute
in a crisis)
(as when one department
or relative
accumulates
at
In either
a faster
pace than the other).
case, the petty-commodity
flexin affording
sector
plays
a vital
part
much-needed
capitalism
ibility
in its
to adjust
to such momentary disturbances.
ability

-1614

CHAPTER
EXPANDED

Preobrazhensky

Before
italism

and study

ditions

of

cretize

Marx's

expanded

II

But Volume

pure

a two

study

in

from

of moving
studying

pure

what

composition

and
on from

is

accumulation.

stressed,

was terribly

of

capitalism

pure

take

account
and the

that

coexists

reproduction

under

under

consisted
in

both

capitalism,

con-

of

tendencies

move straight

production,

economy

a capitalist

drawback

when there

must

when circulation

under

our extrapolations

concrete

each department's

of

in

connections

to

cap-

amend and con-

only

the

out

regularities
there

system

the

we could

already

detail;

capitalism

occurs

work

concrete

further

If

an economy

the

out

great

had to

economy,

such

of

production

not

as we have

Capital,

reproduction

did

it

CAPITALISM

analysis

capitalism.

sector

Marx had laid

incomplete.
simple

of

to

of

the

he first

was that
of

PURE

extend

reproduction

reproduction

simple

could

UNDER

capitalist-commodity

analysis

inter-relations

ial

the

investigation

Marx's

of

REPRODUCTION

terms
the

of

mater-

inter-

mutual

pre-capitalist

with

formations.
When it
however,
of

came to

Marx had done

Some of

tions.

to be able

did,
about

to
in

to

the
the

the

go further
concrete

second

organic

in

cies

would

Part

III

part

emerge

of

VKA 17,

the

of

ratio,

c/v,

as society

III

of

USSR.

capital.
would
from
Capital,

augments

beginnings
assump-

simplifying

most
away if

Preobrazhensky
that

an analysis

capitalism,

barest

the

could

Marx's

In his
remain

where

and improves

then
premise

scheme Marx

original

constant

even his

basic

in

both

own detailed
he showed what
its

was

actually

What Preobrazhensky

was question

abstracting

Volume

the

be stripped

the

even pure

undertake

under

and establish

composition

of

it

economy of

he was therefore

sion

more than

now had to

these

had assumed that

ments;

little

and had examined

an analysis,

apply

expanded

departdiscustenden-

technological

-162take

base and machines

previously

process

when he studied
that

assumption

in department

II

than

duction

in

fact,

will,

the production

tion

the

if

and II,
equal

necessary

in

tion

left
rates

exchange

to

organic
if

in

their

ditions

will

produce

disproportion

is

I(v+s/x)

and allow

it

grow

to

I.

department

keep pace

accumulation

to

then

of

brings

with

the

about.

the

natural

cap-

if

we assume
a lower

department
the

both

I,

same perthese

of

means of

to

transfer

assure

assump-

pure

given
in

or

either

will

valid

that

accumulate

con-

consumption
The

IIc.

replace

be overcome

so as to

basis

surplus

under

than

destined

rates.

or,

II

II

production

This

only

to
with

on the

the

capital;

over-production

each year

departments

their

of

II

that

He discovers
of

axis

[I(v+s/x)]

reproduction

expanded

value,

is

assump-

department

different

at

and can only

department

II

II's

means of

capital

partment

to

surplus

systematic,

social

(as

this

of

than

demon-

I the

accumulate

pro-

capital

fund

divisions

I and department

a relative

of

and to

composition
in

fact

the

out

of

that

in

consumption

means of

however,

not,

accumulation

two points.

capital

annual

and a deficiency

total

of

department

of

department

organic

composition

centage

the

these

around
the

of

analysis

composition

department

bring

would

of

within

I's

was lower

capital

and development

and consumption

analysis)

of

He did

and equal

accumulation

centers

we allow

not

exploitation

a concrete

an increase

organic

crisis

of

Marx made the

The production

independently

grow

Preobrazhensky's
italism

I.

a higher

of

labor

the

of

reproduction,

composition

consumption.

he did

of

between

value

organic

and adjusted

Consequently,

IIc.

of

means of

reproduction,

expanded

expanded

Marx made accumulation

presents.

satisfy

have

portions

labor.

department

the possibilities

all

strate

of

the

in

larger

by living

performed

In addition,
realistic

increasingly

over

by rearranging
capital

de-

growth

absolute
rise

from

in

IIc

that

of

-163The Tentative

I.

Just

led

that

with

Marx's

I.
II.

4000c
1500c

Compare this

the total

II.

in

consumed.

This

pand the

functioning

system

500s to
the

one,

as before.

position
it

had been four

This

fact

expanding
with

the

its
the

have

to
has

one,

immediate

expanded

constant

new means of

same as in

value,

department

or

capital
production.

500.

This

if

must

and employing
The organic

the

of

capto
com-

organic

reproduction

I.
look

we only

Department

reproduction.

from

four

of

simple

under

significance

500v and

economy which

a c/v

1500

still

difference

has a much lower

whereas

to

equal

compositions

I has

plus

assume

we also

from

the

organic

however,

(1000v

presumed

risen

of

structure

one,

is

II

ex-

department.

1500

IIc

sets

an important

Department

II,

the

little

surplus

s,

already

two to

only

way Marx described

one half

its

shows differeing

Department

Marx

to

goes

Since

value).

I is

was totally

that

to

equal

in

The technical

capital,

only

production

two departments.

the

of

is

This

it

in

capital

is

department

2000 I(v+s)

of

equilibrium,

total

s in

of

reproduction,

S00 out

So is

same.

The difference

9000.

one half

surplus

us be-

beginning

the

the

exactly

equals

and therefore

v,

scheme describes

within

in

because

scheme.

ital

I's

let

= 9000

production

I is

simple

expanded

Well,

at

therefore,

of

off

750v and 750s.

earlier

present

part

for

reproduction

and variable

I is,

Reproduction

reproduction:

Total

still

means that

of

starts

its

3000,

to

equal

them?

expanded

with

constant

Finally,

as well.

modify

simple

which

turn

consumed

the

to

department

before,

fund

The consumption

schemes

We now assume that

whereas

accumulated,

500s/x--the

in

product,

social

Marx's

= 6000
= 3000

scheme for

the

Production

in department

that

scheme for

Expanded

of

of

Preobrazhensky

+ 1000v + 1000s
+ 750v + 750s

with

Analysis

inadequacies

initial

I.

of Chapter

Marx's

of

the

were

what

reproduction
gin

Nature

I accumulates
between

be distributed

new labor

at

power

composition

of

to

work

capital

the

-164four

in I is
to

increase

I's

capital

to

At

v.

The total

+ 1100v

for

also

means that

must

1400.

or

departments

the

4400c
1600c

I.
II.

rate

interesting

I accumulated

one half

would

of

+ 1100v
+ 800v

What is

150/750,

accumulate

II's
the

at

this

is

not

up between

to

capacity

at

it

If

the

proper

100% in

both

that,

in
his

department

while
II

could

means of

with

in

over-production

After

the

next

year

only
IIc
pro-

department
to

see that
it

dividing

accumulation,
department

proportions,

as-

= 9800

it

in

both

departments):

more,

provide

artifact.

800v plus

production
retains

II

which

equals

department

happen

would

100 IIc

had accumulated

been a relative
what

total

production

value,

an arithmetical
c and v in

Total

surplus

one fifth.

look

equals

consump-

of

Marx

that

its

of

then

year,

scheme is

have

We need only

(remembering

= 6600
= 3200

an increase

fund

first

the

end of

means of

makes the

which

this

There

II.

But

1600 I(v+s/x).

to

equal

demand for

about

I's

would

IIv,

exploitation

have outstripped

duction.

I's

consumption

+ 1100s
+ 800s

or

department

year

= 6000
I is

by 100.

add 50 to

as follows

stands
that

sumption

So,

fund

satisfy

own IIc

150.

to

c and 100

augment

new production

department

of

to

its

we must

equal

accumulates

II

increase

it

go to

this:

product

department

tion

the

of

+ 500 consumption

exchangeable

In order

600s/x,

like

500 must

the

beginning

the

look

will
4400c

I.

So 400 of

one:

I's

capital

be:

will

I.

4840c

Department
variable
year's
I.
II.

II

+ 1210v
will

capital,
production,
4840c
1760c

have
making
both

+ 1210v
+ 880v

to

add 160 to

departments

its

together

+ 1210s = 7260
+ 880s = 3520

I accumulates

pective

values.

If

Total

we work

out

the

appear

will

production
II

process

After

240.

to

equal

50% and department

and 80 to

capital

constant

there

accumulation

Here department
surplus

fund

+ 550 consumption

as follows:
= 10,780

30% of
of

the

their

accumulation

res-

its

-165a number

over

in department
Its

II

is

II

But this

leaves

grows

less--of

II

basic

the

monstrate

of

breaks

the problem
Capital

remains

duction

to

reproduction

regularities

of

problem,

the

and the

abruptly

We are

plus

capital-

accumulate

much

in

this

department
for

last

range

of

Marx

be-

to

to de-

order

Volume

of

II

invaluable

Marx's

I.

discussion

Marx's

chapter

with

in

way,

process.

= IIc.

the

was essential

left

a whole

that

result

in

and de-

axis,

I(v+s/x)

relation

more--and

it

department

to

our

counterparts

notes,

incomplete.

the

the

their

expanded

off

I is

unrealistic

than

value

case--accumulation

as compared

as department

considerably

as Preobrazhensky

analysis

value

to maintain

consume

be the

to

always

surplus

highly

the

surplus

Nevertheless,
his

its

enough

us with

their

this

be so as long

only

department

of

we find

30% of

must

partment

gin

years,

This

50%.

ists

of

of
intro-

he left

that

questions

of

unexplored.
discussion

This
amples

the point

where

stated

the

happens

if

in both

which

of

organic

I and II

we assume

when their

takes

two

1)What

in

de-

one or both
of

rates

accumulation
of

compositions

organic

As we

questions:

rises
equal

us up to

begins.

properly

capital

and ex-

observations

VKA 17,

of

he raises
of

if

from

argument

chapter,

happens

drawn
parts

main

composition

and 2)what

departments

this

is

first

the

Preobrazhensky's

start

the

partments?;

Marx,

throughout

scattered

at

of

capital

differ?
Here we come up against
clearly

talking

about

two distinct

opment,

each of

which

seem to

tendencies
examine
result

it
them

is
each

in

we can discern

composition
compositions

of
in

that

crucial
their
what

difficulties.

certain

tendencies

lead

the

we abstract
That

turn.
is

to

the

product

capital

and what

the

two departments

results
are

within

from

each

when we look
the
the

unequal.

rise
fact

as distinct

Yet

from

them out

of

devel-

capitalist

same result.

way,

is

Preobrazhensky

in

at
the

and

other
the

final

organic
the

organic

Preobrazhenskyt

un-

that

-166fortunately,
driving

did

at,

they

at

fact,

well,

in

the

remainder

up the

when we take

to department

their

I,

combined

lustration,

II.

II

that

than

look

the

Marx's

ment II
dictated

organic

department
so long

I,

the

demands

by accumulation

within

to

satisfy

is

this

condition,
compositions

of

certainly

we must

cumulates

according

value.

no longer

capital

In reality

any differently

than

of

true.

the

this

is

there
those

in

to do,
these

each of

Then,

own examples.
from

capital

department

so as to

behind

organic
the

show

own ilthe

arithmetic.

fact

this
adjust

last

source

assumption

that

nothing

I and to

its

of
to

themselves

the

of

instability.

two organic
And
I ac-

department

of

own production
II

make capitalists

consume

more

this

as we alter

in

only

sigdepart-

within

were

As soon

The deviation

logic

in department

had no immediate

which
I.

we point-

section

accumulation

equilibrium,

of

compositions

was lower

capital

a critical

internal

demonstrate

Preobrazhensky's

unequal

department

becomes

now drop
to

of

to

as we continued

to

them together

scheme in

that

and said

with

regularity

of

composition

show that

Capital

of

question

how he

we will

our

of

with

algebraic

separ-

unambiguous

deal

to

of

do this

Compositions

with

both

two quite

What we propose

transfer

at

We will

Organic

the

in

nificance

plus

we will

When we presented

capital.

is

he was

chosen

them with

the

of

the

it

question.

chapter

question

showing

Let us begin

in

illustrating

effect.

while

Unequal

ed out

this

individually,

is

these

systematically

points
of

Nor

what

own mind

examples--although

and quite

theoretical

tendencies

II

arithmetic

his

between

development.

his

in

clear

distinguish

capitalist

the particular
then,

absolutely

sharply

and used
in

are,

not

of

ate aspects
arrived

being

while

sur-

behave

and accumulate

less.
If

we work

of production

out

years

expanded

reproduction

we see this

over

disproportionality

the

course
quite

of

a couple

plainly.

We

-167-

already

from

year

fifty

I.
II.
After

per

+ 1100v
+ 875v

first

year's

4400c
1750c

before

375,

by 250,

II
tion

year's

year,

And in

the

accumulate
I.
II.
IIc
tion

is

II,

II

also
the

arrangement

of

assuming

a rate

= 6000
= 3000
(also

its

taken

year

50% of

their

it

as much.
in

Already

deficit

the

surplus

than

in

cannot

the

In terms
Part

I,

convert
foreign

carry

out

this

M, there

is

the

into

first
simply

still
If

100.

to

equal

departments

both

= 6600
fund = 3500

capital

some 281 in

commodity

we are

actually

and convert
the

circuit

means of

that
capital
that

somehow assuming

or,

which

no way that
into

end

industrial

metamorphosis,

and see M converted

the

The dispropor-

of

has

II

(from

means of produc-

by 281.7.

money capital;

trade

is,

that

Even at

worse.

fund

circuits

department

but

we have:

value

consumption

of

ex-

out and no further

is

become even

will

into

capital.

has been carried

place,

150;

to

we have

year

equals

money capital

new productive

375 goes

first

it

50v),

plus

accumulation,

it

out,

This

this

After

carried

accumulated

150 (100c

only

twice

= 10,100

production

production.
is

of

second

now greater

stage

first

the

department

the

have

Total

accumulated

production

via

C' into
next

part

perhaps

could

= 6600
= 3500

by 125.

150 in

has yet

has grown.

it

fund
fund

4840c + 1210v + 550 consumption

fund
2041.7c + 1020.8v
+ 437.5 consumption

we examined
that

II

means of

when all

accumulation

+ 1100s
+ 875s

production

representing

of the

If

value,

we will

or more than

of

convert

cannot

surplus

production

and IIv

deficit

the

its

of

in

accumulation

section.

+ 500 consumption
+ 37S consumption

+ 1100v
+ 875v

now accumulates

a massive

preceding

department

Whereas before

pand IIc

the

I's

= 100%):

exploitation
I.
II.

department

cent

4400c
1750c
this

for

be:

will

capital

social

in

example

our

accumulates

of

figures

know the

abstracting),

this

portion

can carry

production,

which

of

on to

the

are

el-

-168ements of

additional

when I's

productive
of

little

better:

The deficit

still

icit

year

of

the

If

we were

find

would

of

is

cess,

for

of

ital

the

than

the
in

scheme,
point

to

the
the

is

For

devotes

year

end of

far

worn

the

year,

value,

situation

= 11,343.3

production

100 def-

the

it

the

only

takes

value

department
than

II

of

trans-

larger

the

surplus

value

ratio

of
If

v,

we look

department
year

is

the

of

cap-

out

of

which

and less

to

increase

Thus

c/v.

labor

of

composition

increase

social

at

the
our

I from

present

our

1210

equals

new surplus

starting

210.
1000
=
-

750
270.8.
=
-

adds

what

the

pro-

merely

organic

to

form

the

the

Now, what

constant).

in

to

being
Thus

its

production

be (productivity

production

1020.8

the

capital

the

Surplus

can add new value

quantum

added

second

in

is
of

appropriates.

employed

s will

be greater.

will

product

replacement.

a higher

equals

greater

off

class

it

this

only

has a lower

of

Why is

can accumulate

remaining

every

we

what

constant

greater

time.

years,

ask,

that

out

of

first

labor

future

more

with

new surplus

As a result
that

the

one department

next

II

surplus

a number

we should

element

exploitation

it

In department

IIc

only

the

department

the

the

end of

more than

each

surplus

living

up towards

other?

accumulates

Total

for

capitalist

the

of

capital,

where

= 7260
= 4083.3

Any society

the

of

situation

capital,

increase

an answer

which

value

and intensity

new variable

considerably

would

capitalism,

the

of

a greater

accumulation

Under

is

this

v component

value

find

to

a function

and saved

c than

out

disparity

the

value,

product--the
ferred

carry

accumulation?

surplus

value

it

to

product.

surplus

the

to

rise

1210s
+
+ 1020.8s
or

Even at

before.

Well,

of

nature

of

226.7,

equals

that

happening?

accumulation

1210v
+
+ 1020.8v

1.4840c
2041.7c
II.

P.

capital,

has given

capital

the

as a result
is

productive

in

each new year

department

I adds

an increment
to

I(v+s/x).

to
This

-169is because
is

the

in

so much larger

before

many years
not

and set

IIc/v

higher

the

disparity

At first

a larger

because
IIc.

however,

the

mass of

(relatively)

we would

ically,

this

have

leading

to

department

II's

back,

equal

the

and loss

fund,

d(v+s/x).

First,
the

the
share

Secondly,
of

the

How is

new v is
of
with

share

to

s going
a given
going

to

of

v,

of

And in

II.

department

with

department
and perpet-

capital

would

present

our
just

II,

back

cut

must

Econom-

in

the

re-

production,
be transfer-

must

(v+s/x),

of

the

plus
to

the

rate

that

that

the

accumulation--the
the

greater
out
which

of

s,
goes

addition
is

it
to

end of
will

consumption

fund

consumption

of

the

(v+s/x)',

is,
to

addition

the

the

to

At

algebraically.

simply

accumulation

as opposed

after

keep pace

on,

what

I.

accumulation,
rate

later

this

with

case,

reproduction

or capital

addition

a function

take

could

not

of

new level

this

augment

consumption.

II

very

increase,

down radically,

this

department
values,

result.

to

production

see

in

relationship,

comparison

could

department

[(v+s/x)],

level

In

declining

department

the

in

Either

is

it

too

department

actually

slow

which

means of

as we shall
I to

this

of

production

Either

to

would

decrease

of

over-accumulation

year,

previous

out

meaning
or,

would

take

not

opposite

was now going

II

itself.

sustain

the

I(v+s/x).

raise

the

comes,

proceeds

s in

v plus

obtain

and I(v+s/x)

would

mean that

We can demonstrate
a new production

IIc

of

deficit

II

total

would

we reversed

within

a sharp

crisis

the

value

to

holds.

conclusion

it

In fact,

accumulation

department

the

I.

we would

new surplus

accumulation

as a whole

If

IIc

this

which

Accumulation

than

Ic/v,

II's

of

to

of

consumption.

and stagnation,

where

from

of

be cut

to

in

accumulation

have

have to move from

red

than

out
I.

between

needed

crisis

also

II

share

would

what society

verse

in

I had available

while

example,

than

than

larger

department

I would

value,

was greater

part

Soon,

so that

ual

IIc
fund

its

just

II

department

in

faster

far

I,

new surplus

formed?
greater
to

v.

a function

increase

c--

-170it

in other

words,

Now, let

us adopt

is

directly
following

the

to

proportional

v/(c+v).

consumption

=1-x

notation:

rate of accumulation
out of s
v/(c+v)
the proportion
of s going to individual

x=
y=
z=

fraction

the

Then dv = xy(s/v)v
= xyv,
So,

(v

'=

(v+s/x)

+ (xyv

+ zv)

(v

rate

+ (dv

+ zv)

= (v

(the

s/v

where

zv)

of

exploitation)

=1

+ zdv)
+ xyzv)
+

xy(v

zv)

(1
(v
+
+ zv)
=
xy)

(1
+ xy) (v + s/x),
=
In other
of

the

the

words,
rate

of

tive

capital.

tion

of

capital,

(v+s/x).

since

show this
ignated

by c',

Cl

dc

c must

the

for

equation
If

as well.

directly

share

c,

of

only

with

which

grow

at

the
is

accumulation
the

v in
to

related
tells

new level

of

the

it

total

composi-

growth

of

be compared?

must

as v and as

same rate
a linear
constant

size

produc-

organic
the

about

of

c in

the

total

capital

of

i. e.,

= c/(c+v)

= xqs

that

= 1,

s/v

dc = xqv.

Therefore,

the

the

one.
capital

We can
is

then

share

and assuming

But v is

to

related

dc

=c+

the

q=

of

growth

we know that

easily

the

however,

This,
the

is

inversely

therefore

c/v.

Logically

If

is

What about

(v+s/x),

and to

accumulation
It

(v+s/x)

of

growth

where s/v =1

a constant
c'

fraction

=c+

dc

=c+

xqv

=c+

xq(v/c"c)

=c+

(xq"v/c)c

c,

(v/c)

"c

=1-y,

then

des-

-171= (1 + xq. v/c)c

if

Now,

is

c/v

throughout

contsant

a production

year,

= x[c/(c+v)]"v/c

xq"v/c

= x[v/(c+v)]
= xy
Thus,

c'

(1

+ xq"v/c)c

_ (1

is,

That
the
to

c,

+ xy)c

and in

of accumulation
of capital,

c/v.

ity

IIc

clearly

between

the

cisely

result

is

will

determine

III.

A Rise

the
in

the

select

organic
a numerical

VKA 17--c/v
I.
II.
In this

is
4000c
1500c

the

down department

pattern

II

of

accumulation.

the

the

in

to

equalwill

divergence
is

of

accumulation

the

algebraic

value

the

of

variable
of

of

have

I and II

we will

confusion,

any possible
in

is

capital

Preobrazhensky's

scheme in

two departments.

is
bring

Total

lower,
its

pre-

exposition:

coefficients

departments

that

+ 1000s = 6000
+ 375s = 2250

order

Ilc

absolute

composition

organic

same in

then

of

Capital

of

fact

composition

pattern

the

v,

rate

This

and so the

To avoid

production

Ic/v,

the

year.

from

s;

Composition

the

the

out

to

where--unlike

scheme total

than

to

a position

each passing

with

example

+ 1000v
+ 375v

from

grow

rise

compositions.

organic

and so the

is

from

to

I(v+s/x),

equations

in

proportion

less

clear

a rise

matter

is

direct
the

must--at

troublesome

especially

out

equally

gives

Organic

of

a different

unequal

is

entire

in

by working

those

v that

The question
quite

obviously

in

result

starting

IIc/v

we obtain

factor
It

if,

than

The reason

The dynamic
capital,

faster

two will

this

proportion

and I(v+s/x),

by year.

year

inverse

and as they

expected

and c grow

Therefore,

grow

the

grow--as

consider

(v+s/x)

Both

interpret.

between

all

We do not

same rate.

quite

(v+s/x)

and

v,

production

since
technical

we have

= 8250
had to

structure

scale

into

line

-172-

with

that

department

of

both

to one in

I.

composition
I were to

alter,

tion

in

ing,

for

IIc

II

of

at

75.

By the
IIc

of

means of

composition

of

capital

relative

to

needs to

replace

what

it

a smaller

hand,

sees

its

while

we started

in

grows,

thus

ment I,

IIc/v,

now inadequate

the

means of

from

a position

worlds.

Department

modities

for

a larger

one--it

in

must

more means of

production

would

50.

And if

would

come from

its

at

exchange

fewer

a larger
back.

once

in

ends

the

II,

fund,

other

com-

exchangeable
In

the

in

its

we have

product

Departfund

exchange

means of

of

case

II's

production.

of

and

so that

same,

component

fund--it

on the

I(v+s/x).

all;

organic

capital

the

return--while

quantity

we took

has fallen.

of

means of

for

still

both

exchange

variable

equality

need

in

A rise

so.

at

giv-

1425
125.
=
-

equilibrium,

changed

departments

realize

there
to

capital

increased

and needs

Ic/v),

stay

I has a smaller

exchange

I(v+s/x)

equal

than

produc-

if

production

constant

means of

then,

fund.

greater

fund

= 325,

advanced

of

= 950,

rise,

consumption

has not

II's

both

of

demand for

II's

to meet

changes

out

hand,

other

of

conditions

Is)

to

I means that

quantity

worn

is

department

also

were

1550

equal

see why this

capitalists'

the

IIc

shortage

would

demand for

When c/v

ceive

was in

out

for

department

in

heightening

on the

four

organic

consumption
of

IIc/v

in

the
in

c/v

I's

be a deficit
if

in

(and hence

and Iv

any change

we now see IIc

modity-products,

is

capital

a rise
If

and Its

production

a smaller

to realize

a rise

before

to

of

same--department

same token,

The deficit

difficult

= 4050

would

together

it

effects

= 1550 and IIv

(i. e.,

same time:

Nor is

Ic

the

staying

our two illustrations

at the

of

straightforward.

say,

1500

be a deficit

fairly

1425 and there

example,

remained

is

so that,

equal

only

on the

argument

capital

then--department
would

composition

departments.

Preobrazhensky's
of

The organic

is

production.

the

of

worst

offers

fewer

department
commodities

both
comII

and re-

has

-173It

be asked,

might

way in which

we've

compositions

were

of

conditions

shouldn't

equilibrium

To answer

this

for

the

by one per

transfer

of

of

in

in
in

chose

in

under

we need

department

each department

have

also

rises

the

it

the

each departlater

composition

move from

4: 1 to

4.04: 1.
This
between

new

c and

department

has

tery

this,

about

If

x equals

c,

and

if

For

the

share

must

of

the
give

department

for

new division
For

153.3

between

and y=

c and newly

added

arrangement

of

the

the

newly

= 4.04:

1,

is

there

simultaneous
s that

accumulated

in

capital

So that

lv.
simple

with

that

we obtain

x=

c and v is

goes
then

we will

have

and y=

91.3.

raise

to
if

and

v,

no mys-

equations.

goes

to

each

augment

the

these

final

equations:

408.7

408.4/91.3

actually

is,

That

= 4.48:

the

1.

II:

1500 +x=4.04(375
187.5
x+y=
x=

this

total

divided

+ y)

x and y,

department

solve

to

the

is

value

I:

4000 +x=4.04(1000
500
x+y=
Solving

that

a way
4.04c

of

portion
c/v

surplus

accumulated

such

relation

we can

the

newly
in

new v

y equals

arrangement

the

that

means

+ y)

34.2,
v of

is

which
4.48:

social

1.

capital

also

a division

Translating
for

the

these
year's

between

newly

added

figures

into

a new

production

il-

department

to

organic

will

to

only

his

II

de-

both

now introducing

capital

static

organic

be maintained

but

A growth

in

we

question,

from

capital

below).

with

providing

years,

the

terms)

Preobrazhensky

example

means that

cent

of

composition

(the

deal

we will

which

organic

cent

the

of

a couple

So,

the

of
if

all,

percentage

accumulation,

ment by one per

lustration

(in

an artifact
After

problem.

uniformly

accumulation?

that

condition

isn't

this

be equal.

accumulation

work out

I,

rise

would

of

rates

equal

the

approached
to

if

still

they

partments,

however,

we get:

-1744408.7c
1653.3c

I.
II.

= 1636.95;

I(v+s/x)

If

we allow

c/v

year,

i. e.,

following

department

For

4408.7
x+y=

= 1653.3.

= 6591.3
= 2471.7
There

is

Total

= 9063

production

a deficit

of means of

pro-

4.08:

1653.3
x+y=

departments

by another

the

disproportion

worsens.

1,

1% in

the

+ y)

[new

c/new

v=4.52]

II:

+x=4.08(409.2
204.6

+ y)

[new c/new

37.1

y=

both

I:

department

167.5;

in

rise

to

98.8

y=

For

to

+x=4.08(1091.3
545.6

446.9;

x=

IIc

+ 1091.3s
+ 409.2s

= 16.35.

duction

x=

+ 1091.3v
+ 409.2v

This

v=4.51].

for

gives

the

year's

production:
I.
II.

4855.6c
1820.8c

I(v+s/x)

= 1785.15;

division

the

the

affect

in

observe
chines

are

lation

introduced

to

the

what we have

value

of

in

our

first

component

stands

to

the

the ratio

of

4: 1,

the new machinery,

ital

turns

two,

the

such that

out

isn't

the

new labor

this

value

to

have

equals

the

of

It

scrapped.
the

risen
requires
about

average

c/v

by 1%, i. e.,
new labor
4.51:

1.

to

continues
of
to

the

power

Again,

the

to

operate

1.

to

up in

re-

is

1 (which

set

work

it

in

alongside
cap-

productive

entire

4.04:

to

power
used

needed

power

ma-

whose replacement

machinery,

labor

we would

what

labor

4.48:

equals

power

to

capital

constant

The old

year).

of

an amount

the

of

so as to

new labor-saving

suppose

require

by adjusting

value,

near

35.65.

to

is,

that

comes fairly

example,

value

so that

new machinery
dc/dv

For

increased

surplus

new accumulated

and these

that

has
here,

problem

capital,

economy.

them such

operate

the

productive

a real

the

out

worked

between

total

The deficit

= 1820.8.

IIc

The way we have

only

+ 1190.1s
+ 446.3s

+ 1190.1v
+ 446.3v

Similarly
it

into

new machinery

in

year

motion
functions

-175the

with

along
though

technically

is not

as efficient
as the

as well
This

newest

rise

by another

more

machinery

addition

1%, to

theoretical

in department

In other

make the

look

1.4008c
II.
1503c
Accumulation
fund

of

I.
II.

4405.6c
1652.1c

I.
II.
IIc

4405.6c
1652.1c

I(v+s/x)
-

we obtained
If
tal,
letting
before
tion

for

gives

+ 992v
+ 372v

rise

between

this

argument

let

us suppose,

the

change

words,

out

of

take

it

average

c/v

took

all

productive

to

c/v

II,

to

prior
5000

of

we would

1875 in
372.

for

Then c would

where

original

and

place

capital

= 4.04.

c/v

In department
the

in

the

so that

have

productive

The total

by apportioning

place

to

according
of

come
to

capi-

social

pro-

final

the

the

accumulation
organic

already-established

1.

4.04:

+ 1090.4v
+ 408.9v

+ 496s/x
+ 186s/x
product

+ 1090.4v
+ 408.9v

+ 1090.4s
+ 408.9s

which

is

very

at

by altering

the

by one per

cent,

even

was carried

the

took
out

with

on the

Thus,
basis

the

of
entire

even
of

method.

the

composition

we disrupted
place.

of

deficit

year

first

our

arrangement

organic

first

the

to

close

accumulation

more closely

any accumulation
subsequently

beginning.

the

section,

1503 and v equal

by calculating

we see that
it

capital

= 16.5,

we look

very

added),

+ 992s
+ 372s

then

the

recently

this:

each department
of

previous

adjustment,

one,

causes

that

992.

to

like

would

composition

which

of

see c equal

would

the

we rearranged

same sort

would

duct

I,

4008 and v to

to around

tal

in

the

year

al-

1.

no contradiction

purposes,

to accumulation.

from

(which,

in

stock

has been most

production

4.08:

before

year

initial

functioning

around
is

the

the
that

machinery

means of

formulation

our algebraic

than

still

of

in

was added

advanced

as the

To show why there

purely

that

machinery

by

capital,
equilibrium

though

equal

capi-

productive

accumula-

organic

composi-

-176capital

tions

of

there

was still

and equal

In fact,
a new c/v

the

we could

I.
II.
Here the

established,

I grew

by an amount

+ 1002v
+ 372v

organic

composition

I has grown

composition

organic

is

The problem
We cannot
thereby

simply

More to
portion
we would
magical

would

II.

So,

again

tion

to

to

a transfer

would

Transfer

As we have
was only

sustain

of

of
have

Capital

already

one way out

of

in

total
Then,

as the

department.

not

fall

grow

out

from

the

sky.

nowhere

of

and

take

indicated,
this

every

conclusion

that

as a whole

can allow

place

Between

grow

the

from

capital

could

between

this

each

II

and every

year
itself

only

under
to

this

dispropor-

this

rearrangement
department

to

access

exchange

with

for

equilibrium,

I had perpetual

proportional

capital

to

any initial

it

dispro-

the

c/v

rising

of

spite

so that

confronted

The mechanism

transfer

The

I will

the

1503.

or

either

does

a constantly

capital,

social

ism must be the

IV.

equal

so long

in

change

department

that

we are

be erased.

that

IIc,

equal

capital

year,

instant

the

of

not

with

every

of

and department

rearrangement

to

1, but

4.04:

still

to

department

since

necessary

once

did

that

presume

warehouse

by an amount

productive

I(v+s/x)

allow

once

proportionality.
point,

to

the

of

proportionality,

retain

additional

re-arise

have

is

I(v+s/x)

capital

presume

the

to

capital

allow

that

re-establish

size

absolute

if,

be:

of

would

of

disproportion

this

necessary

initial

the

two departments.

the

of

from

arose

+ 1002s
+ 372s

to

accumulation

obviously,

and exploitation,

This

overcome
the

would

4048.1c
1503c

in

capital

have

only

Such an arrangement

IIc.

accumulation

funds

exchange

had been
in

capital

of

disproportion.

a sizable

between

inequality

rates

capital-

department

I,

year.

Departments

Preobrazhensky

impasse:

concluded

The systematic

that

redistribution

there
of

-177-

total

the

social

would

The historical

ly

this

Historically

argument

ital

(Part

to
is

III),

fall.

capital
of

cause

the

in the

tion

v in

schemes

once

internal

product

in

the

of

its

increasing

a fall

faster
of
in

I is
line

the

rate

mass of

of

is

Cap-

rate

of

profit

noted,
to

a fall
is

latter

the

produced

value

amount

of

variable

that

the

turn

happens

than

the

of

a rising

this
in

go to
from

relative
be-

growth

that

of

department

a condition

Ia

absolute

department

If

II.

I,

portion

so that

of

absolute

growth

of

addition
the

in
the

production

the

to
In

production

social
for

reproduc-

be insufficient

will

to

the

c/v.

augment
II

in

expressed

department

the

in

This
and faster

production

with

fact

of

capital.

capital

the

the

drops.

absolutely,

than

in

III

profit,

surplus

pro-

increase.

Marx

however,

spite

must

the

of

can on-

society's

Volume

for

rise

capital.

will

capital,

increase

within
II

of

Historically,
the

in

Marx

tendency

in

condition

means of

of

of

the

own resources

department

growth

that

same process

accumulation

I proceeds

relative

I(v+s/x)

of

be a transfer

will

growth

of

production

capital

we add the

demand for

the

the

off

means of

production--in

composition

of

of

an absolute

grows

social

weight

because

productive

the

relative

composition

with

offset

of

to

capital

a tendency

such

IIc.

of

growth

of

the

with

as well.

of

composition

I(v+s/x)

that

ensure

absolute

I(v+s/x);

with

organic

capital

organic

line

along

shown that

There

This

the

We have

cover

plus

the

total

I accumulates

to

in

employed

production

he dealt

as a result

share

mean that

would

the

redistribution

where

is

It

organic

outgrow

in

profit

observed.

increases

to

quite

lead,

in the mass of
not

the

in

A rise

logically

will

IIc

would

devoted

This

to

for

which

keep up with

the

by a constant

be mitigated

duction

for

tendency

a tendency

creates

each period,

so as to

absolutely

grow

in

product

sur-

I as well.
relative

as a whole.
growth

of

IIc.

Consequently,
by estabto try to solve the problem
we are obliged
for each new year,
lishing,
that will
new proportions
ensure equiFor if we take one department
librium.
the
as a base and adjust

-178department
the other
to it,
within
capital
as the
that
point,
could not give us any sort of long-term
pivotal
soluTherefore,
to the problem.
tion
at the end of each year we have
from
first
the surplus
to
set
aside
of all
value of both departto maintain
the level
ments an amount necessary
of production
of
the preceding
the remaining
year,
and then to distribute
surplus
taken together,
on the basis
value of both departments,
of the
Under the actual
of the new year.
of proportionality
conditions
(excluding,
development
of capitalist
conditions
of course,
periods of crisis)
like
for
things
Allowing
this.
proceed
something
bankruptcies
in both departments,
"normal"
the general
outlines
distribution
period's
of capital
of the preceding
are retained;
in the preceding
accumulated
year through
new capital
new stock
is then distributed
hit or miss,
and bond issues
spontaneously,
into
branches
by taking
between the various
the interplay
account
in each given case between departments
I and II;
of market forces
itself
this
new distribution
of capital
and finally
readjusts
2
the market mechanism that regulates
the whole system.
through
distribution

of

To illustrate

this

process,

+ 1000v
+ 750v

+ 1000s
+ 750s

Preobrazhensky

takes

following

the

example:
4000c
1500c

I.
II.

know how accumulation

We already
would

4400c

+ 1100v

says

Preobrazhensky,

lation

fund

of

demand of
must

It

increase

equilibrium
up with

I.
II.

retained
which

his

II

must

take,

IIc,

in

order

to

add to

I for

means of

its

own variable

consumed

this

We

I.

Marx's

return

to

by the

capitalists

is

of

To do this,

however,

This

in

225

leaves

and assume

department

departments

Preobrazhensky

maintained.

accumu-

increased

solution

both

its

the

match

by S0.

capital

between

out

II.
together,

does

this

all,

he

result:
+ 1129.6v
+ 807.3v

condition
at

of
1%.

fund
fund

+ 500 consumption
+ 375 consumption

this

resolved

he set

consumption.

be redistributed
as a whole

4558.4c
1629.6c

Preobrazhensky

tal,

225 is

whole

department

We cannot

therefore,

must,

winds

to

distributed.

this

so the

375,100

department

also

yet

that

department

fund

+ 500 consumption

First,

not

in

proceed

get:
I.

it

would

in

a growth
This

following

the

in

meant

the
that

First

way:

organic
first

= 6188
= 2811.93
of

composition
off,

Ic

would

of

capi-

grow

by

and

-1794440,

40, to

IIc

by 15,

to

1615.

would

also

have

to

and
Iv

15, however,
means of

for

be a market

II's

in

the mere rise

in

undistributed

utes

in

then

rise

This

is

Iv.

that

it

carefully
rules

the productive

itself

We know that

there

very

for

60,

to

process

of

between

the

to

neatly

Iv

line

with

then

causes

to

grow
Thus

enough
225 of

the

distribIIc

this,
Ic

to

sum that

must
swell

passed
here

exposition

redistribution

obeys

individual

elements

of

however,

Mathematically,

by simultaneous

solution

would

4500.4

130 of

The actual

departments.

both

of

Yet

Preobrazhensky's

of

proportionality

capital

latter

by

the

Preobrazhensky

In

order.

shows how this

of

IIv.

And the

The value

lends

the problem

The rest

augment

in

for

IIc

and there

by 1% is

capital

accounts

fund.

everything

I was 188.5

of

that

events

as must

to

tight

of

to

II

very

composition

7.3

puts

by a further

in

so that

be available,

actually

increase

accumulation

by 14.6,

amount,

commodity-product.

organic

fashion:

this

by 58.4.
from

the

increase

this

by that

grow

would

then

must

a chain

motion

II's

IIc

additional

Ic

by 15 means that

to set

for

production

To cover

equa-

tions.

know that
from

the

4: 1 to
II

partment

organic

4.04:
is

to

1,

is

composition
and that

go from

4400 +x=4.04(1100
1600 +y=2.02(800
225
x+ 2y +z=
the

condition
added to
we must
the

of

the

2: 1 to

capital

to

be distributed.

capital

in

department

organic
2.02:

I is
capital

of

composition

The appropriate

1.

We also
to

rise

in

de-

equations

be:

would

x is

225 total

to

and vice

y is
here
versa,

Therefore

satisfy.

z is

Ic;

be satisfied

IIc,

appearance

Finally,

to

addition

+ y)
+ z)

of
the

the

term

addition

what
is

is
that

2y,
to

also

instead
IIv.

is

whatever
is

this

since
y is

added

the

what

is

of

just

Solving

But

Iv.

to

the

added

to
of

condition

added
y,

these

in

to

IIc,

the

equations

essential
Iv

is

also

exchange
and hence

last

equation.
for

the

-180we have

variables,

three

looks

arrangement

+ 1128.9v
+ 806.4v

4560.6c
1628.9c

I.
II.

The conditions

of

slight

discrepancies

due to

the
of

position

Ic is
ly

making

Iv,

to

I(v+s/x)

an initial
not

and Ic.

in

the

ratio

Iv

are

organic

com-

when adding

his

As a result
for

The

satisfied.

Preobrazhensky

of

that

figures

his

while

are

boost

maintain

= 10,060.1

production

= IIc,

scheme and that

IIc,

understated,

An arithemtical
onstrate

the

partment

II

department

place

in practice.

the

obvious

objection

be so easily
chines

are

figure

and IIc

means of
the

the
from

for

consumption,

of

this

does not

the

nor

duction

to

another

for

are

slight-

he points

argument,

is

mobility

the

one branch

vision

of

times

keep

social

capital

from readily

in

life.

out

modern
of

that
credit

production

labor.

in mind

production

that

In

under

In understanding
capital

is

from

a social

this

the

mechanism

forth
process,

relation,

util-

commodities
same is

of

yet
pro-

and interesting

detailed

calling

ma-

all
and

one line

Money capital

another,

cannot

each department;

within

capitalism

system.
to

notes,

the

and notes

Not

of

de-

would

production

kinds

shifting
a very

point

another.

Preobrazhensky

of

process

production

of

means of

different

from

capital

up this

to

both

of

Yet,

of

elements

we can dem-

that

how the

about
takes

physical

these

will

real

transfer

one department

branches

separate
stop

nothing

production

same raw materials.

true

the

Preobrazhensky
that

The fact

a proof.
of

I says

transferred
suitable

not

feasibility

algebraic
to

is

example

take

from

after

Total

high.

too

ize

this

by 1%, he did

capital

somewhat

final

as

= 6818.4
= 3241.7

where

between

that,

year

+ 1128.9s
+ 806.4s

equilibrium,

increments

subsequent

the

end of

+ 1128.9v
+ 806.4v

fact

So the

z=6.4.

+ 500s/x
+ 375s/x

the

at

production

giving

28.86;

y=

like:

4560.6c
1628.9c

I.
II.

160.6;

x=

can

for

this
flow

easily

di-

a different
we must
and that

at

all

when we

-181transfers

speak of

labor

command over
is

This
of

perhaps

the

portance
surplus

value

and not

just

the

department
terials

and labor

disposal

power.
it

that

the

capitalist.

It

is

circuits
M, is

as the

historical

The historical

im-

the

social

places
entire
for

the

labor.

money capital,

of

it

of

is

system

the

recall

by which

process

total

capitalist

this

class,
Pre-

that

reason
for

condition

of

I to

have

idle

of

hold
view

transfer
This,

the

was to

mobil-

in
of

of

is

capital
however,

stored

material

department

it

capital
in-

suddenly

to

I.

What allows

reserves

of raw ma-

We should
at

his

in

be sur-

not

own analysis

important

in

role

protracted

means of
arrived

that

production,
i. e.,

society

from

is

Preobrazhensky

the

far

far

the
easI

department

had undertaken

production--just
at.

it

to

difmore
from

Therefore,

periods.

way around,

imply

and hence

production,

II

are

which

consumption

of

from

transferred

are

means of

of

other

would

crisis.

values

composition

the

Preobrazhensky

if

up means of
for

of

in

ex-

can now be tapped

possesses

capitalist

that

physical

the

prior

"over-production"

an increasingly

play

form

reserve

which

had arrived

the

own theory

than

already

society

prior

and equipment.

and it

the

the

as reserves

it

that

is

and circulating
If

be employed

-Marx

"over-production"
tendency

act

plant

difficulty

fixed

production,

conclusion-

more perishable
to

is

both

components).

means of

expand

however,

possible,

of

now to

capital,

these

process

new workers

The only

the

we again

will

Preobrazhensky's

ative

if

consumption

by this

fixed

II.

understand

reserves

and unused,

prised

to

of

and variable

output

the

sustain

to

division

entire

constant

of means of

ier

social

credit

substantial

its

creases

point

the

effective

can speak

of
its

ficult

in

in

capital.

istence

I,

and changes

production

What makes this

of

shifts

an individual

obrazhensky

(both

about

we are

and the

modern

at

talking

to

capital

of

of

power

to means of

converted

really

capital

easier

industrial

ity

of

the

opposite
concludes

relof
that

-182this

indeed

this

is

I,

in

itself

It

to

As he himself

for

otherwise

economic

activity.

as soon as we apply
determined

the distribution

(that
tendency

natural

and a consequent

I through
hand,

the

would

due to

ment II,
see in

Part

its

III
for

we account
that

transfer

this

application

tendency

towards

however,
his

the

effect

because

conclusions.

surplus

fact

prices

of

is

prices
would

We have

of

included

accumulate
total

of
that

of

the

upon

department

on the

other

than

depart-

We will

mathematical

fact

capital,

is

the

obvious

inherent
to

important

Preobrazhensky's

a rather

the

department

and the

erase
It

ex-

As soon as

circulating

II.

of
would

capital.

capital

cannot

department

raise

of

deceptive.
fixed

production

seem to

rate

in

faster

rate

their

at

by v),

production,

itself

production

the

over-production

larger

than

in

over-production

they

its

longer

of

of

depreciation

is

terms

Prices

appearance

period
of

of

in

weight

prof-

completely

would

exchanged

relative

of

average

goods

the

I would

the

of

out

determines

s/v,

produced

place

in produc-

if

value

be towards

capital.

extended

of

Only

rate

employed

this

for

and point
the

value,

Yet

cap-

takes

that

whereby

mechanism

strictly

department

that

even the

mention

of

sheer

turnover

the

the

He also,

that

capital

flawed.

seriously

values

go beyond

surplus

via

increase

to

the

the

the

economy

need

mean that

of

rate

place

of

the

from

total

conclusion.

off

of

proportions.

a deviation.

took

is,

of

production,

capital
such

and accumulation

ploitation

II

just

produc-

by which

mechanism

prices

the

of

the

social

Preobrazhensky's

reverse
value

of

we have

of profit,

basis

of

is

only

We can even

than

rather

of

prices

on the

and this,

tion

the

not

deviation

in normal

department's

that

argument

an equilibrium

the

is

in

department

to

capital

that

is

economy maintains
mentions

it

transfer

but

take,

crises

Preobrazhensky's

instance,

that

to

deficit

the

this

admits,

capitalist

need

result.

that

appear

that

the

of

compensate

would
would

italist

form

outward

a product

order
that

tion

is the

schemes,

objection

presentation

of

to
the

-183-

level,

At another
did

to

as an appendix

problem

it
make

less

any

in

tus

this

is,

Marx's

is

regard

deviation

and the

of

fact

prices

Marx's

of

capitalist

accept

the

theory

we first

from

point

starting

if

would,

they

we have shown,

ment of

the

tem;

prices

In

of

either

tion

of both
would
course,

case

to

from

the

II

to

negate
and
of

be understood
forms

to

the

reproduction

schemes

tendencies

the

department

the
I takes

and rearrangethe

of

equilibrium

be one particular

the

a transfer

such

was essential

not

key ways by which

the

department

production

which

of

ex-

sta-

production

derived.

a reversal

as one of

would

have

it

is

this

with

of
from

only
to

necessary
conclusion.
an advanced

that

through

vehicle

syswhich

the

wealth

relative

the

through

to

of

of

labor

ample

Otherwise

complexity

of

so great

reserves
society
This,

adjust.

constantly

is

produc-

capitalist

creation

The technical
division

of

trans-

As Preobra-

another.

consumption.

and means of
elasticity

to

and the

product

surplus

one department

constantly

reproduction

expanded

each year's

happen,

production

the

was Marx's

find

we will

forces

means of

in a society

demonstrate

Its

did

value,

are

production

had shown that

rearrangement

allows

not

of

capital

production

observed

that

did

capital

productive

zhensky

prices

to

of

can only

of

production

of

of

concretization

they

theory

tendency

prices

of

a further

the

not

it.

analysis

Prices

yet

would

occurred.

demands the
fer

prices

analysis

social
of

the process

of

it.
are

of

themselves

reveal

Our value

values

from
of

That

this

production

be impossible

would

analysis

production;

genuinely

place.

values.

validity

of

transfer

necessary

from

of

natural

may deviate

presupposed

which

The application

it

which

Marx'a

prices

the

shows what

to

from

of

of

had uncoverd,

phenomena

prices

in

but

theory,

application

without

similar

the deviation

if

It

significant.

how and why observable

plain

the

Preobrazhensky

development

capitalist

chapter.

if

even

tendency

the

reverse

this

production
that

dis-

of

-184-

equilibrium

it

what

They

exist.

serves

but

flexibility,
it

ic

in

and the

another,

conscious

control,

its

the

for

present
to

this

some of

recall
"

"natural"

dispropor-

the

Crisis,

way:
reproduction

Pre-

essential

resolving

expanded

such re-

own reproduction.

periodically

of

unless

in

acquires

more

rule,

allowance

means of

avoid

resumption

destruction

on a new econom-

footing.

constituent

of

his

composition

of

capital

of the

department

II,

systematic

transfer

This

the

means that
in

ployed

is

wealth
its

in

terial

wealth,

creative
or

the

to

as a result

of

it

and of

saying
to

produce

its

results

Though
the

by machines

only

potential

socialism

of

portion
Whether
leads

and their
however,

can create

em-

relatively.

a society's

is,

production.

but

necessities.

crisis

by the

production

basic

in

I than

means of

an ever-larger

capitalism
former,

of

population
in

development

the

free

goods

organic

be overcome

society's

that

the

department

absolutely

to

of

in

can only

only

material

leisure

for

where

higher

not

ability

of

whether

capitalism,

production

capital

grow

need

organization.
pre-conditions

of

its

upon

is

the

tantamount

production

the

to

capital

I must
is

pure

disproportion

volume

from

crease

and the

the

dependent

increased

social

of

it

labor,

of

one more fundamental

established

and where,

resulting

this

population

this

grows,

department

Historically,

Under

analysis.

division

social

has

Preobrazhensky

In conclusion,

of

its

how capitalism

engenders

of values,

future,

material

can never

be the

will

society's

the

the

detailed

obrazhensky

tions

in

"over

phrase,

equilibrium

represent

require

will

Marx's

than

rather

the

to

an inma-

greater

a question
possibility

it
make
can

reality.

NOTES TO CHAPTER 4
1.

Capital,
portant

2.

VKA 17,

III,
p. 223.
when we deal
p.

55.

This argument
will
with the accumulation

become increasingly
capital.
of fixed

im-

-18561.

3.

Ibid,

4.

in reality,
Ic should,
grow
in the organic
composition

S.

VKA 17,

6.

See above,

pp.

7.

VKA 17,

55-58.
identify

8.

For a concise
and stimulating
"Value
and Production
chapter

9.

VKA 17,

p.

p.

by 60.6,
in
of capital.

line

with

the

1% increase

61.
134-35,

and Part

III,

below.

In zakat Kapitalizma
Preobrazhensky
did not spethis
tendency
towards
in departcifically
over-production
he dwelt upon the disconInstead
ment II as a cause of crises.
between the time when the demand for new means of productinuity
first
tion
arises
and that
when the production
of these new means
is actually
This led him to treat
completed.
the
of production
of ample reserves,
especially
existence
of fixed
capital,
and the
turnover
period
of fixed
prolonged
capital
as essential
parts
of
deal with all
his analysis.
We will
in much greater
of these points
detail
in Part III.
pp.

p.

63.

discussion
topic
of this
Price, " in I. I. Rubin,

see the
op cit.

-186APPENDIX
THE

In Part

II

in

that

+ 1000v + 1000s.
100%.

tation,
Our first

Their

capital

+ 1000v) ]=
In

If

is

profit

will

way these

individual

second,

ploitation)
said

overthrow

in

capital

industry,

of

on their

one branch

of

4000c

composed

of

rates

exploi-

of

differ

radically.

[SOOs/(1000c
=

p'

a rate

Differ-

+ 500v + 500s,

is

will

profit,

his

second,

+ 500v)]

[1000s/(4000c
=

profit

would

be if

entire

equal

is

also

will

made up of
+ 1000s,

then

quite

a bit.

The first

will

p'

= 1000/2000
in

both
rates

of

organic

was so fundamental
of

capitalist

our

In

= 50%.

(given

compositions
that

it

differ-

their

again

have p'

fact,

the

equal
were

seemed to

=
only

and in

illustration

first

profit

earn

1500c + 500v + 500s,

+ 1000v

their

theory

capitals

1000c

capitals,
have

Marx,

of

differ

would

equal

one capital

comprised

= 25%; the

result,

of
have

will

depending

profit,

however,

profit,

a rate

value.

of

have identical

will

we see that

profit.

500/2000

our

capital

same way,

of

and another
of

have

theory

need the

20%.

the

ent rates

of

the

down as 1000c

heavy

say,

addresses

his

aggregate

capitals

rates

will

Our second

= 331.
3

rates

The two

of

breaks

branch,

another

in

the

industry,

light

say,

production,
while

Suppose

compositions.

organic

Marx

contradiction
rates

OF PRODUCTION

Capital,

of

different

have

will

ent capitals

III

basic

a seemingly

resolve

OF PRICES

APPLICATION

Volume

of

TO CHAPTER

rates
the

of

The

same.

threaten

ex-

to

production.

have
industry
We have thus demonstrated
lines
different
of
that
in
the
differences
different
to
rates
of profit,
which correspond
limits,
indicated
their
organic
composition
and, within
of
capitals
time
the
different
same
turnover;
also to their
given
periods
of
that profits
are rethe law (as a general
tendency)
of turnover,
that,
lated
and
to one another
their
the
capitals,
of
as
magnitudes
in
equal profits
consequently,
yield
capitals
of equal magnitude
comequal periods,
applies
of the same organic
only to capitals
These
stateposition,
value.
even with the same rate
of surplus
basis
hold
of all
been
has
the
ments
good on the assumption
which
their
at
sold
are
our analyses
the
that
so far,
commodities
namely
from
There
is
hand,
doubt,
that
aside
values.
no
on the other

-187incidental
distinctions,
and mutually
compensating
in the average
in the various
rate
of profit
branches
do not exist
in reality,
and could not exist
without
the entire
system of capitalist
It would
abolishing
production.
here
therefore,
that
the theory
is incompatible
seem,
of value
incompatible
process,
with the real phenomena of
with the actual
for this
and that
reason
to understand
production,
any attempt
l
these phenomena should be given up.

unessential,
differences
of industry

Marx was not

out

was pointing
is

to

adequate

the

it

A critical

Marx was to

of

still

profits,

equal

It

in

to

his

level

assumptions
fact

the

explain

industry

their

of

of

high

a very

capitalist

regardless

He

value.

limitations.

at

was needed

throughout

exists

of

and regularities

an analysis

and be able

analysis

profit

earn

is

tendencies

modification

his

extend

rate

capitals

equal

but

theory

has its

analysis

basic

most

the

abandon

value

the

out

system,

capitalist

an average

a purely

trace

of abstraction.
if

that

to

prepared

really

that

and that

organic

composi-

tions.
Marx resolved
The theory

tion.

theory

sede the

deviate

prices
ing

at different

prices

of

since

this

equal

the

size,

but

different
of

It

uses

of
of

Marx

that
in

line

reproduction

profit.

equal
capitals,

value
theory

of

producsuperhow

explain

start-

necessary

price

production
but

production,

will

with

our

application

Take

the

use a very

two

of

they

operate

earn
of

their

average

total
total

profits;

equal

size,
rate

of

example,

simple
prices

of

of
are

proof

capital.

of

= 1000,
1000,
=

formation

that

capitals

compositions
capital
capital

the

of

but

must

is

its

is

of
or

to

value

does,

regardless

How, then,

of

prices

abrogate

not

explication

organic

capitals

of

schemes.

have unequal

of

capitalist

detailed

the

be most

theory

and the

value

abstraction.

go into

the

theory

does

The theory

theory

of

his

production

700c + 300v + 300s--total

800c + 200v + 200s--total

we know that

more,
rates

not

will

of

values.

production

to

A.
B.

prices

same theory

levels

We will

duction

the

in

contradiction

value.

from

the

of

of
of

thus

point;

are part

Yet

the

must
profit

300;
200;

p'
p'

and what

is

s=
s=

have

= 30%
= 20%

equal

formed?

The

-188total

surplus
rate

general

value

therefore,

25%.

of these

capitals

in

as it

800c + 200v + 250p,

instead

As a result

total

If

But
of

the

to

profit

surplus

250 in

product

each

value

it

product

product

of

the

of

values.

of

50

value.

two capitals

by redistributing

is

This

the
basis

on the

values.

at

its

50 over

at

be

1250 as well,

its

terms

two capitals

B will

basis

product
in

be 1250,

will

on the

A sells

Cap-

profit.

Capital

come to

will

is

formed

are

between

in

fact,

Capital

tals

with

same,

the

total
is

it

is

rate

just
of

of

profit

total

capital

already
their

of

lower

will

and so the

it

with
the

while

Cap-

then

equal

500,

value
risen

from

final

products

values
of
high

average;

its
The

21.4).

equalled

composition

than

+ 300s = 2100,
would

above

sells

(also

causes

Capitals

have

unequal

2000 to

2800.
be:

will

= 2121.4
= 1178.6

below
what

+ 300v

of

capitals

with

work

surplus

A that

profit

organic

composition.

1500c

now 17.86%

sells

3300,

a low

the

Capital

be at

will

+ 300v + 321.4p
+ 200v + 178.6p

B that

equals
average

the

profit

1500c
800c

the

rate

as it

A had equalled

B remained

A.
B.

ganic

total

same process

Capital

The rate

terms

the

total

terms.

Capital

terms

prices

value

this

as before.

and

total

product

its

of

each earn

value

B sells

is,

size.

size.

Now,

total

other;

price

since

surplus

Clearly

ital

each

same in

logical,

created

will

purely

The

profit.

and its

redistribution

The two compensate

quite

was in

and Capital

value,

must be the

+ 250p,

and its

this

of

its

under

they

2000.

two capitals,
rate

the

1200 we had when we calculated

the

of

the

average

as their

we see that

1300,

than

rather

this

is

capital

for

average

see how much of

to

+ 300v

The total

apply

appropriate

be 700c

A will

500.

the

then

turn

will

we do this,

If
ital

We must

they

of society

i. e.,

profit,

of

is

produced

in

values.

to

be

capital
organic
those

(21.4

value
total

Thus

we see
from

those

with

compositions
with

low

in

product

transferred
to

above)

organic

price
that

capi-

a high
will

or-

have
composi-

-189tions

have

will

equalization

cess of
from

a rate

those

to those

of

surplus

What effect

of

is

too

value

is

high

in

too

low.

on the

To demonstrate

before?

than

profits

have

this

will

higher

profit

rates

surplus

whose
whose

alyzing

of

what

the

must

Hence any pro-

average.

by necessity
to

relation

shift

the

total

values

capital

reproduction

schemes

we were an-

happens we will

use the

following

figures:

The figures

had the

to work

with.

position

of

II,

in

we used

have

would

+ 2000v
+ 2500v

10,000c
3000c

I.
II.

this

have
in

capital
to

show that

to

do with

where

Ic/v

is

considerably

chance

of

our

ital

equals

thing

then,
I.
II.

that

tributes

it

I(v+p/x)

the

the

to

total

surplus

value

in

equals

+ 2000v
+ 2500v

line

about

disproportion

actually

composition

organic

a scheme

chosen

is

there

no

total

the

cap-

The first

accordingly.

its
of

and dis-

profit,

capital,

we have:

+ 1542.8p/x
+ 707,2p/x
3800,

of

we proceed
worsen.

IIc

while

and a stock
If

value

one half

accumulates

the

+ 2257.1v
+ 2821.5v

414.

surplus

department

has nothing

4500;

25.71. %.

equals

com-

symmetry.

any artificial
comes to

organic

+ 3085.7p
+ 1414.3p

with

just

profit

the

redistribute

consumption

approximately

of

where

and

and simple

in

that

describing

but

IIc/v,

than

the

So we have

we select.

as well,

neat

that

double

we are

attributed

The rate

fairly

being

exactly

tendency

greater

each department

11,285c
3385.8c

of means of
to

to

10,000c
3000c

Assuming

I.
II.

17,500.

is

just

served

however,

being
the

off,

of

peculiarity,

figures

the

results

is

the

have

would

advantage

department

whatsoever

To start

chapter

additional

They

and we want

+ 2000s
+ 2500s

= 3385.8.

unsold

over

There

means of

two more years

is

production
we will

a deficit
equal
see

-190Two:

Year

+ 2257.1v
+ 2821.5v

11,285c
3385c

I.
II.

+ 2257.1s
+ 2121.5s

Total
Total
p'

After

the

redistributing

after

which,

accumulation,

gives:

I.
II.

12,736.3c
3820.4c

+ 2547.3v
+ 3184.3v

I(v+p/x)

= 4288.8,

giving

Year

value

+ 2257.1v
+ 3483p
+ 2821. Sv + 1596.3p

11,285c
3385c

I.
II.

surplus

+ 1741.5p/x
+ 798.2p/x

a deficit

of

After

12,736.3c
3820.4c

+ 2547.3v
+ 3184.3v

the

redistributing
I.
II.

after

+ 2547.3s
+ 3184.3s

surplus

+ 2547.3v+
+ 3184.3v+

12,736.3c
3820.4c

so that,

accumulation

we get:

+ 2874.9v
+ 3593.3v

I(v+p/x)

= 4840.4,

yielding

a deficit

production

= 528.6.

of means of
What is
surplus

interesting
in

value

the

average

is

carried

out

plus

is

created

by the

izes

the

amounts

terms

value

takes

ance

if

then

distribute

the

exchange

of

took
this

labor

funds

place

power

to

according
power

this

of

the

value,

I.

average

in

rate

two departments
following
however,

then

production,
out

profit

production

But once
and sur-

accumulation,

the

in

accumulation

profit,

department

employed

the

employed

immediately

new surplus

of

distributing

words,

labor

exchange

basis

redistributing

after

of

in

and a sur-

consumption

that

rate

over-production

on the

other
place

is

with

line

production

In

means of

result

and growing

= I(v+s/x).

in

this

a large

accumulation

+ 1965.5p/x
+ 900.8p/x

about

produces

value

we have:

3930.9p
1801.6p

14,374.2c
4311.8c

IIc

= 468.4.

consumption

Total
s= 5731.6
Total
capital
= 22,288.3
p' = 25.72%

value

I.
II.

the

means of

Three:

I.
II.

plus

s= 5078.6
capital
= 19.748.6
= 25.72%

of

of

such
would

accord

equal-

profit

in

that
be in

bal-

Once we

production.
in

which

with

the

-191rate

average
production

in

exchange

must

rate

in

But

equalized.
no time

this

equality

various

capitalists

duction

schemes

in

that

indicate

would

conclusion
in

place

the

of

continued

to

the

will

demonstrate

ishes,
II

seem to

in

the

re-emerges,

prices.

that

main

of

fixed

capital

Part

previous
even with

III,

the

that

over-production
towards

application

form

in

over-production
of

prices

then

result
making.

one year,

of

unthat

department
in

take
II.
is

We have
along
as we

assumption,
in

is

original

department

we are

over

Once we remove

tendency
the

turns

is

a phenomenon

this

chapter,

assumptions

capital.
in

this

repro-

terms

value

must

I to

department

the

What the

capital

the

relation-

Preobrazhensky's
of

in

bears

between

I,

is

first

out

The value

department

are

there

production

in

II

products

whose external

A transfer

text

department

carried

together.

terms

an average

reality

connections

crises.

from

of

from

equilibrium

in

still-over-simplified

circulating

and the

hold.

direction,

assume that

with

in

in

equality

existence

is
All

that

when commodities

In

mutual

of

price

ephemeral.

process,

source

in

exchangeable

prices.

an over-production

reverse

the

is

terms

capital

departments

separate

a constant

the

production

these

reproduction

As we stated
product

holds

is

their

transacted

the

would

only

into

however,

of

that

of

which

show,

a moment in

mistakably

being

which

then,

is

an over-

an initial

transferring

converted

of

hides

values

to

according

link

the

the

it

and we have

over-production

prices

for

(and

terms

this

seem,

that

appearapce
are

of their

a vehicle

evaporates,

price

Yet

would

and then

terms

in

such

sequence

nominal

only

terms

is
I

equality

place).

It

profit

to department

ships

department

values.

of

value

this

take

are evaluated
of their

profit,

of

I van-

department

production.

-192NOTES TO APPENDIX TO CHAPTER 4

III,

Capital,

2.

See I.

3.

the product
We assume, as did Marx, that
to
of the previous
year,
it consists
into
that re-enter
that
the
of commodities
the extent
is
by
treated
the capitalas
a
value
element
capital,
productive
The debate over how these commodities
in the ensuing
ists
year.
deviation
be
their
to
own
reflect
re-evaluated,
of prices
should
is a complex one, and does not affect
from values,
the argument
forward
here.
putting
we are

I.

p.

153.

1.

Rubin,

"Value

and Production

Price,

" op cit.

-1935

CHAPTER
EXPANDED

So far

that

the pre-capitalist
for

the

existence

sector

provides

Second,

development.

of production.

the

What then,

is

sustain

VKA 17 Preobrazhensky
the

complete
in

the mixed

the

the

system

the

petty

italism,
is

in

is

to

brought

will

VKA 17 and,
telescope
We begin
economy under

the

condition

as with

the

and reshape
with
simple

danger

previous

is

part
two

of

and thereby

to

reproduction

reproduction,
with

exchange

of

The transfer

in pure

social

of

deficit

economy
of means
of

means

reproduction.

expanded

Preobrazhensky's

chapters,

cap-

The sec-

elastic.

the

cap-

and stagnation,

crisis

more

of

over-production

of
of

via

system

i. e.,

as a result

difficult

of

entire

disproportion,

part

equilibrium

an initial

is

capital-

a rearrangement

of

which

in

expanded

only

as well.

production,

re-emerge

of

not

the

departments

disproportionality

given

show/

towards

USSR.

the
how,

sector

it

with

original

most

of

its

of

final

the

with
outlet

is

expanded

by necessitating

that

course

production

of

equilibrium
but

the

question,

conditions

under

relations

an essential

In

analysis

to

show two

capitalism

petty

this

answer

and when there

of production,

to

to

to

two component

of

show how even when the

the

perhaps

role

pure

its

of

One is

within

petty

in

reproduction?

we saw as an essential

onto

with

of

economy

sector,

forces

equilibrium

is

the

tasks.

attains

of production,

This

growth

his main

as a whole

now shifted

is

for

sector

and which

ond task

tendency

out

capitalist

bourgeois

that

capitalism

commodity-socialist

the productive
ital

set

two

CAPITALISM

attempt
and
production/exchange

of

expanded

groundwork

Here we have
within

the

in

to

attempt

CONCRETE

proportionality

that

disequilibrium

chronic

UNDER

Preobrazhensky's

and maintaining

achieving

ism's

followed

we have

First,

things.

REPRODUCTION

we will

argument

by necessity

in
have

it.

a scheme similar
reproduction:

in

structure

to

that

for

our

mixed

-194KI.
KII.

2000c
1200c

PI.
PII.

1500c + 1500 consumption

1O50c + 2100 consumption

Right

in

duction
two

the
is

the

petty-commodity

sectors,

we see that
in

than

greater

to

production
in

capital"
PII.

Finally,

equal

to

the

the

in

production

scheme is

K expands,

in

between

interesting

ularly

in

portions

the

system

ly

covering

if

and when we took

forces

old

within

necessarily

compel

P and K, a problem

famine
all

(although

volume

of

its

Before

are

but

proceeding

case

Within

capital

in

ratio

of

means of

KI

composition

far

higher

of
in

than

but

not

yet

would

in

of

the

see that

we must

of

those

partic-

of

the

dispro-

be large-

case

for

stable;

of

the

the

revealed

make one cautionary

changes

this

though

but

between
which
goods

in

over-

case

Soviet
by case
remark.

would

Soviet

when both

is

this

exchange
ignored

with

on,

productive

of

material

as regards

especially
a variation

of

context

The last

not

later

rearrangement

by and large

the

is

an interest

when dealing

argument
within

as all

stayed

structure

Preobrazhensky
our

the

Case

K and we would

have

show

reproduction.

constant--this

within

in

dramatically

most

will

when

Production

cases.

analysis,

our

happens

see what

expanded

production

and we shall

more realistic,

mechanics

case

production).

pand simultaneously;
torically

of

total

we do this
P's

K.

almost,

possible

This

question

changes
which

three

originate

This

its

to

is

point

up the

become central

will

Preobrazhensky,

and P remains

would

ground.

P while

is

term)

K and P under

this

at

the

of

"organic

PI is

P falls.

be when K expands

two would

(the

P--the

Pro-

scheme.

in

than

in

We have
in

that

PI

production

says

motion.

while

this

of

PII.

do,

to

inter-relation

the

of

of

= 6150

production

composition

true

in
of

sense

volume

Total

greater

organic

fund

conditional

What we want
the

the

consumption

= 3000
= 3150

is

sector

= 5000

production

characteristics

The same is

KII.

the

Total

fund
fund

some interesting

we see

off

+ 500s = 3000
+ 400s = 2000

+ 500v
+ 400v

the

K and P exhisbe
may
economy,
one.
Preobra-

-195it

makes

zhensky

quite

bounds of

a value

departments

of

clear

analysis.

both

sectors

what is

left

between

PI and PII,

much of

a simplification.

over

after

capitalist

or petty

production

sector

any imbalance

between

Preobrazhensky

points
(a case

overstep

immediate

concern

economy,

in

Let

both

duction

at

same is

the

surplus

3)P as a whole

2% each year.

PI.
PII.

1470c
1029c

+ 1470 consumption
+ 2058 consumption

the

deficit

of

has grown.

Initially

was exactly

balanced

we had in
which

it

of production.

means of
it

P.

had to
PII,

will

There
exchange
on the

1200
of

PI required

other

because
in

tendencies
the

analyze

make a few

both

departments;

in

concrete

assumptions:
2)c/v

declining
our

mind,

our

a mixed

grows

reproat

capital

means of
means of

could

production
consumption
of

sector

capitalist

I(v+s/x)
750
-

same quantity
hand,

the

within

IIc

first

194 we see that,

one on page

surplus

the

moment,

fund
fund

production

equalled

by the

the

fund
fund3

the

scheme with

between

analysis,

to

this

and that

reproduction.

For

our

agricultural

be:

+ 546v + 250 consumption

+ 447v + 200 consumption

year

the

11).

experiences

With

2204c
1353c

production

this

in

value

de-

exchange

abstract

We want

scheme.

KI.
KII.

all,

for

we saw that

of

when we come to
2
1920's.

of

of

set

of

and
too

each other,

process
true

balances,

obviously

I of

with

Chapter

more

start

we compare

for

its

of

the

the

up in

out

the

our

KI and KII;

If

origin

to

half

a rate

disrupt

we have

lay

to

exchange

the

is

2 and 3,

and department

the

KI and KII,

this

reality

Chapters

between

the

between

into

take

for

account

the

within

exchange

we can build

us go back

by 1% in

that

USSR in

the

1)K accumulates

the

is

in

enter

limits

the

In

sector

out

operating

exchange

place.

them will

still

need

internal

we will

upon which

situation

when examining

Above,

the

we cannot

Thus

has taken

I of

and PH

we are

we merely

all

partment

KII

that

= 450.
of

This

peasant

of

1500,

peasant-produced

provide

only

1050 for

means
PI's

-196and could

consumption

instance

In this
means of

the

Socially,

iliary

goods,

this
etc.,

an identical

between

the

116 in

of
icit

it

two

from

solution

here.

then

the

It

run

place
ible

risk

from

less

spheres
since

petty-commodity

but
then

this
look
PI.
PII.

P's

of

its

history

we tried
production.

would
like

all

the

of

is

This

values,

possible

take

place

productive

is

It

P is

also
ousts

capitalism
less

by simply

PII,

of

while

constant

making
would

PH
fall

PI stayed

shift-

a possible
would

an actual

as expansion

Then P as a whole
in

not

consumption,

demands.

do this

if

peasantry

product

a def-

such

capitalism

each peasant

with

as a more or

is

this

because

exchange

KI and KII,

since

elasticity--the

physical

P has shrunk

capitalism,

Certainly
desirable,

of

K has jumped

economy as a whole

between

capital

shows us that

to

consumption,

within

the

pure

rearrangement

production

production

Suppose
in

of

aux-

PI needs

and that

within

for

for

former.

loss

great

450

of

consump-

be made up by mutual

and some means of

having

raw materials,

production

a deficit

standpoint,

production

sume more or
of various

if
P.

450 in

means of

means of

however,

massive

technical

the

itself

sumption

drop

of

means of

countryside,

Before,

the

not,

within

some means of

position,

to

is

It

entirely

of

production.

latter

surplus

450 in

The deficit

problems.

We have

be much better

would

the

a rearrangement

the

requires

can no longer

sectors.

require

of

its

commodities.

foods.

The surplus

means of

would

ing

we have

The disproportion

to 441.

KII

exch angeable

industrially-produced

of

or processed

557.

450 to

surplus

come from

which

Now, however,
from

its

its

PI exchanges

easy.

means that

quantity

such as textiles

is
for

KII

1050 of

only

solution
to

production

tion.

purchase

crisis.

forces

took

flexmore
much

farm

producing

and with
can simply
or

concon-

contraction

a realistic

sup-

and subordinates
process.
absorb

the

by 2%, or
the

same.

entire
123,
P would

this:

1SOOc + 1500 consumption

1009c + 2018 consumption

fund
fund

= 3000
= 3027

Total

production

= 6027

-197Even this

would
to

duction

it

but

exchange

K, and its

in

tion

exported

the

second

first

would

like

this:

+ 546v
+ 447v

for

capital

capital

the

the

first

surplus

of

year

next

KII's

be less

severe,

The only

its

Total

works,
is

consumption
In

same amount.

surplus

by 1% in

way out

disproportion

the

and its

value,

both

departments,

its

= 5533

production

be (rounding

would

produc-

means of
for

pro-

means of

would

year's

half

= 3296
= 2247

means of

To show how this

imported

growing

+ 546s
+ 447s

of

S57 - 491 = 66.

P.

K accumulating
of

shortfall

within

production

491 in

consumption

to

that

trade--the

look

2204c
1353c

means of
equal

have

only

The overall

supposes

with

product

still

capital

and means of
year,

would

of

the

composition

Its

KII.

rearrange

organic

KI.
KII.

with
surplus

by foreign

is

PI

be large,

Preobrazhensky
overcome

do.

still

would
be to

will

not

fractions

off

for

sim-

plification):
2426c
1524c

KI.
KII.
This

however,

time,

decline

in

level.

We then
PI.
PII.

that

disproportion

the

decline

matters

are

557 to

655.

year
cit
tions

in

society

PI

continues

to

fund
fund

= 2940
= 2967

Total

over

ability

and made PIT

entire

the

worse.
to

has actually

is

absorb

as bad as it

getting

the

PIT

making

not

P evenly

PI's

when we let
for

is

still

441--it

by 2% we let

production

on PII;

+ 1470 consumption
+ 1978 consumption

when we tried

the

previous

fall

P's

the
at

produce

entire
the

old

have:

1470c
989c

As before,

when we cut

sector

fund
fund

273 consumption
+
+ 223.5 consumption

596v
+
+ 499.5v

K's

up has

make it
declined
fall

in

P rest

the

grown

decline

to

on PII).

Even if
for

to

only

the

whole
from

481 (from

case

in

the

a
first

The overall

defi-

these

condi-

we modified
both

on the

has climbed

deficit

compared

655 - 481 = 174.4

shoulder

Yet

two departments.
internal

fall,

year's

been had we distributed

have

would

first

the

of

all

= 5907

years,

keeping

PI

-198-

stable

581.5

of only

The social

the

worse than
fall

same magnitude.

to the

ratios

Only

social

in means of
it

sumption
surplus

peasant

primarily

KIl,

mediate

goods

means of
capitalism
petty

P was

from

Preobrazhensky

the
does

new arrangement

656 in

fund

or

PH
according

in

the

two

655 of

KII;

it

this

of

in

helps

reveal

means of

same time

had to

its

secure
in

produced
within

the

upon petty

base

us to

of

the

its

means of

of

of

historical

of

the

see both

the

production

of

actual
just

absolute
in

and a shift

sector,
and other

the
of

the

those

or-

peasant

whereby

by capitalist

raw materials

an increase

con-

marketable

process

capitalist

Thus

its
of

production

was ousted

countryside.

production,
favor

whole

P, towards

allows

means of

655

PI can sell

can dispose

consumption

the

Now, however,

655.

capitalist-produced

needs

deficit

KII's

production.

equilibrium.

latter

the

as be-

year,

PI has a mar-

so that

at

= 5907

production

production

remained

course,

the

Total

this

means of

for
from

= 3150
= 2757

restructured

can attain

terms,

in

in

escape

consumption

by 2% for

as a whole

production,

production

entire

PI by 210 and cutting

the

fund
fund

has been
of

what

ment of production

P.

this

to

fallen

has,

requires

the

we cannot

within

capital

P has

production

At

decline

year

within

we distribute

If

production

production

riculture.

problem

production

now production

In real

the

shouldered

first

be 74,

would

in

and obtain

igin.

the

+ 1575 consumption
+ 1838 consumption

economy

production

where PII

production

commodity-product

of means of

year

means of

commodity-product

and PII).

constant

we get:
1575c
919c

ketable

the

of

production

fore.

PI

total

by the

Total

first

rearrange

by increasing

PI.
PII.

of

a disposable

as bad as when the

not

actually

departments

deficit

how we approach

No matter

have

still

the

by both

evenly

need to

in

case

P (though

in

shared

this

PI would

throughout,

agbut
inter-

rearrange-

such

kinds

encroachment
relative
goods

weight
capitalism

of
of
of

-199for

required

torical

its

the

of

has

assumed

satisfied

the

material

two

the

of

ments

of

ist

sector.

lines

We have
deal

and will
We will

not

deficit

larger

slightly
which

for

KII

of

through

the

duction

in

process
This
instead

of

reproduction

means of

in
this

reproduction

of

lead

where,

same, we reversed

is,

reduced

the

I by the
in

the

pro-

more difficult

KI.

sector,

"over-pro-

will

expanded

disproportion,

initial

the

If

examines.
we have

consumption

to

As Preo-

same manner--

the

with

capitalist

us back

before,

than

increasing

Preobrazhensky

means of
the

the

P (thereby

to

problem

in

in

the

case

as a whole.

economy

where

production?

we would

the

employed

second

KII

out-

PI has a

less.

production

combination

from

production

means of

in

capital-

example,

In that

achieved
within

least

basic

this

of

somewhat

the

still

or

capital

automatically

a deficit

in

alone,

the

in

terms

depart-

the

its

process

value

at

in

the

IV as well.

means of

capital

"over-production"

of

For

of

then

in

problem
Part

Part

various

case,

variant

is

exchangeable

is

the

simultaneously.

production

equilibrium

us to

the

with

disproportion

the

this

see in

the

in

been necessary

in

production

of

either

takes

duction"

their

transferring

of

have

the

his-

of

of

exchanged
in

been

extensively

much time

what

actual

economy

description

this

not

examined

rearrangement
PI),

this

we shall

Soviet

production

already

amount

notes,

of

would

it

the

the

reflect

but--as

that

capital

means of

ameliorates

brazhensky

Had

spend

K and P expand

both

that

needs

with

this

of

throughout

sectors.

some rearrangement

course

however,

add,

equilibrium

also

tion

future

necessary

does

only

development,

capitalist

We should

twenties.

Not

expansion.

movement

IV--mirrors

of

have

either

keeping

total

the

relative

of

capital

volume

same amount);
capitalist

or

sector

to

in

production

the

sector

capitalist

weights

of

departments

employed

in

II,

we could

keep

the

expanded

a scheme of

construct

I and II

and increased
the

same as before

volume
for

(that

produc-

of

capital

both

depart-

-200but

ments,

would

We have already
IIc

cause

the

v,

edly.

In the

and there
ital
or,

have

forth

is

We are
weights

left
the

of

brazhensky

the

social

first

that
of

turn

PIT rising--here,
level,

the

194,

keep pace

with

I(v+s/x),

in

it

is

KI.

Cap-

KI to

take

could

KII,

place

PI and an increase
any further,

example

of

in

from

in-

to

value

production

shift

this

little

of

in

capital

for

practical
department

features

historical

capitalist
the

of

capi-

is

still
of

adding

600 to

for
too,

6100.

capital
KI

a redistribution
the

total

P will

now look

same as in

the

than

and taking

in

KI has

in
the

in

P is

increased

following:

at

at

KII.

PI falling

kept

both

has

that

much from

that
P, with

within

like

All

first

the

of capital

IIc/v).

employed

production

= 5000

production

compositions

greater

Preo-

scheme:

is

sector

volume

KII,

Total

relative

I and II.

departments

following

organic

the

reversing

in

the

with

as are

Ic/v

the

calls

down mark-

production

alternative,
invested

this

(i. e.,

is

be-

slow

the

the

one of

capital

in

on page

expense
in

is

but

would

conceivable,

II

IIc;

the

value

direction,

composition

in

is

surplus

means of

pursue

2400c + 600v + 600s = 3600

840c + 280v + 280s = 1400

departments
changed

of

amount

larger

to

reverse

happen

10
with

production

example

not

organic

illustrates

KI.
KII.

the

easily.

its

of

fail
of

a reduction
does

quite

What would

surplus

example,

theoretically

development.

talist

share

in

capital

possibility

an absolutely

fact

in

move in

of

by an even greater

this

of

would

department

to

169).

to

preceding

The higher

as opposed

previous

to

Preobrazhensky

importance.

Total

growth

our

P, calling

it

(page

bean over-production

then

even though

last

a smaller

IIc

as we saw from

in PII.

This

of

future

would

would

within

the

rate

above

composition

this

with

was adding

be devoting

would

crease

it

organic

I(v+s/x)

outdistance

because

it

it

mentioned

would

beginning,

the

raise

We can dispense

H.

department

that

sharply

around

and
the

-2011184c
1244c

PI.
PII.

Here we have
KI(v+s/x)
by the

KIIc

exceeds

bourgeois

by just

fund

tion

over-production

petty

for

market

means of

KI's

this

surplus
of

composition

The first

thing

KI(v+s/x)

over

can provide
for

in

both

its

In

sectors.

departments

made up

PI's

consump-

shortage

of

disturbed

as

K we accumulate

and increase

Distributing

each.

since

a necessary

scheme is

this

60,

This

than

greater

and a source
of

K of

840
60).
=
is

PIIc

equilibrium

both

the

the

organic

accumulated

is

KIIc

new product

the

fund

consumption

1207c
1269c

The deficit
cause PIIc
rise

of
is

is

that

the
to

now equal

department,

each

in

both

will

significant

production

as a market

for

in
PII's

than

yield

the

+ 300 - 947 = 8.2.

by 47,

ratio

P will

in

production
larger

rises

production,

of

by 74)

PH

constant

If

and disto

capital

be as follows:

fund
fund

+ 1207 consumption
+ 2538 consumption
means of

655.2

only

to

according

of means of

surplus

P by 2% (PI

in

slightly

What is

of means of

in

fund
fund

+ 300 consumption
+ 140 consumption

we notice

tribute

serve

and therefore

+ 655.2v
+ 312.9v

production

PIIc.

amount,

by 1% in

we increase

uniform

where

of

capital

2644.8c
947.1c

PI.
PII.

sector,

accumulation

value

(900

= 6100

production
in

production

amount

The

Total

we get:

accordingly,
KI.
KII.

means of

commodities

consumption.

the

of

= 2368
= 3732

by this

surplus

soon as we introduce
half

fund
fund

+ 1184 consumption
+ 2488 consumption

the

from

P has now risen

fund

consumption

a somewhat

higher

absolute

KI can no longer

PI,

that

PII.

It

has only

8.2

excess

means of

consumption.

offer.

be-

62,

and so a

increase

make up the

is

to

of

60 to

in

deficit

Nor can it

II
department
Thus we end up with the case where the expansion
of
II
the
department
has
petty
of
of the capitalist
sector
replaced
II's
for
bourgeois
both
production
the
of
sale
sector
as a market
this
As
KI.
of
to
a
result
and as a supplier
of consumer goods
its
53.8,
PIT
8.2,
62
constant
of
or
situation,
cannot restore
for
hand,
that
it
On
lacks
amount of
the
one
a martket
capital.
hand, it suffers
its
a corresponding
and, on the other
own goods,
form.
in
their
material
of means of production
shortage

-202can be achieved
either
PII,
or byltransferring
l
next year.

Equilibrium
throughout
PI in the
This

is

proportion
This

on.

emerges

condition

+ 655.2v
+ 312.9v

the

And arranging

KI.
KII.

2912.2c
1066.7c

PI.
PII.

1231c
1294c

fund

ing

not

production

for

ment II

the

of
is

there

Whereas

whole,

it

deficit

PII,

but

capitalist

before

for

way around,
the

whole

the

amount

means of

social
of

63 + 24.1

plus

the

economy as a whole:

fund
fund

between

PIIc

and the

What is

more strik-

make up any of

this

deficit

in means of

even
KII

fact

internal

the

cover

now exceeds
in

the

that

K could

But now this

the

deficit
"We thus

a goods

famine

in means of

The cause,

depart-

as

sector
as a

system

make up some of

K and P.

"12

of

by 24.1--

capitalist
for

existed

needs

KI(v+s/x)

both

= 87.1.

P to

allowing

63.

disproportion

from

production

goes

to

once more,

production.

and emanates

dis-

the

and reproduction

year,
for

production

by the

was attenuated

next

disproportion

sector.

the

we assume that

fund
fund

can't

means of

of

year

consumption
consumption

the

KI not
it

present

picture

PI has grown
can

if

the

+ 327.6
+ 154.4

sector,

only

a deficit

well.

K for

following

715v
+
+ 349.5v

of

starkly

to

be:

K will

in

the

petty-commodity

that

the

+ 1231 consumption
+ 2588 consumption

consumption
is

in

back production
forces
from PII

+ 655.2s
+ 312.9s

capital

grow by 2%, we have

In the

in

product

2644.8c
947.1c

KI.
KII.

even more

somehow overcome

year's

by cutting
productive

exists
have

all

the

throughout

production

Preobrazhensky

P's

to

concludes,

is:

both
in
capital
of
the rise
the organic
composition
the
rapid
more
the
second...
and
of
capitalist
sector,
lower
due
the
organic
to
in
KII,
rate of accumulation
which was
Thus,
KI.
to
department
in this
as compared
composition
of capital
develops
here,
mechanicalthe
as
process
of expanded reproduction
above
out
ly, the tendency
that
pointed
we
of a capitalist
economy
overforces
its way to the fore--the
towards
systematic
tendency
capital,
of
in branches
low
composition
accumulation
organic
with a
production
is,
in the present
branch
that
in
capitalist
of
the
case
in turn
And that
compels society-whether
of means of consumption.
firstly...
...
departments

in

-203more or less elastically

or through
a crisis--to
its
redistribute
forces
by increasing
the capital
invested
productive
in branches
of the production
of means of production.
last
This
its
during

is characteristic
example,
which
of capitalist
economy
is of special
interest
period
of development,
to us for
it
the additional
that
in part
(although
reason
also
reproduces
in an overly
form)
the processes
general
and abstract
that
we,
in the economy of the USSR,
can currently
mutatis
mutandis,
observe
insofar
from
that
the standpoint
as we study
economy
of economic
13
in
the system
equilibrium
as a whole.

We have

now finished

ysis

of

concrete

with

the

that

seems fairly

capitalism,

petty-commodity

development

tion.

This

farming;
of

is

towards
the

and this
means of

department

growth

of

latter

an adequate

tendency

ousting

of

in

necessitates

turn

to

of

raw materials.
to

capitalist

the

permit
arise

so far

of

a picture

means of

with

by cap-

to

ensure

the

fundamental

composition
the

of

all

absorb

We have,

production.

as we

analysis,

a value

petty
the

material

capitalist

strictly

consump-

of

this

addition,

sector

capi-

for

a market
and to

the

meticu-

of

expansion

provide

that

peasant

within

the

In

what

agriculture

sector,

extent

the

at

course

petty-commodity

base

been dealing

The natural

over-production

the

that

have emphasized

the

of

disproportionalities
all,

end we arrive
we can see with

it.

anal-

interacting

constantly

the

II

does not

of production

In

production--both

be modified

will

a capitalism

constructed

signifies

production

of

Preobrazhensky's

of

unspectacular--although

talist

italist

reconstruction

economy.

Preobrazhensky

lousness

after

our

many times.

Conclusion

Before
duction
focus

lished

in
of

we move on to
the

our

economy

study--a

the

Soviet

few comments

Union
are

in

under

expanded

of

analysis

NEP--which

is

we have

order

on what

in

VKA 17 solely

reprothe

main

estab-

so far.
Preobrazhesnky

mise

of

Preobrazhensky's

that

of values

equilibrium
between

conducted
conditions
departments

his

analysis
be
can/satisfied

and between

on the
sectors

in

on the

basis
the

of

correct

pre-

exchange
pro-

-204He goes

portions.

to

analyze

have all

less

more or

that

tent

Preobrazhensky

from

gin

the

of

to

worked

out
the

general,

systematically

the

concrete

structures

of

capitalist

allow

the

to

partially

flicts.

In doing

this

example,

the

that

essential

particular

crete,
ify

them or

are

modern

of

composition

from

strictly

We said

the

note

capitalism

in

tal

the

understand

which
then

the

Soviet
that

of

studying

It
this

economy

economy,

can we ask the

of

our

Soviet

quality

we can first
all

most

important

of

its

of

define

question,

In

this

not
of

the

only
be-

better
can
we
We can only
analysis

tendencies

was deviating.

why these

an

developmen-

Preobrazhensky's
pure

main

regard

capitalism

so that

con-

establish

is

inherited.

contradictions,

although

our

describes

the

arise

important

capitalism,

are,

material

that,

we know what

that

capital

that

was to

con-

How, for

the

discussion

Russian

Bolsheviks

the

with

of

economy,

capitalism

pathbreaking
if

circulation.

specifically

important

legacy

immanent

analyzing

Preobrazhensky

particular

economic
the

is

the

mod-

factors:

as VKA 17 was concerned,

but

and exchange

transfers

contemporary

the

must becon-

its

of

ex-

how the

VKA 17 and VKA 18 are

both

the

production.

and disproportions

part

the capitalism

general,

of

this

to

and study

of

involve

capitalism

production

effect

process

theory

for

Revolution.

appreciate

of the

in

as far

that

the
of

Marxist

least

tendencies

fully

outset

framework

we should

fore

in

modern

affect

and exchange;

argument
the

the

system;

production

at

at

analytical

the

petty

complicating

helps

system

breakdowns

to

interest,

credit

least

at

ameliorate

we can introduce

to

Preobrazhensky's
tributions

system

inherent
they

contradictions

of

say more

patterns

detailed,

Preobrazhensky

tendencies

we should

undermined

economy

a necessary

as soon as we be-

certain

historically,

has

is

this

be modified
is
This/a
question

been resolved

capitalism

Thus any analysis

in

us that

caution

have

economy.

development

in capitalist

to

pains

and will

a concrete

Although

about.

great

assumption,

simplifying
gin

to

deviations

from
Only
take

-205and how they

place

can be overcome.

Furthermore,
analysis

of expanded

of

to

during

infrastructure
brings

which

Preobrazhensky

There

he points

from

of production

the

detailed

built

argument
this
of

briefly.

subject
captialist

italist

in one department

advanced

out

credit

of
of

system,

accumulate

geois

banking

system.

commodities

it

it

pays

hicle

for

the

of proportionality

In

is,

the

the

of

it

class

capitalist
require

it,

via

from
its

least

ensuing

a key
the

as best

these

P would
in

deposit
would

would
according
as the

its

of

sales.

domination

capital

source

pre-cap-

purchase

the

both

P and utilize

this

to

return

resources

subsequent

would

the

in

from

values

an over-production

the

then

cap-

Preobrazhensky

that

would

of

elements

rearranging

we should

has been

out

VKA 17.
of

of

accumulation

any

society's

system--at

light

exchange,

of

of

notes

By definition,

expansion.

of

or

the

close

alienation

capitalism

making

to

returns

redistribution

industrial

transfer

schemes,

when there

or

the
the

the
In

sector.

which

desire

might

nature
3) and

non-equivalent

The New Economics

for

reserves,

That

complex

the

as a means of

another

production

without

which

further

of
at

reproduction

money holdings,

out--and

system--for

petty

composi-

in Chapter
of

for

even those

the

destruction

has been monetary

monetary

thus

the

state

In many cases,

sector.

The schemes

material

above

In VKA 17 Preobrazhensky

expansion

commodities

to

the

up around

out

question

mechanisms

by the

the

sector,

considered

sector.
of

each

on briefly

touched

one sector

sector

the

he had not

series

for

allow

in

than

the

which

war.
to

capitalist

a whole

the private

civil

finally,

that

out

to

by the

about

only

and developed.

we drew

outlines

the

us,

have

will

brought

ways in

particular

be much more complex

each department

basic

the disproportions

within

concretized

will

in

(whose

of exchange

ital

be further

They

production

This

show the

reproduction

capitalism.

concrete
tion

have

will

deviations

such

over

bour-

obtain

the

money

the

credit

become a veto

the

needs

spontaneous

-206-

For

Soviet

the

had always

is

This

turn

through

critical

importance

control

over

the

between

means of

which

plays

state

could

transfer

To the

extent

that

the

regularities--and

is

them by drawing

need

Second,
is

sectors
without

petty

sales"
to

production

economy of

USSR dis-

the

disproportions--detailed

basic

the

into

production

petty

from

state

subsequent

exchange

and its

affairs.

"purchases

the

values
the

accumulation.

and non-socialist

out

carrying

state

VKA 17, non-equivalent

ing

the

the

within

Gosbank

of

the

Preobra-

all,

socialist

financial

country's

of

accumulation

primitive

from

values
First

monetary

the

the

the

such

accented

primary

state

that

alienating

important.

especially

argued

exchange

industry.

means of

allow.

for

non-equivalent
the

this

would

be a vehicle

to have total

itself

is

would

economy

peasant

capitalism

economy

sector

petty-commodity
zhensky

of

production

and anarchic

for

precondition

exchange

in

the

with

overcomstate

sec-

tor.
his

Throughout
tifiable
that

assumption
of

it

capitalist

was P which

This

process
both

which
into

the

instance
peasant

age of

is

true,

the

Soviet
tion,

that

petty-commodity

sector

was subordinate

in

reproduction

to

the

imbalances
was the

imperialism.

to

the

that

as under

the

state

body

whose outcome

but

is

of

Preobrazhensky's

economy

develop

becomes
depends

USSR this

cannot

of
not

on the

petty

just

only

production

an economic

conscious

vice

versa.

well

is

but

a specific

not

his-

already

If

contingent.
work

except
to
but

intervention

the

of

subordination
is

given,

schemes

and continued

exchange

not

capitalism,

subordination
this

the
is

sector

state

entire

in

to

accumulation

primitive

so well,

Non-equivalent

fact

general

of

period

the

K, and not

within

describe

and Preobrazhensky

progressive
industry,

As a result,

subordination

and the
that

the

production.

achieved,

conclusion,
of

the

economy

torically
it

Marx

of

analysis

made the

adapted
of

jus-

historically

Preobrazhensky

this

points

to

on the

basis

the

needs

a political
of

the

of
quesSoviet

14

-207is

What

state.

survival

continued
it

more,

a necessary

USSR and the

the

of

is

this

although

construction

is

not

sufficient.

Preobrazhensky's

nomy, with

its

regularities

and,

ety,

inexorable

to the

isolation,

ist

West,

italist
modified,

in

the

the Soviet
if

the

conditions

Union

be properly

in

capital;

and circulating

must

the

of

fact

that

itatively
the

sion
the

different

than
will

of reproduction
alist
tionality

economy,
the

and a chronic

first

these

eco-

points

Union's

countries

socialthe

of

cap-

may be

contradictions

among them
the

periods

was able

accumulation

reproduction

on the

one hand,

and the

Soviet

Union

goods

famine,

theory

of

extensively

of

could

achieve

on the
expanded
with

other.

in

given
So,

reproducfixed

reproduction,

given

and represent

qual-

determine
far

in

the

conclubetween
elements

material

commodity-soci-

and degree

of

proporbase

industrial
weak

its

before

passing

on to

reproduction

in

the

Soviet

the

of

the

accumulation

question

both

greater

important

a mixed

expansion

to

which

contradiction

and circulation

expanded

the
in

Our most

an unresolvable

and

is

period
of

equilibrium

do.

a number

be answered

must

we will

production,

Soviet

capitalism

proportions

turnover

to

are

that

expanded

of

There

this

during

dictates

of

which

is

the

study

concrete

during

directly

USSR" (VKA 22),

the

of

but

Union

means of

existed

of

upon

Soviet

different

VKA 17 leads

concrete

both

by analyzing

of

in

mid-twenties.

under

deal

Soviet

advanced

the

touch

be reproduced

there

of

the

not

and material

Preobrazhensky's
we will

for

Preobrazhensky

conditions

to

Paramount

kinds

be that

the

soci-

Soviet

the

of

contradictions,

System

the

analysis

the

of

have

they

quantitative

detail

his

understood.

fixed

tion

it

of

he did

that
impasse

economic

in

he applied

implicit

of questions

a socialist

its

forward

put

Equilibrium

later,

economy under

the

Otherwise

place.

Preobrazhensky

"Economic

a year

where,

all,

the

resolved.

never

The argument
to that

in

of

analysis

an end to

revolution

take

must

but

that

conclusion
through

above

for

condition

economy
of

-208fixed

capital

study

of

expanded

ism and in
zhensky's

under

pure

reproduction

Soviet

the

own theory

Union
of

for

capitalism;

the

fixed

of
must

build--a

goods

famine

it

is

capital
study
is

upon

the

under
without

provocative

latter

that

the

concrete

capital-

which

Preobra-

but

incomplete.

NOTES TO CHAPTER 5
1.

be a realistic
This would certainly
for Russian capitalassumption
ism prior
to the Revolution,
in this
which,
as we will
note later
is the particular
Preobrazhensky
is describing
chapter,
capitalism
fact
helps
that
between
the
the arguments
strengthen
continuity
--a
in VKA 17 and VKA 22.

2.

VKA 17,

3.

For the method of calculating

Ibid,
p. 67.
accumulation
allowing
for a growth
in the organic
composition
of capital,
see Ch. 4, pp.
in his examples through173-76,
We should
above.
also note that
I
takes the exchange fund of department
out VKA 17 Preobrazhensky
as equal to the variable
capital
after
accumulation
plus the conThis is clearly
sumed part of surplus
value.
a lower sum than if
has already
the year's
taken
after
we took I(v+s/x)
production
it is true that
in II must find
Although
the capitalists
place.
in the martheir
additional
means of production
available
already
ket at the start
that
a part
of the year,
show in Part III
we will
by department
I durof these means of production
are only produced
ign the production
is carried
out on the basis of accumuyear that
lation
beginning--that
is,
they are embodied in the
at the year's
is produced
by the accumulated
capvariable
new surplus
value that
ital.
As a result,
Preobrazhensky
the deficits
measures in his
had
examples are somewhat lower than those he would have obtained
he carried
through
to the end of the year and then calproduction
This does not change
I.
the exchange fund of department
culated
the argument,
tendencies
at work over time,
as he is describing
figures.
If the sums involved
enough
and not absolute
are large
into
that deficits
of means of prosurpluses
would be transformed
duction,
in
disappear
these surpluses
the course of one or
would
further
two year's
conditions.
production
under the same prevailing

4.

There

S.

65-66,70.

is an error
in the figures
reads 655 - 483 = 173, instead

If

we did

PI.
PII.
6.

pp.

this

P would

in
of

(VKA 17, p. 68), which

the text
655 - 481 = 174, which is correct.

be:

1500c + 1500 consumption

969c + 1938 consumption

fund
fund

3000
=
= 2907

We can calculate
by using
this
rearrangement
If x=
total
in PI, and y=
total
production
then-.
5907
x+y=
1/2x + 1/3y = 655
This

gives

production

in

P as:

Total

= 5907

simultaneous
production

equations.
in PII,

-209PI.
PII.

1574.4c
919.4c

Here production
655 available
7.

+ 1574.4
+ 1838.8

consumption
consumption

fund
fund

P has remained
within
for exchange with K.

= 3148.8
= 2858.2
the

same,

Total

while

= 5907
PI now has

Preobrazhensky
VKA 17, p. 69.
makes the somewhat obscure
comment
demonstrates
because this
that
that,
total
result
social
producdeclines,
it disproves
tion
Rosa
can grow while
petty
production
Luxemburg's
in capitalist
theory
of the role
of petty
production
development.
It seems to us that
is simply
this
wrong,
and does
differences
between the two thinkers.
the real
much to obscure
In the first
Luxemburg was well
place,
aware of the inadequacy
of
if,
Marx's
that
schemes and of the fact
given the lower organic
in department
for equal
II,
of capital
composition
you allowed
in departof accumulation
rates
of surplus
value,
over-production
in the organic
Likewise
ment II would result.
with the rise
comLuxemburg notes that
to be consistent
position
of capital:
with
it to rise,
Marx's
analysis
we must allow
and then over-production
itself.
in II would again manifest
And, like
Preobrazhensky,
she
in
that this
concluded
could only be resolved--and
was resolved
from department
life--by
II to departthe transfer
real
of capital
It was here that
that
the limits
ment I.
she emphasized
of Marx's
that
schemes--which
stressed
commodities
must exchange in rather
form--would
the dictates
precise
material
of
seem to contradict
development
The transfer
took place.
capitalist
of
as it really
takes place.
capital
would seem to be impossible,
yet it constantly
for Luxemburg was not the main contradiction
Nevertheless,
this
inin the apparent
the schemes; for her the latter
within
resided
for the accumulation
and act
ability
of money to keep pace with,
force
for the accumulation
This,
as the motive
of commodities.
her
led
just
have
mentioned
along with the other
contradictions
we
to conclude
that
system,
as a closed
capitalism
could not develop
but must do so in perpetual
inter-relation
producwith the petty
it would appear that
Here, too,
tion
sectors
of the world
economy.
in the case we are dealing
were
with here she and Preobrazhensky
increasEven while
will
saying much the same thing:
capitalism
ingly
the
encroach
upon the pre-capitalist
economy, it requires
into
latter
that enters
to increase
the share of its production
in Preobrazhensky's
This is true
current
exchange with capitalism.
in K (which is growing)
example,
where P must make up the deficit
by rearranging
its production
the share availso as to increase
able for exchange with the capitalist
sector.
Preobrazhensky's
is
difference
Luxemburg
more profound,
real
with
Prefor it calls
into
her
question
method of exposition.
entire
between the capitalist
and
obrazhensky
the inter-relation
analyzed
historical
from
the
by
pre-capitalist
modes of production
starting
genesis
of the problem,
where the two systems of economy constantly
interact,
through
the other
precisely
and where one subordinates
in
this
this
interconnection.
way
Preobrazhensky
process
can
of
show how capitalism's
subordination
exchange with,
and eventual
disproportions
its
of the pre-capitalist
some of
economy ameliorates
it
hand,
and heightens
Luxemburg,
posits,
others.
on the other
despite
seems to us, an abstract
"pure"
which,
capitalism
model of
her protests
the
of
hence
nature
about the formal,
conditional
and
in
the
them
treats
schemes, fails
to transcend
in
the
them and
end

-210almost
naturalistic
manner we have argued against
rigid,
throughAs a result,
Luxemburg's
is too static
study.
analysis
out this
infer
to actually
conclusions
of the dynamic character
she wants.
Because she deals
only with a closed
capitalist
system and an equally closed
production
system of petty
she sees little
more than a
between them--something
inevitably
that
relationship
reciprocal
Capitalism
leads towards
theory:
a breakdown
will
eventually
use
buffer,
bourgeois
In
and then cataclysm
must result.
up its petty
(pp. 14-15,77)
Preobrazhensky
Zakat Kapitalizma
again criticized
in capitalist
Luxemburg's
theory
of the role
of petty
production
it seems to us, in a manner that was
but this
development,
time,
The significance
of the petty
producer
much more to the point.
for capitalist
does not lie
in its
production
as a market
sector
(which
is relatively
but in the fact
that
size
small),
absolute
both
this
a crucual
capitalism
margin of elasticity,
sector
gives
it requires
for expanded
it with commodities
in terms of supplying
This elasproducts.
and as a market for capitalist
reproduction
to smooth out and overcome a number of
ticity
permits
capitalism
dimensions
if it were
disproportions
that
would acquire
critical
indeed a closed
system.
in Part
Luxemburg
IV,
We will
that
to assume
was wrong
show,
also
lead
to
the reproduction
that
reflect--and
schemes
cannot
cannot
composition
of the socof--the
problem
of the material
a solution
debetween
dealing
ial
the
transfer
of
capital
with
product
when
For her discussion
of the inherent
sectors.
partments
and between
Marx's
of Capschemes
see The Accumulation
contradictions
within
336-46.
Ch. XXV, especially
ital,
pp.

8.

VKA 17,

9.

Ibid,
p.
italist
in
tion

p.

70.

in the cap71.
Preobrazhensky
takes expanded reproduction
he
but
before,
be
the
to
expands producnow
same
as
sector
P by 2%. We then have the following:

KI.
KII.

2204c
1353c

+ 546v
+ 447v

+ 250 consumption
+ 200 consumption

Pl.
PII.

1530c
1071c

+ 1530 consumption
+ 2142 consumption

fund
fund

fund
fund

is
is
98,
a
KII's
which
overall
shortage
of means of production
A re(then it was 116).
in P fell
bit
less than when production
is
forces
whether
necessary,
arrangement
productive
of society's
both
togethit takes place
P,
sectors
within
or
exclusively
within
in
P
the
if
We get the same result
rise
of
all
er.
we allow
even
6273,
to
in
P
up
Then total
goes
to accrue to PI.
still
production
but PH remains
constant,
at 3150.
PI.
PH.
PI then
a deficit

1561.5c
1050c
has

We should
lation
in
The value
hence the

+ 1561.5 consumption
2100 consumption
+

511.5 available
of 45.5.

for

fund
fund
exchange

with

K, which

still

leaves

is
2%
accumuby
this
not
P
also note that
when we expand
it
the strict
under capitalism.
that
of
sense
we speak
and
law
by
value,
of
labor
the
is
of
power
not regulated
for
propetty
has
category
no meaning
of surplus
value

-211duction.
of its

We cannot,
P accumulates
then,
say that
a certain
portion
surplus
It has a survalue,
or even its
surplus
product.
fund,
over and above the necessary
plus product
but this
consumption
future
can go to augment either
production
or present
consumption
in any number of percentage
divisions.
This no doubt explains
why
Preobrazhensky
in P in percentage
sets growth
terms,
for
not just
but for each of the categories,
total
production,
e. g., the confund.
As a result
PIIc grows by
capital
and the consumption
stant
2%, since at the present
level
is indepenthis
of analysis
growth
dent of the mass of "variable
in PII,
capital"
and depends only on
This also explains
the total
product
of the department.
why when
P expands and when the "organic
is lower
composition
of capital"
in PH than in PI, we do not get over-production
in PII.
10.

Even in the Soviet

economy of the period
of primitive
socialist
accumulation,
where the organic
composition
of capital
was higher
in the department
(deof state
production
of means of consumption
II),
backwardness
this
partment
of Russia's
was a legacy
and the
destruction
base.
The whole tendency
of her industrial
of develSee below,
this
Ch. 10.
opment was towards
reversing
relationship.

11.

VKA 17,

12.

Ibid,

13.

Emphasis added.
In "Ekonomicheskie
Zametki
Ibid,
III"
pp. 74-5.
Preobrazhensky
detailed
in
a series
of conditions
of equilibrium
in great
the Soviet
those he discussed
system which closely
parallel
detail
in VKA 22.
He noted that
the growth of constant
capital
if department
can only keep pace with that
of means of consumption
I of the state
faster
II,
than department
sector
grows relatively
is the result
higher
this
and that
of
of its
organic
composition
He then poses the rhetorical
that
to the effect
capital.
question
be obvious
this
to every serious
should
ecoof the Soviet
student
frankly
Quite
this
nomy.
given the
peculiar,
a little
we find
rather
original
and sophisticated
analysis
with which PreobrazhenZain VKA 17.
See "Ekonomicheskie
this
sky derived
relationship
III, " op cit,
metki
pp. 78-9.

14.

See From NEP To Socialism,

and
reference,
specific
pp. 56-7 for this
for Preobrazhensky's
Lectures
Six and Nine (chapters
two and five)
interesting
discussion
quite
could use the credit
of how the state
in
influence
development
to
the
and banking
of agriculture
system
desired
directions.
particular,

p.

pp.

73-74.

74.

-212PART III
THE EXPANDED REPRODUCTION OF FIXED CAPITAL
CHAPTER
RESERVES

We have

reached
We have,

the material

composition
Further,

in

takes

producers,

confining

analysis.

We now must

in

place

the

analysis

up to

bases of

reproduction

as an economy

creating

more

analysis

of

ibrium
basis
ial
they

to
that

surplus

concrete

of

their

needs
require

capitalists
So far

of

each department,
and the

various

must

both
types

in
of

of

the

also

means of

the

our

of

purpose

our

that

means of

equil-

on the
mater-

particular

consumption

of

exists,

complicate

the

ex-

material

commodities

of

of

the

assumption

satisfy

terms

under
tracks

the

to

value

society's

really

for

have

exchange

of

analysis
as it

re-

bourgeois

reproduced

value

we will

expanded

and discover

try

both

economy

simple

production
consumed

by

and workers.
as we know,

or has undertaken

this

Fortunately,

however,

made a first

step

schemes to

by the

Exchange

values.

our

by abandoning

simply

of

a purely

modify

to

surplus

Second,

to

components
are

have

capitalist

capitalism

can be satisfied

instance

various

that

and petty

We must

apply

accumulates

value.

latter

we will

we must
the

capitalist

proportions

material

First,

now.

the

laws

upon the

condition.
of

this

of

some

constraints

means by which

the

the

this

values

For

panded reproduction.

i. e.,

drop

their

capital,

productive

in

the

examined

studied

we must break

where

places

an economy

ourselves

to

addition

analysis

production

we have

production

how,

our

REPRODUCTION

one hand,

on the
of

EXPANDED

in

a point

new ground.

reproduction.

UNDER

allow

in
for

neither
further

Preobrazhensky

this
the

direction,
fact

of

concretization

Preobrazhensky,

that

in

his

anyone

nor

book

the

fixed

capital

is

undertook

reproduction

schemes.

Kapitalizma,

Zakat

when he modified

else

the
not

reproduction

replaced

in

-213but

year,

single
dealt

this

with

from

what

in
schemes

his

tend

world

analysis

question

logic

his

to

either

Kapitalizma

Zakat
that

of

its

2.

con-

he was fol-

that

reproduction

and so did
to

or

Pre-

he was trying

period,

economy

Chapter

the

of

already

a different

aware

in

we take

once

in

capital

studies

Soviet

the

in

reproduction

he was well

crisis

We have

years.

previous

and 22,1

capitalist

of

fixed

of

Although
of

reproduction

of expanded

a series
simple

under

do.

we will

VKA 17,18,

the

explain

up this

immanent

the

lowing

over

amortized

phenomenon

took

obrazhensky
text

is

material

the

to

not

ex-

regularities
into

composition

account.
In this

and the

basic

sky's

we make the

schemes

in

further

concretization

in one year,
fixed

and

of

gested.

in

We will

of
had

VKA 17,

the

namely

department
of

the

consumption

to

those

Part

by

showing

clude
led

"pure

capitalism.

famine

in

sis

fixed

of

III

the

Soviet
capital

italism

of

capitalist

economy

of

the

In

the

Soviet

present

out

which

"

in

Union

chapter

means

to

petty

IV,

Part
have
see

how

producers

during

we will

this

takes

cause

applies
and

the

solve

an

recurring.
in

the

the

to

means
con-

so-cal-

under

to

return
to

II

We will

we analyze
to

sug-

produce

place

II

he

problem

that

we

Volume

department

from

when

it

and

production.

of

a transfer

to

adequate

solving

production

social

we will

order

and

such
in

Later,

Union,

of

in

the

there

solutions

chronic

capital

of

replaced

From

what

not

is

for

method

produce

how

is
that

transfer

branches

and

solution

the

not

primarily

problem,

as soon as

of both

capital.

value,

capital

systematic

form

I,

surplus

is

capital

constant

Preobrazhen-

show that,

under-accumulation

same

Marx's

constant

worked

its

this
of

that

see

Preobrazhensky

fixed

from

start

and will

that

of

treated

Theories

under-accumulation

we will

Kapitalizma

portions

how Marx
and

chapters

has a systematic

circulating

Capital

Zakat

capitalism

discuss

will

three

next

goods

this

analycap-

concrete

commodity-socialist

NEP.

begin

by taking

another

look

at

ex-

-214from

panded reproduction
and we will

see that

the process

of

serves,
sites.

We will
of

allowing

the

I.

accumulation

Let
that

us start

Here s/x

We note

that

the

one)

in

both

departments,

will

be maintained

ment I will
stant

capital.

within

the

500s(a)
set

this

already

means of
tion
for

of

187.5s(a)
partment

400 of
These

for
I,

that

to

these

its

indispensable

the

of

in

role

to

similar

of

100 exist

I will

capital,

therefore

exist

their

to

and I(v+s/x)

IIc

either

to

in

to

the

I's

the

department

wrong

hire

the

to

the

will

must

exchange

natural

form.

those

wages of
of

labor.

their
and,

personal

them with
II

its

more workers

commodity-capital

exchange

form

100 of

intensity

for

con-

material

other

raise

Depart-

additional

correct
the

or

and it

capital;
in

of

for

fund

unsuitable

Likewise,

new constant

same (four

the

as follows:

take

motion

physically

consumption.

capitalist
accumulation.

between

proceed

in

exist

as part

I must

is

capital

should

an increase

support

for

towards

goes

= 8250

reproduction.

into

capital

they

that

Total

goes

proportionality

400 already

are

that

500 accumulation

variable

workers.

since

prerequi-

treatment

reproduction

value

part

Department

production,

means of

material

re-

capital.

expanded

scheme accumulation

new constant

the

commodity

Reproduction

surplus

expanded

additional

As we know,

analysis;

reproduction,

of

specific

fixed

of

so that

with

employed

quite

composition

department.

for

of

equals

organic

take

existence

and their

Expanded

portion

and s(a)

this

simple

+ 500s/x
+ 500s(a)
= 6000
+ 187.5s/x
+ 187.5s(a)
= 2250

consumption,

With

value

and Preobrazhensky.

the

equals

a simple

up Preobrazhensky's

a scheme for

+ 1000v
+ 375v

4000c
1500c

I.
II.

the

capitalism

of

with

by Marx

used

by taking

of

we move from

has

accumulation

Bases

The Material

view

once

itself

under

ongoing

of

presupposes

conclude

reserves

point

here,

even

accumulation

while

function

the

as

consump-

department

II

150 of

its

take
these
This

with
leaves

de-

-215-

its

increase

to

37.5

II's

The arrangement

own product.
the

of

ning

next

production

immediately

Now, we notice

to

means of

production

requires

new constant

in means of
deficit

towards

half

their

Thus it

is

changes

are

50 are

laborers
course

in

resents

that

they

month,
start

to

appear

end of

which

an aliquot

part,

on the
II

the

department

I are

This

difficulty

their

the

in

market
not

arises

Even if
is

a more

or

It

not

will
last

and ready
from

the

for

I would

put

would

all

ex-

a real

it

which

can offer
The

year.

The new

produced.
products

during

in

to

value

consume

part

them,

of

production

rep-

and in
the
and

short,
flow,

the

100,

we assume that

needs

be:

= 9075

creates

steady

have all

means of

a sur-

Total

relatively

less

them when it

when the

finished

equal

have

year.

year,

out

when

created

production

are

capitalists

production

year,

and after

in

production.

means of

will

production

as they

constantly

these

of

the

of

start

gradually,

which

= 6600
= 2475

production

50

to make up this

product

however,

turning

extending

time

the

of

the

at

of

have

social

This,

I are

product

department
of

the

year,

a surplus

production

at

department

devote

part

II

a deficit

production

production,

means of

latter

department

550s(a)
+
+ 206.25s(a)

= IIc.

the

order

would

in

year's

100 in

only

the

Then the

the

is

In

economy.

capitalists

I(v+s/x)

available

the

of

begin-

the

100 additional
while

There

I had purchased
the

I has

II,

the end of

until

end of

department

to

the

550s/x
+
+ 206.25s/x

that

made,

150.

to

consumption.

the

at

wait

which

+ 1100v
+ 412.5v

only

immediately
other

of

Department

problem.

to

I has only

department

equal

throughout

personal

4400c
1650c

I.
II.

for

capital

from

natura

thus:

with

department

power

product,

in

obtains

social

department

that

capital

have

we would

plus

is

exchange

production

the new labor

the

of

year

it

which

500s/x
+ 1100v +
+ 412. Sv + 187.5s/x

4400c
1650c

I.
II.

capital,

variable

say,
i. e.,

them until
produced

every
at

the

right
by

sale.

different

material

needs

of

depart-

-216II
I
and
ments

departments

separate

I requires

ment

sents

past,

exist

as the

other

hand,

labor.

products

of

year,

value,
tal-value

at

the

to department
resent
the

II

surplus

into

set

or currently
ity
of

for

ready
the

year.

of

the
It

newly

revenue,

beginning

end and whose

the

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-217in

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-218-

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-219will

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-220that

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the

of

at

in

the

that

where

1926-

time.?

Preobrazhen-

to make in
cite

us

Marx's

any one of

-224them, but

the

perhaps

most

is

concise

following:

the

As a consequence
of the incompleteness
of his work, Marx's
theory
and of reproduction
must be developed
of crises
and elaborated
as
the analysis
to the conditions
approximating
regards
of real
capFirst
italism.
this
of all,
approximation
must denote the estabfeatures
lishment
of the characteristic
of the reproduction
procapitalism
cess in the epoch of classical
and in the epoch of monfurther
A
concretization
must consist
opoly.
the
of elucidating
fixed
of
capital,
of reserves
problem
of fixed
and circulating
in bringchanges in the organic
composition
capital,
of capital,
ing the periphery
into
of petty,
the inpre-capitalist
production
of changes in the conditions
vestigation,
under which labor
power
The premise
is sold,
investigation
the
etc.
of
must be world,
The investigation
from an
and not national
economy.
must proceed
development
of the working
account
of the law of uneven capitalist
decay.
From there
it is
of uneven capitalist
and, consequently,
to elaborate
necessary
not only a theory
of simple
and expanded
but also a theory
of declining
reproduction,
reproduction,
which
in countries
in ecothe conditions
must elucidate
of reproduction
The investigation
from the deformanomic decline.
must proceed
tion of the law of value,
tenof the intertwining
of monopolist
dencies
with those of free competition,
and must trace
out the influence
of these important
changes on the general
conditions
of
in the epoch of imperialism.
expanded reproduction
and of crises
from the silent
The investigation
cannot proceed
premise
of capifor
internal
talism's
tendencies
towards
and its ability
expansion
but must analyze
that expansion,
the causes of the progressive
down of economic development,
thus inevitably
slowing
abandoning
Finally,
the region
the investigation
of pure economic analysis.
that
the existence
must trace
out the influence
of the USSR exerts
8
on the process
of capitalist
reproduction.
Of this

list,

the

and incorporated

about
problem
of the

of

fixed

concrete

had already
thermore,
it

This

only

we must

one that

Preobrazhensky

into

work

and circulating
analysis

of

anticipated
in

his

our

or

nearly

all

of

extensiviely

the
these

starts

Department

I:

10,000 stock of fixed

4000(1000f
+ 3000c)c

Department

II:

3750 stock of fixed

1500(375f
+ 1125c)c

Production

in

scheme shows

I=
the

6000;
following:

with

this

in

the

aspect

other

he

passage

Fur-

1920's.
to

see that

the

solve

concretizations.

Preobrazhensky

off

is

another,

in

we will

problem

written

already

every

he proposes

with

of

or

Virtually

capitalism

own analysis

retain

one fashion

in

capital.

dealt

had not

the

production

following
capital
+ 1000v
capital
+ 375v
in

Department

II

scheme:
(2000 in reserve)
+ 500s(a)
+ 500s/x
(750 in reserve)
+ 187.5s(a)
+ 187.5s/x

2250;
=

total

I has a supply

8250
=
of

fixed

-225-

capital

the

stock,

We have

each year.

[or,

In exactly
of 3750,

of

cent

per

fixed
II's

year.

So far

and two-thirds

that

of

smoothly

much is

identical

this
thing

department

between
in

of both

departments

rate

depreciation

the total
both

stock
In

cases.

of the

constant

are equal
circulating

in

Chapter
is

of

fixed

terms

of

their

in

values

constant

capital

being

10 per

already

two departments
I is

same organic

the

regard:

the

of

the

the

Nor

would
This

is

to

there

anyin

capital
This,

each
too,

structure

They have

the

same

10: 3 in

is

parts

and circulating
product,

annual
used

one.

fixed
up

Therefore,

we

between

proportion

capital

fixed

of

section

technical

and the

of

ratio

three

first

two
com-

reproduction

the

constant

show up in

two departments,

the

de-

of

I,

not

the

constant

more,

capital,

the

supply

1125.

components.

this

circulating

that

the

of

What is

to

capital

department

new.

and circulating

fixed

circula-

The rate

in

in

nothing

breakdown

identical

of

capital
the

involve

2.

by c(c)].

expanded

scheme we presented

the

the

c [or

we have

have

by the

any disproportionalities.

revealing

fixed

its

so that

whose

equals

production

one),

mechanics
about

have seen before

of

to

capital

of

and between

They

product

department

capital

scheme that

II.

annual

value

reserve.

same as in

year.

product

has a fixed
in

in

department

the

to

this

Total

and without

exceptional

subscript,

held

proportions

(four

Its

chapter.

in

before.

of

capital

proceed

and the

II

the

the

annual

and this--by

fixed

the

Of this

10% per

3000,

in

the

of

constant

nothing

are ones we have used

is

is

capital

The overall

encountered.

position

(20%)

circulating
is

there

that

by the

capital

is

of

by c(f)],

one fifth

on its

preciation

into

and tear

is

stock

portion

same way department

the

which

total

reproduced

the

fund.

a reserve

capital

capital--is

constant

is

constant

alternatively,

of

portion

the

of

designated

as wear

enters

subscript,
ting

circulating

2000

which

the

of

portion

of

the nature

of

depreciation

average

The circulating

value

10,000,

to

equal

these,

too,
to

capital
both

in

-226basic

the

of

terms

in terms

their

of

technical

scheme to

in this

in

of production

difference

capital

10 per

tear,

cent,

I,

fill

show, will

be different

ialism

and monopoly
where

the

free

part

of

Ic

fund

for

is

1000,
all

constant

be insignificant
s(a)
cal

circulating

IIc

fixed

If

(presuming

about

46.9,

all

This

an inordinately

nine

years,

society

this

of
fixed

Ic.
it

of

long
to

fund
not

would
is

what
went

is

to

new fixed

time,

increase

its

Ic,

in

stock

the

to
it

of

go to

techni-

125 would
increase
187.5,

IIc)

only

this

rate,

fixed

would
I,

the

only

vicinity

re-

Sup-

department

equals

At

this

1375.

given

to

s(a)

capital.

somewhere

that

departments

In

increasing

to

capital-

The fixed

capital,

II,

imper-

of

dent;
a
make
even

have

capi-

combined

of

both

augment

375 would

devoted

the

a total
in

at

epoch

notes

than

to

wants

classical

with

How

means of

looking

the

needed.

and circulating
other

in

or

making

In department

go towards

take

to

produces

two departments.

375,

and

Suppose

by 1500.

Preobrazhensky

the

wear

this.

we are

greater

means

a fixed

Preobrazhensky

first

accumulation

the

of
all

could

for

the

capital;

portion

which

of

is

is

that

whether

is

of

capital.

capital

department

in

comparison

between

proportions

represent

that

capital.
in

500.

equals

capital

of

fixed

for

capital

fixed

of

I and

value

one years

Dealing

fixed

total

that

with

dominates,

department

to

competition

capitalism.

1500 in

pose we devoted
increasing

free

of

competition

new demand for

placement

period

in

each contain

concerned

upon

nothing

and IIc

The answer,

depending

is

there

Ic

fixed

only

new demand?

this

during

the

and

the

of

orders

is

which

talism

ism,

its

4000c

represent

stocks
is

two departments

disproportionality.

of

the

equal

total

Preobrazhensky

department

production,

is

their

of

somehow increases

society

that

no longer

whose value

The problem

will

II

is

the

production,

sources

two departments.

the

component

of

any basic

department

in

between

values

proportions

suggest

The one crucial

the 1500c

of

exchange

of
capital

the

of

25%, or
it
eight

would
or

by the

-227-

required

the

of

premise

cause the

state

tion

the

gave

to

for

new orders

to

assumption

have

we will

fixed

capital

bases

a period

that
of

of

the

very
be-

arose

past

accumula-

believe

to

reason
They

production.

the

against

orders

continued

plans

goes

material

who made these

their

not,

"solution"

of

and the

market

capitalists

If

be filled.

type
These

the

of

production

other

this

problem.

were necessary
all

But

amount.

they

will

have

geared

these

orders

could

stagnation,

even a deep

or

crisis.
is

But there
does not

If

from

directly

each

tions.

If

we then

fund,

I(v+s/x),

in

capital

the

original

because
of

it

will

ments

constant
the

of

I's

product

its

the

bulk
ore

used

in

building

value

no

some
his

that

(in

the

form

ated

into

of

of

production

that

In

machines.

that

be made

up

intermediary

as

that

of

fixed

that

in

of

value

used

to

case

the

the

fixed

This

is

The

use

part

of

a raw

capital,

had

either

form

went

machinery,
the

of

he had

steel

entire

not

instru-

value

capitalist

of

value

greater

capitalist's

func-

circulat-

heavy

the

make

will

that

the

of

value

our

the

etc.,

makes

consist

exchange

various

products,

of

to

capital.
the

por-

will

it.

create

constant

good)
This

serve

as
to

used

had

circulating

production
ratio

might

capitalist

will

of

capitalist

product

commodity-product.

machines

means

intermediate

his

that

I's

the

upon

a particular

an

department

same

I's

of

If

would

of

of

almost

constant

form

the
was

down the
and

The

that

we took

fixed

means

is

depart-

of

which

we broke
its

375

products

scheme,

to

capital.

product

other

machines

of

1125

materials,

value

the

consist

and

way depends

of

his

of

in

the

that

consist

the

of

original

material

composition

raw

iron

the

capital

production.
of

our

value

labor,

of

into

final

form

use

Preobrazhensky

that

problem

we see that

constant
the

the

according

capital

as circulating

ing

the

at

examine

fixed

as

we look

department

in

function

is

Preobrazhensky,

capital

to

aspect

and that

mention,

I and II.

ments

tion

another

of

the

material
incorpor-

output

will

for

other

-228in

capitalists

largest

Yet the

i. e.,

ials,

single

or
final

the

The reason
fixed

cause this

exists

is

It

Preobrazhensky

chose

lating

in

capital

of the means of
and which
sold

the

his

Is(a)

demands of

departments,

increase

go to

Ic.

capital

and three

for

the

100 that

for

means of

precise
tal,

fourths

of

for

subsistence

requirements

25% of

capital,
modity
against

this
this

supply

II,

increase

to

the

accumulation
would
of

means of

not

46.9

its

that

values

went

I(v+s/x)
they

are

capital.

the

to

this

part

400 would

consist

with

and

technical

from

500 Is(a),

it

circuvalues

Similarly,

of

fixed

in

order

department

would

have

i. e.,

25% fixed

to

of

fixed

increase

This

consumption
department

of

part

stock

natura.

in means of

production

use

II,

accumulated

fund

to

figures

to

II

meet the
capi-

10

capital,

social

be in

meet

have

de-

as 25% fixed

be exchanged

department

of

fixed

once

would

new workers,

constant

department

no net

I's

the

respective

materially

would

to

of

capital

the

be-

of

needs

of

capital.

Iv

is

capital

ratio

require

circulating

one quarter

productive

we accumulated

increase

to

of

commodity-product

this

one fourth

Of this,

went

technical

As for

If

If

and 75% circulating

sents

who each

val-

same as the

exist

Only

capital.

commodity-product.

the

capitalist's
also

the

technical

and circulating

must

show up in

an artifact

make up the

some individual

constant

of the

the

that

75% circulating
both

is

as fixed

fact,

this

that

Ic

own

form

the

rather

scheme,
of

value

production

into

and enter
Given

for

his

constant

meets
or

of

by comparison.

material

circulating

a coincidence,

that

value

II.

by raw mater-

added

insignificant

the

combination

function

will

in

department

The depreciation

prove

quarters

this

and only
II.

partment

I(v+s/x)
three

be that

will

wages and surplus

may well

in

capitalists

capital.

product

the

capital

constant
the

even

for

or

component

value

circulating

machinery,
ue of

same department

the

would
that

repre-

surplus

value

capital

whatsoever.

the

supply

only

of

fixed

represent

could

I had already

a com-

be exchanged
produced.

-229From this

possible

capital
the

are the

only

cess of

production

The best

could

46.9

in means of

take

on the

is

it

new workers

an increased

for

46.9

in additional

IIc(f)

time.

So long

as we assume

the new demand for

fixed

its

production

be on hand

Once we examine
departments
amount to
but

simply

only

help

the
to

125 in

I obtain

constant

output

fixed

ital

the

of
would

The only

and variable

will

produce
those

of

fixed
that

can go to

increase

and,

of

the
the

We only

this

it
take

its

to

IIs(a),
II

can
500

added
to

boost

I's
cap-

productive

is

obstacle
capital

this,

of

as well.
to

suppose

both

that

the

competition
that

enterprises
of

new construction
This

its

employ

free

Presuming

the

to

(including

new construction

capital
have

from

department

would

do not

capital

coming

if

both

of

believed.

latter).

following

circulating
Iv.

we first

and circulating

forth

call

capital

produce

fixed

it

time

fund

entire

fixed

need

would

meet

no new means of

in

accretions

can overcome

parts

eventually

it

of

slow

46.9

The 46.9

power

such
than

way society

constant
this

via

longer

reserves

I.

its

product

the

plus

The amount

capital

existing

Is(a)

this

present

to

order

surplus
to

and

future.

the

II.

the

of

motion

exchange

department

additions

department

capital.

with

form

new labor

the

be even

capital,

this

could

the

at

in

own constant

available

from

125 coming

capital

I devotes

exchange

in

could

that,

above)

in

Ic

department

material
the

we see that

its

to

the

for

fixed

pro-

"loan"

latter

capital

125

a future

to

the

II

These

no others.

were

additional

fixed

of

(as we did

increase

to

will

elements

capital,

of accumulation

II

department

that

in

I so that

of

Ic.

has produced

the

set

quantity

however,

no way,

simply

to

needs

increase

department

fixed

of

by devoting

functioning

of

department

to

supply

125 taken

the

Society

be if

would

the

I to

capable

capital.

consumption

produce

There

production

occur

is

department

of

as fixed

to

addition

only

conditions

fund

means of

that

thereby

these

under

accumulation

entire

the

that

we conclude

way all
these

of

reserves

Is(a)
do

-230-

not
if

see how essential

to

exist

Iv goes up by 500,

that

has not

Iv
500
al
only

acquire

tion

for

these

its

means of

IIc's

entire

be short

I will

surplus

in

consumption
fund

in

(we assume

this

addition-

Department

by exchanging

some 312.5

of

that

value).

accumulation

First,

problem.

same amount

i. e.,

out,

500 wage goods

500 newly-created

Department

carried

any

produced

extra

impediment.

first

I can

means of

produc-

IIc.

Here

is

equals

only

187.5.

means of

the

for

subsistence

workers.
The second

tions

historical

to

and 4500
We must

total

more than

department

I,

that

of

I's

of

fixed

to

15,000.

be if

the

4000 to

productivity

up to

If

productivity

one.

the

go up by at

to

does

the

6000 will

of

its

natural
Now,
fix-

of

ratio

and Ic(c)

Ic(f)

change,

not

lab-

of

50%.

least

to--that

not

is

(which

rises

or

The new Ic

however,

the
is,

Here,

capital.

assumed at

from

Ic,

we assume a crisis

capital

the

product,
capital.

too,
For

start.
I must

is

the

we are

1500

of

consist

Hence,

is

transferred

depreciated
bound

this

times
stock

by 500 does not

Ic(f)
that

capital

that,
must

Ic(f)
or
also

is

needed.

to

the

of

part

by the

500 additional

add ten

in

a rise

fixed
that

value

it

that

to

addition

is nothing

fixed

in

in

Ic(c).

remember,

the

represent

rise

any increase

economy,

would

propor-

unless

no reason

by 50%.

technical

unrealistic

have

we have

our

a 50% rise

presumed)

will

constant

each have

Ic(f)

Ic

assume--and

ed to circulating
will

leading

tendency),

we also

is

which

same (as we have

the

in

the

all

be true

not

would

immediately

or a period
or stays

fall,

If

forth

call

way this
to

were

more basic.
unchanged

necessarily

The only

labor

of

remain

of production

6000.

is

problem

Iv by 500 will

if

yet

the

solving
by the

rises

been

yet

to

are

I(v+s/x)

then

has not

production

they

to
5000,
rise

stock

of
we

composition
into

enter
to

of

product

a larger

technical

500

This

its

the

total

by 50%, from

value
stock
10,000

-231We started

out

from

an amount

equal

to

tal,

of

fixed

the

the

tates

previous

it.

produce

equipment
its

many times

capital

is

This

power

and circulating

their

fixed

capital

from

society,

equipment.

such

period

least,

at

1.15,000
fixed
capital:
6000(1500f
+ 4500c)c
equals

1500 to

2250.

circulating
in

a rise
of fixed
is

again

2250.
This

of

build

with

a one-way

will

Simply

this

plant

would
and

as part

themselves

need

to produce
of values

withdrawal

this

go to

will

capital

which

of

to

I necessi-

the

back

no new values

give

construction

IIc(f),
capital

to

new plant

can only

meet

+ 1500v

as in
grows

IIc

the

such demands

must

rise
562.5

I,

can only

same proportion,

the
and

department

this:

+ 750s(a)
by the
fixed

= 900012

same amount,

and 1687.5

capital
IIc.

throughout
if

from

Such

II Is stock

take

place

from

3750 to

5625,

which

Marx--is

that

soci-

13

impossible.
general

+ 750s/x

a 50% increase

department
in

like

look

down into
or

I mean for

department

I would

break

capital,

economically

in

Therefore

would

constant

Preobrazhensky's
ety

is

create

terms

real

new fixed

capital

will

which

and equipment

plant

that

In

this

requires

product.

capital

to

replaced

department

of

society

produce

an expansion

Hypothetically,

I(v+s/x)

fund

all

ll

What would
II?

from

This

a withdrawal

final

the

that

capital

that

capiof

totally

fixed

production

of

types

assumption

of

5000 fixed

constant

product.

entire

output

fixed

these

of

and is

impossible.

And this

labor

the

one year

of

eventually

product.

economy for

in

that

economically

would

annual

simplifying

replacement

huge resources

that

the

means of

construction

mean withdrawing

of

is

fixed

the

output

society's

those

1500 additional

initial

over

to

of

and whose value

add 500 to

total

turned

any addition

construction

the prior
it,

is

capital

time,

in that

its

for

need

Once we drop

production.

means of

society's

conclusion--following
for

rapid

expansion

of

its

industrial

-232base if

the

system

Unused

capital:

to

lation

these

meet its

original

for

new need

of

of

If

productive

14

power.

fixed

and sec-

and a surplus

we will

now be tapped

of

raw materials

labor

224,

stock

capital.

forms

all

consumption,

demand for

will

fixed

of

stocks

means of

its

of

that

reserves

reserves

scheme on p.

one fifth

held

department

of

increased

the

our

ample

and equipment,

supplies

satisfy

once more at

is

plant

products,

condary

It

possesses

If

we look

that

recall

popu-

each

capital

in

reserve.

by society

in

order

happens,

this

our

to

scheme will

be:

II.

3750 fixed
2250(562.5f

capital:
+ 1687.5c)c

department

of

that

Half

lying

society

capital

during

quantity
half
cannot
tion
would

of

department

of

fixed

capital

have

latter
been
have

year
not

I's

to

whole

I's
+ 250

+ 250 Iv(f)

has been satispart

of

the

and by further

Iv,

Ic

on the

of

1500 additional

re-

appropriate
fixed

"boom. "
the

II's

accumulation
supplies

reserves

most

fund,
of

II
or

that

increase

had to

additional

the

We note

problem.
also

demand for

commodity

of

aliquot

capital

increase

1500

equal

a substantial

order

capital

while

will

the

as means

natura

capital

fixed

augment

this

exhaust

500,

equalled

on hand

I to

of

in

exist

by devoting

Similarly,

satisfy

its

= 9000

= 3375

was 1000 Ic(f)

original

constant

departments.

materially
(the

does

circulating

both

must also

second

however,
of

in

the

its

will

Previously

capital

that

states

can fulfill

scale,

This,

= 2250.

fund

on reserves

+ 562.5s

as fixed

new demand for

the

of

that

functioning

fixed

Preobrazhensky

new accumulation

+ 562.5v

output

+ 375 Is(f)

represented

= 1500.

fied.

I's
for

suitable

+ 375 Iv(f)

+ 750s(a)

+ 750s/x

= 12,375

production

of production

Is(f)

+ 1500v

+ 4500c)c

The portion

product

capital:

6000(1500f

Total

Ic(f)

fixed

10,000

I.

of

fixed

by one
capital

means of
could

the

consump-

have provided

187.5).

raw materials

Thus society
and means of

-233-

consumption

of

sufficient

with

the

reserves

along

One source
"loan"

fixed

of

II

capital

constant

fixed

es of

needed

stocks

of

for

sale

tion.

In

short,

ent of

that

it

and these
just

constitutes
ment II

department

to

For

such

the

how monopoly

let

moment

er share
portion

of

the

makeup of
its

of

total
lying

these

6000 fixed
1800(600f

Total

Preobrazhensky
culating
(five

(one

to

one)

in

line

would

for

except

them to

II

as reserves.
(35% in
+ 1200v

would

on p.

it

absodepleted

its

lev-

old
in-

production

own produc-

fund

an equival-

have

to

from

capital

add to

form.

material

This

depart-

229.

Preobrazhensky's

scheme to

new fixed
the

reflect

economy:
capital,

of

analysis

same demand for

reserve):
+ 1200s

purchas-

the

at

expand

fixed

of

as fixed

idle

means

restore

going

means of

capitalist

existing

goes to

sell

what

and to

It

differ-

has a great-

and a larger

8400
=

(35% in reserve):
+ 360v + 360s = 2520

= 10,920
changed
to
with

two)
the

the

between

relationship

and the
historical

organic

composition

tendency

for

fixed
of
society

fund.

make no corresponding

this

capital

has also

capital

it

appropriate

with

an advanced

capital
+ 1200c)c

production

is,

reproduction

1.20,000
fixed
capital
6000(2000f
+ 4000c)c
II.

the

satisfy

will

That

what

"loan"

us proceed

capitalism

ent technical

in

issue

to

that

s(a)

own accumulation

I as we mentioned

He has altered

capital.

its

a de facto

its

the

(excluding

II

now exist

would

take

and use

add to

would

department

of

II

of

machines

I could

II

amortization

keep production

so as to

department

to

its

of

capital

unserviceable

way department

tended

IIv),

replace

production

department

share

would

constat

raw materials,

In this

el.

to

the

but

I,

and circulating

lutely

I out

accumulate

department

to

of consumption

be for

as a money hoard.

only

into

can enter

would

department

to

would

they

capital.

reserves

capital

Here department

fixed

of

these

of

that

size

and circapital
to

in-

-234the

crease

specific
this

see that

will

ordinary

ces and without

Although

ment.

uses this

to

not

deal

which

devoting
it,

of
first

our

2500 is

fix,

5000
and
circulating
i1

700 to

it

300 of

we can cover
only

50% of

the

fixed

The 500 additional

capital.
creased

amortization

fixed

of

1.20,000
fixed
capital:
7500(2500f
+ 5000c)c
The new exchange
This

fund,

from

1800 to

productive

capital

of 450,

II.

Of II's

6000 fixed
2250(750f
accumulation

The other

IIc(c).

Only

in fixed

capital

amortization

I(v+s/x)

as before,

will,

2250,

of

How much of

the
the

150,

will

This

raising
Iv

purpose.

7500,

equal

of

1000 increase
This

circulating

constant

comes from

gives

for

calls

the

department

in-

I as:

= 10,500

+ 750s(a)

in

increase
II

department

will

IIc

expand

way around:

= 3150

I,

capital

need

increased

previous

department

90,

or

II's

cover

demand for

prone

2250.

half,

fixed

to

300 Is(a).

of

+ 750s/x

180 only

of

is

demand for

Of the

lc(f)

+ 450s

help

Preobrazehsky

now this

remaining

+ 450v

as in

social

Only

Thus,

come out

existing

that

i. e.,

90 can go to

of

to

a corresponding

of

to

300,

necessitate

capital:
+ 1500c)c

210 have

Is(a)

capital,

the

and equip-

its

of

reserves

25%.

resour-

capitalism

all

Ic

now equals

by 25% all

fund

the

+ 1500v

existing

context,

capital.

capital.

any extra-

plant

increases

or

I's

meet

1S

before.

with

from

be covered

this

example.

and not

Ic(c),

IIv.

of

Ic,

leaves

its

society

one half

of

We

product.

already

how monopoly

in

a 25% rise

in

that

Instead

as in

its

stagnation.

us suppose

1500,

now equal

it

with

total
to

new construction

economic

only

its

society

with

demonstrate

of

we need now put

will

in

we will

by 1500.

capital

Iv,

the

let

for

capital

for

in

capital

easier

calling

periods

As before,
fixed

new fixed

subsequently

to prolonged

far

it

makes

demand for

fixed

of

weight

reserves;

go to

increase

demand for
the

can come from

300

increase

accelerated

stock.

1500 new fixed

capital

do we

-235in

satisfy

this
in

consisted

free

ease with

fixed

capital

go to

increase

of the

the

ducts,

forms

of production
plant

As this
if

society

this

current

stock

fixed
of

ing

and placed
than

For all
ist
tive

mand for

terprises,
into
prises

did

still

not

in

had to

take

lighter

at

in

filled

it

once,

of
from

"loan"

the

upon

for

burden

its
the

the

of

portion

smaller

the
fixed

of

amortization

this

addition,

strain

am-

exist-

economy's

productive

developed

capital-

share

interim.

demand will
power
of
In

society's

for

the

existing
our

present
output

forms

all

of

any momentary

satisfy
this

highly

reserves

greater

and labor

so much boost

the

competition.
a
we see that/more

easily

a lower

boost

quantity

all

the

free

that

the

place

pro-

proportions

an unmanageable

by increasing

possesses

production

production

been

a relatively

under

desired

the

have

capital.

Third,

technical

the

had to

society

capital.

part

of cir-

auxiliary

a much smaller

with

In

this,

had to

left

the supply

raw materials,

that

v meant

This

the

its

of
fund

departments.

constant

to produce

reasons,

capital,

and that

will

in

a far

can more

fixed

of means of

it

which

capital

circulating

constituted

these

economy,

of

expansion

of

to

compared

to increase

of

= 3500.

accumulation

as a result

+ 400

as much as under

this

both

reserves

capital

fixed

fund

resources,

its

would

ortization
stock,

of

construction

demand for

this

Second,

needed

quite

the

of

that

+ 400 Iv(f)

insignificant

available

be maintained

could

and equipment

capital.

value

increase

smaller

relatively

in

product

+ 500 Is(f)

accomplished

capital

l's

Ic(f)

not

is

half

capital.,

and other

1500,

the

only

First,

quantity

a smaller

+ 500 Iv(f)

society

surplus

constant

Ic(f)

difference

variable

department

of

was 2000

700 of
this

output.

part

capital

2500

which

accumulated

culating

is

But

competition.

relative

tap

Now it

I has covered

Department

the

as fixed

natura

= 2800.

Is(f)

Before,

way?

of

increase

mean a smaller

its

de-

withdrawal
new en-

brought
be
need

example,
of

in

of

construction
reserves

produc-

additional

the

new enterfixed

cap-

-236as they

ital,

pay back

will

from

loans

the

the

funds

amortization

of

I and II.

departments

From the preceding

example we see that
reserves
of fixed
and cirfor the capitalist
capital
culating
are absolutely
necessary
system; they give the capitalist
it needs in
economy the elasticity
of rapid
Without
periods
cyclical
expansion
of production.
these
the existence
for the market is imposof mass production
reserves
as would be any sort
sible,
of rapid
expansion
of the productive
Unfortunately,
in the Marxist
of the system.
literature
apparatus
that deals
with the theory
of capitalist
reproduction,
necessary
is not given
to this
If Marx abstracted
from
question.
attention
in the first
this
circumstance
stage of his analysis
of the profull
its
imporcess of expanded reproduction,
understanding
well
it in no way follows
from this
tance for a theory
of crisis,
that
Marxist
investigation
thought
must stop at that
point
where Marx's
by his illness
Here is why, on the
and death.
was interrupted
basis of schemes which ignore
these reserves,
the fact
that fixed
does not depreciate
in the course
the uneven
capital
of one year,
the influence
and increase
of fixed
renewal
capital,
and finally,
development
that the unevenness
of capitalist
exerts
on reproducis why given
tion--here
schemes at such a level
of abstraction
and
timidity
to go beyond
such a level
of scholastic
and inability
interrupted
investigation,
it is impossible
Marx's
to understand
the development
either
of a single
capitalist
cycle
or of a single
16
capitalist
crisis.
[the use of the amortization
fund]
In reality
take
such operations
Marx called
the time.
the release
this
place all
of capprocess
17 In the
ital.
instance,
it is a question
of
of the release
given
form
the
takes
of money capa part of the fixed
capital,
on
which
ital
form,
and again takes on a fixed
material
when the amortizafund is employed for orders
The abiltion
capital.
of new fixed
is in genity to manoeuver the amortization
fund of fixed
capital
in the system of capitalist
reproduceral a very important
spring
boom-18
increasing
its
in
tion,
of
cyclical
periods
elasticity
Preobrazhensky
of

the

is

Under

out

turn

will
in
of

short

out

supply

existing

ment leads
Prices

fund

reserve

stagnation.
that

to

fall

in

argues

Zakat

becomes,
free

under

the

an increased
turns

reserves,
an eventual

and crisis

into

of

volume
its

But

of

each

of

with

it

not a return

to the old

but

recovery

on a higher

and broader

before.

of

The tendency

was towards

greater

when the
is

new plant

means of

crisis,

extension

and

crises

new enterprises

capital

19 brought
noted,
a process

of

The shortage

construction

over-production
ensues.

fixed

opposite.

and the

build

to

rush

and use

existence

a source

capitalism,

competition

the

that

Kapitalizma

covered
and equip-

production.

as Marx

level

latter

had already

of production

technical

plain

and improvement

than
of

-237the

stock

social
With

the

the

longer

act

talist

trusts

not

for

during

Excess

capacity.
workers

are

circulating

crisis

crash,

This

basis

of

Marx's

We have,

Capital.
tion

between

tain

material

a source

of

cess and to
of

to

adapt

another,

the

for

his

of

adequate

rate

which

fixed

and

in

new investment.

to

over-production
the

cycle

of

during

the

capital

the

in
for

the

us is

schemes

his

the

most

starting

in

of

these

to main-

Preobra-

of
is

this

characteris-

one set

essential

as

reserves

behind

logic

of

contradic-

order

historical

point

III

Kapitalizma

zakat

answer

the

of

the

Volume

to

reserves

specific
to

attempting

in

profit
referred

In

formed

value

and the

regularities
to

of

existence
22

foundations

technical

surplus

occasions,

and the

analysis
But

reproduction

for

over-production.

examine

productive

of

capitalism

expanding

falling

on a number

of

increased

unemployed

and not

characterized

the

proportionality,
crises

stagnation

striving

the

of

need

reserves

its

stocks

lead

eventually

up

21

and the

capitalism.

he posed
use of

the

began

zhensky

increases

economic

these

operation,

smaller

between

theory

into

strong

built

expanding

existing

does

competition.

production

or

capi-

The technical

larger

the

no

demand

the

of

capitalism

production,

and boom that

contradiction

capitalist

tics

be one of

free

of

into

wars

any new demand for

meet

brought

necessitate

restoration,

period

is

new investment

will

that

in

any cutback

that

new enterprises

back

capital

And when this

the

to

capitalism

capacity

called

seen

The great

growth.

production.

reserves

and with

boom and crisis

of

competitive

20

capital.

forces,

cycles

meet

by cutting

We have

constructing

without

output

for

is

in

fixed

of

productive

argues,

those

precisely

cycles.

it

easier

but

weak,

the

economic

and engaging

the

previous

further

to

especially

such

Preobrazhensky

prices

is

of

imperialism,

age of

will,

this

production,

and expansion

as a stimulous

against

basis

the

the

by cutting

capitals

means of

growth

of

advent

of

of

questions

all.

In his

a one-time

in-

pro-

-238in

crease

demand for

the

increased

does this
it

systematic,

is

the

inherent

trying

to

in

This

surprise

Soviet

under

the

out

specific

of

questions

most

us,

Is

How is

the

of

for

the

NEP was how the

economy under

capital

23

process

these

answer

worked

not

the

question:

sky had already

should

We must

capital.

demand come from?

even more basic

In

fixed

it

really

fixed

basic

Behind

this

find

that

its

Preobrazhen-

tools

dilemma

could

is

accumulated?

analytical

country
of

or

capital

we will

where

momentary,

accumulation?

fundamental

conditions

however,

ask,

facing

accumulate

backwardness

we need.
the
fixed

and isolation.

NOTES TO CHAPTER 6
1.

formed part
For Preobrazhensky's
account
of how Zakat Kapitalizma
of the overall
study he had undertaken
of the Soviet
and world
to the arcapitalist
economies
and the book's
particular
relation
in the VKA, see Zakat Kapitalizma,
ticles
published
pp. 53-56.

2.

II,
Capital,
pp.
(Moscow, 1968),

3.

We assume here,
as throughout,
mains unchanged.

4.

II,
Capital,
263, passim.

S.

ibid,

6.

We have

7.

Sostavleniya
We do know of the draft
Metodologii
"0
the
article,
of
Genplana i Vtoroi
("On the Methodology
Pyatiletki"
of Drawing Up
to
Plan"),
the General
Plan and the Second Five-Year
submitted
Note 4).
(see Introduction,
Problemy Ekonomiki,
but never published
It seems inconceivable
with its arto us that
Zakat Kapitalizma,
for
the
gument about the conditions
need
and
of proportionality
in the accumulation
ample reserves
was not also
capital,
of fixed
Soviet
and
an indirect
the
economy
the
statement
of
about
plight
Certainthe industrialization
time.
the
drive
being undertaken
at
draft
ly the bureaucracy
this
for
the
of
the
understood
connection,
behind
the
line
article
veiled
being
was attacked
the
as
explicit
52-58).
in Zakat Kapitalizma
argument
(see Roginsky,
pp.
op cit,

p.

432.

175,181;
Theories
pp. 470-91.

Ch. VI,

pp.

See above,

that

140-41;

Ch.

2,

of

Surplus

the

of

rate

Ch.

XIV,

pp.

118-19

Value,

pp.

Part

exploitation

257-60;

and pp.

II

re-

Ch. XV, pp.

137-38,

Note

3.

between
the VKA articles
the relation
and
already
noted
for
Preobrazhensky's
Zakat
Kapitalizma,
plan
general
as well
as
2-3).
For
(see
pp.
subsequent
The
New
Economics
above,
volumes
of
Roginsky,
the attack
Konstinovich
ed.,
upon the book,
see Grigorii
PreobrazhenE.
Zakat
Knige
0
Kapitalizma
Zerkale:
Trotskistkom
v
in
TrotskyZakat
the
(The Decline
Kapitalizma
Capitalism
skogo
of
ist
The Decline
mirror:
of CapitalOn E. Preobrazhensky's
Book,
ism),
op cit.

-239Kapitalizma,
pp. 70-71,

pp. 61-62.
and 82-83.

For

8.

Zakat
sim,

9.

(Capital,
Marx, for instance,
II,
notes
pp. 245-46)
that the active
includes
life
the entire
time in which it funcof fixed
capital
in the process
including
tions
of production,
time and
waiting
idle,
other periods
when it may lie
those periods
and not just
Thus it continues
to depreciate,
though
when it is in motion.
less rapidly,
even when it is not being specifically
perhaps
used
is,
(it
to moral depreciation,
of course,
subject
unavoidable
effects
of age, rust,
etc.,
as well
as the wear and tear from dirits
life
so that
ect use),
span is averaged
over the whole produc(which,
is longer
Marx stresses,
tion period
than the working
proper).
period

similar

passages

see pp. 54,

pas-

to modify
this
we will
see how it is necessary
in line
accumulation
with the assumption
longer
its
takes
than one year to complete

10.

In the next chapter

method of calculating
that fixed
capital
turnover.

11.

in passing
(Zakat Kapitalizma,
Preobrazhensky
this
only mentions
It is a problem
to the Soviet
more immediately
relevant
p. 68).
fixed
renewals
of depleted
economy, where the need for massive
in current
output,
would have meant a sharp fall
given the
capital
in heavy industry.
long gestation
Preobraperiod
of investments
in VKA 22, and we will
in some detail
take
this
zhensky discussed
this
of exwith his theory
question
up in Part IV, when dealing
II,
in the USSR. See also Capital,
pp. 318-20.
panded reproduction

12.

We should note that

the supply
this
capital
of fixed
only raises
by 750 [500 Ic(f)
or 250]
growth of I(v+s/x),
+ 25% of the overall
half
is
by
only
of
required.
e.,
what
--i.

13.

Preobrazhensky
that it is
Zakat Kapitalizma,
states
pp. 69-70.
for
demand
for
difficult
department
II
this
to
new
meet
even more
its
due
product.
to
the
of
composition
constant
capital,
material
IIv,
increasing
for II to put IIs(a)
While it is easier
towards
form of means of consumption,
of conexpansion
given its material
it
lacks the supjust
because
is
harder:
Not
thus
stant
capital
is
largefixed
its
but
because
capital
ply of
circulating
capital,
definite
has
ly tied
in
natural
to agriculture,
turn
certain
which
limits
to its
expansion.

14.

Theories

15.

For Marx's
discussion
of the historical
in the total
share of fixed
capital
III,
tal,
pp. 260-62.

16.

Zakat

17.

incorrect.
is
Preobrazhensky's
"release
of capital"
use of the term
Marx used the term "released
the
to
additional
to
refer
capital"
during
the
is
period
part of an industrial
that
advanced
capital
initial
commodity
the
of circulation
to tide
over while
production
is
initial
is
if
capital
He shows that
capital
an
circulating.
advanced for the production
say, nine months,
extending,
period
keep
then an additional
to
production
be
necessary
capital
will
three months).
(in Marx's
going for the time of circulation
example,

of

Surplus

Kapitalizma,

Value,

pp.

II,

p.

477.
tendency
productive

the
to increase
see Capicapital,

70-71.

-240This does not mean that

is needed every year to maina new capital
for once the first
the level
tain
of production;
circulation
period is complete
the original
capital
returns,
only part
of which
is now needed to complete
the nine-month
(which
production
period
had been initiated
with the supplemental
Thus at the
capital).
is an increment
end of the second nine months there
of the origileft
to the supplemental
over,
equal in magnitude
nal capital
capital,
and which can now be used to keep production
the
going during
The result
is that with the end of
of circulation.
next period
is always left
there
period
every working
over,
or "released"
an
equal to the supplemental
amount of capital
capital
advanced in
See Capital,
II,
Ch. XV).
The fund to which Prethe first
year.
by Marx the sinking
fund.
refers
obrazhensky
was called
Kapitalizrna,

90.

18.

Zakat

19.

Capital,

20.

Zakat

Kapitalizma,

21.

ibid,

pp.

22.

Capital,

23.

demand in fixed
PreobrazhenAlthough
the 1500 increased
capital
it would not have been if we were
sky posited
may seem arbitrary,
There vast quantities
Union.
talking
of fixed
about the Soviet
destroyed
during
War, had to be resthe war and Civil
capital,
industrializathe need for rapid
tored all
at once; in addition,
demand for new fixed
tion would have made this
even larger.
capital
(Note
7,
have
In the unpublished
already
mentioned
article
we
this
Preobrazhensky
exactly
addressed
above) it would appear that
to show, as he had done in VKA 22, that such rappoint,
and tried
in
impossible
id and massive accumulation
fixed
a
was
capital
of
discussion
further
For
backward
Soviet
Union.
the
country
as
as
of this
point,
see Part IV, below.

II,

p.

p.
174,
p.

pp.

188-89;

Capital,

III,

p.

119.

20.

62-65.
II,

p.

472.

See also

Chapter

2, above.

-2417

CHAPTER
THE

The Accumulation
Production

I.

In his

that

equal

of Fixed
Means of

of

analysis

the

ed that

the

of

value

is

OF FIXED

Capital
and
Production

replacement

fixed

of

which

ACCUMULATION

capital

the

to

the

equivalent

accumulated

as a money hoard.

department

II

has a fixed

capital

its

of

This

produce.

In the
the

C'-M',

circuit

sale

fixed

his

of

ment at

this

use it

to

ended in
having

upon fixed

of

capitalist

375 of

or

In
that

replace
that

part

case

part

of

capital

of

the

the

his

replace

for

fixed

their

of fixed

capital

will

time.

If

either

over-production

placement),

these

two

wear

out

conditions
in

on the

this
basis

the
ten

department

(where

more

relationship--important
of

simple

at

reproduction.

than

than

375 must

enough
In

With

total
the

each

in

fact,

stock
same

we will

one another,
fewer

but

depreciation

replacement

(where

on

receive

will

their

balance

do not

only
etc.,

of

cent

375 and

renewal.

cent

per

his

span has

life

machinery,

II

with
of

this

not

needing

per

back

need replace-

take

conditioned

ten

commodities.

been transferred

whose

out

helps

it

and tear

do not
will

per

commodity

gets
wear

department

and require

or under-production

Marx derived
--strictly

Conversely,

capital.

is

scheme

ten

his

of

sale

annual

actually

same value

the

of

capitalist

worn

375 in money as an equivalent

our

the

capital

this

must

and whose

commodities

rest

capitalist

in

reproduction

the

375 may have

fixed

But

product

Each year

etc. ) which

his

year.

the

the
this

of

that

enough money to

of

money the

buildings,

particular

that

with

represents

(machines,
time.

the

Marx conclud-

In Preobrazhensky's
3750.

with

capitalists

simple
year

the

Now, all

capital

along

commodities

capital.

by fixed

his

to

into

passes

375 circulates,

and returns

capital,

375,

or

value,

Under-

any one year

annual

of

stock

Towards

capital

during

replaced

is

cent

Tendency

fixed

of

transferred

simply

CAPITAL

have

375 need rebe renewed).

its
to

own right
him this

-242its

constituted

great

significance.

This illustration
of fixed
capital,
on the basis
of an unchanged
is striking.
A disproportion
scale of reproduction,
of the producis one of the favorite
tion
of fixed
and circulating
capital
arin explaining
That such a disguments of the economists
crises.
is merecan and must arise
proportion
even when the fixed
capital
ly preserved,
that it can and must do so on the assumption
of ideal
on the basis
of simple
normal production
reproduction
of the al'
functioning
is
social
capital
ready
something
new to them.
This

relationship

to

only

not

department

There

duction.

cannot

the

replace

ital

is

that

first

ment II

that

fall

of

be answered

der the

the

amount

the

the

course

as Preobrazhensky
complex.

fixed

is

I(v+s/x)
lated

antee
II

the
in

will

years.

reproduced

of

that

every
outstrip

surplus

value

next

year's

each year's

absorb

this

the

It

entire

depreciated

part

quantity,

f/n,

only

IIc,
that
value

Under

goes

to

of

IIc?

between

the

to

and is

re-

the

life

other

hand,

His
so,
capital
and IIc

of
fixed
what
in

fix-

of

of

value

span of
of

all
will

circumstances,

fixed

I(v+s/x)

un-

stock

n is

And if
of

only

assumption,

the

augment

of

become much more

a fraction

only

since

this

of

on the
these

over

all

not

might

of part

be true

turns

added

where
I,

department
year.

is

It

sale

will

matters

however,

year,

the

as we drop

Kapitalizma,

obviously

purchase.

must

fix-

its

of

quite

will

capital

f,

seem even at

The money depart-

This

As soon

cap-

a problem.

it

fixed

capital,

new fixed

of

would

product

capital

new accumulation

difference

amount

repro-

production

fixed

society's
the

accumulation.

but
In

create

expanded

means of

money comes from

zakat

product,

constantly
part

in

following

show up in

will

did

under

stock.

annual

one year.

In the

capital

(v+s/x)

the

a given

into

the

of

Each year

ed capital.
f enters

of

to

for

additional

that

assumption

newed in

to

fixed

of

process

of

social

bound

enters

this

that

during

IIs(a)

the

true
enough

portion

as an equivalent

whose value

short

produce

equivalent

to

is

this

receives

ed capital

out

worn

be added

to

glance

I must

increment,

but an additional

hold

possibly

the

not

accumu-

capital
will

guar-

department

and thereby

-243a tendency

avert

towards

To illustrate
from
scheme

the

chronic

let

problem,

department

Preobrazhensky's

us take

and break

Kapitalizma

zakat

in

over-accumulation

it

down into

its

I?

original
material

com-

ponents.
10,000 fixed
capital:
4000(1000f
+ 3000c)c

I.

+ 1000(250f

+ 37Sc)s/x

+ 500(125f
3750 fixed
1500(375f

II.

capital:
+ 1125c)c

+ 750c)v

+ 375v

+ 500(125f

+ 187.5s/x

broken

as means of

exist
against
(f)

and (c)

towards
If
get

any form

375,

down IIv

various

only

which

circulating

designating

balances

constant

of

fixed

capital

fixed

the

capital,

down"

only
I
into

aliquots

will

we

The same with

IIc.

of

I(v+s/x)

of

go
]

when accumulated.

1125 in

equals

which

"breaks
what

part

as they
department

components

capital

with

capital

productive

+ 37.5v)s(a)

(c),

and

exchange

by way of

the

of

(f)

IIs(a)

elements

we add up all

+ 112.5

production.

means of

components

the

and do not

consumption
of

into

and IIs/x

+ 37Sc)s(a)

+ 187. S(37.5f
[We have not

both

the

consumption

fund of I and in IIc.

If
fate

in

we ignore

go to

to increase
talists

in

of

potential

increase
Iv,

I can reconvert

four-fifths

of

to increase

Iv.

And after

they

although

As to the 375 which

I.

fixed

the

this,

or

Thus,

4400(1000f
the

exist

year's

300,

must

commodities

physically
go to

into

augment

accumulation

+3300c)c

+ 1100(275f

Ic(c),

manner.

exists

in

the

four-fifths,
Ic.

be sold

as circulating

after

production:

of

portion

naturally

these

value

Of this,

capital.

capital

following

the

surplus

accumulated
fixed

in

deprec-

fully

does not

capital

proceed

would

its

125 of

fixed

the

that

accumulation

I,

form

physical
100,

the

one year

In department

fact

or

The other
so that

capi-

capital.

variable

constant
and the

the

25 go

capital,

other

75 go

we have:
+ 825c)v

+ 500(125f

+ 375c)s/x

-2444400(1100f

I.

+ 3300c)c

+ 1100(27Sf

+ 550(137.5f
II

In department
view

IIs(a)

as existing
production

means of

labor
new
of

37.5,

power,

that

product

II.

the

production,

II

partment

I.

consumption
Department
needed to

total

acquisition

commodity-

one quarter,
112.5,

or

one fifth

in

means of

amount

or
go to

will
the

of

product

its

production

the

right

its

of
in

capital
capitalists;

just

the

of

quantity

right

for

is

it

de-

with

de-

exactly

I has

and department

order.

consumption

means of
year

in

is

what

means of

of

amount

another

physical

turn

department

Everything

I.

in

II

exchange

which

has this

also

department

to

capital,

1237.5,

worth

as fixed

To purchase

412.5

De-

as well.

function

will

capital.

worth

internal

the

Department

constant

type

variable

and circulating

and for
II

proportions

the

has received
between

capital.

be perfectly
to

new fixed

of

with

that

II.

+ 206.25s(a)

balance

capital

production

The latter

I has obtained

means of

In addition,

consumption

this

exchange

consumption

= IIc.

circulating

of

personal

+ 206.25s/x

department

to

sale

the

advance

+ 412.5v

and circulating

requires.

sumed, we were

the

of

+ 412. Sv + 187. Ss/x

I(v+s/x)

fixed

As for

We should

The other

+ 1237.5c)c

has means of

to

IIc(c).

of

the

quarters,

quantity

for

subsistence

we

production:

this

II

and three

Sf + 1237. Sc)c

means of production
department

purchase
IIc(f)

for

offer

partment

the

of

overall,

needs precisely

fixed

means of

between

to

capital

a certain

of

I has 412.5

partment

of

four-fifths

year's

We see that
proportions

equivalent

If

same way.

then,

1650(412.5f

II.

very

IIv.

1650(412.

And after

the

+ 550s(a)

means of

elements

increase

in

proceeds

and a sum of

increase

buy additional

+ 412.5c)s/x

as a value

go to

will

goes to

goes to

accumulation

+ 825)v

able

to

clear
maintain

that,

given

proportionality

the

figures
between

we have

as-

of

the

all

-245elements

material

of

department
by
mined
constant

capital.

culating

capital

400 Is(a)

would not

Quite

ital.

clearly

of

I's

smoothly

in

both

both

stant

in
they

production

of

I's

is

this

that

in

should

use

departments

We will

have

of
for
to

reason

Iv)

is

just

to

ment I took
tal.

Of this,

erage

life

entire
ing

over

in

400 of

its

of

year,

but

have

then

200 would

cir-

of

the
had to

assumed

as fixed

exist

cap-

material
to

accumulation
break

to

to

have

we have

it

Otherwise

comproceed

down into

225

could

pro-

not

must acquire
some of its conthe
types of means of
with/different

10 years,

only

why the
the

it.

produce

the

two kinds
to

return
the

one year

this

this

is

scheme
fund

fixed

capital.

in
or

assumed

the
10.

value

If

fixed

in

our

of

the

To calculate

they

that

no longer

add to

to

in

mind

require.

on.

assumption

as we have

one tenth,

later

point

the

demand

combined

capital

constant

simplifying

accumulation

reappear

of

keep

to

point
the

reflect

of

composition

value

we

composition

physical

The only

must

figures

the

of

an accident

no reason

product

100 was for

100 does not

is

I's

As soon as we abandon
turns

would

any way reflect

used

form

of both

capital

fixed

of

(which

II

against

There

production
the

for

capital.

symmetry

scheme.

product

means of

and circulating

physically

order

deter-

each need.

In reality
our

exchange

fixed

but

is

noted,

assume a different

to

Is(a)

and department

itself

capital

used for

departments.

The

proportions

Is(a)

in

commodity-product

and 275 circulating

capital

vide

technical

have

we would

structures.

one to one,

of

100,

not

125 of

for

I had a ratio
but

Ic,

two departments

already

demand for

three,

the

Only

this.

position

fixed

But

capital.

allow

one to

the

technical

as we have

increase

to

went

identical

department

say,
of

not

have

respective

If,

that

fixed

go for

II's

in

reproduction

I(v+s/x),

of

composition

physical

both

They

one reason.

only

expanded

its

all

constant

capi-

has an avthen

example,

the

Depart-

valid.

capital

product

fixed

in
figures

the

the
followfor

-246-

accumulation

department

in

capital
ital

on that

will

also

I.

basis.

100 to

and recalculate

the

increase

go to
of

10 per

the course

of

next

II's

cent,

or

year's

this

we obtain

the final

add the

to

department

In

equivalent

ingly

have

we would

II

fixed

stock

of

3.75,

will

(for

the

both

accumulation

fixed
1.10,100
capital:
4310(1010f
+ 3300c)c

+ 1100(275f

product,

after

of

3787.5 fixed
1616.25(378.75f

II,

is

There

an apparent

production

entirely

not really

exist.
IIc

exceeds

in

fixed
the

+ 825c)v

and only

a value

the

value

our

scheme accord-

in

IIc

of

we show only
have been

its
fixed

of

half,

give

or

(41.25)

use as fixed

put

55,

capital,

110 of
to

rise

a surplus

be taken

exist

in

the

value

by Its

between

the

of

In

the

next

capital,

of

41.25
(4.125)

capitalists

dI(v+s/x),

will

material

form

capital.
the

two

had to purchase
had to proyear

its

to

enter

will

be 165,
appropriate

fund
110

This

same amount,
for

which
stock

whose accumulation

new variable

does

I(v+s/x)

it

cent
I,

it

do this

constant

10 per

an over-

product,

still

add this

will

of

to

II

and to

its

33.75,
because

final

exchange

all.

Department

this

I of

consumption.

to

a value

of

I,

It

The increment,

capital.

at

x + 206.25s(a)

apparent,

the

of

terms

means of

product.

will

will

in

department
of

department

value

accumulation

value

consumption.

of this

amount

II's

will

But

+ 550s(a)

+ 206.25s.

We say

the

of

from

and only

eventually

which
ual

this

in

no discrepancy

capital,

550,

equals
will

capital

and production

+ 412.5v

capital.

terms

is

be for

will

fixed

amount.

add 165 of

will

into

In

capital

duce and sell

41.25

of

there

fixed

capital:
+ 1237.5c)c
over-production

by this

departments,

of

cap-

fixed

simplicity

+ SSO(137. Sf + 412.5c)s/x

II

constant

additional

into

fixed

of

out):

carried

37.5

the

of

we alter

sake

stock

capital,

pass
If

total

value

37.5

the

production.

result

the

of

individ-

their

and a quarter
to

their

-247What we have

is

arises

as soon

as we allow

lated,

but

fully

not
It

IIc.

equal

to II's

tion

IIc

equal

the

capital

it

commodities
1616.25
If

to

was used

we look

37.5

created

between

two departments

the

the technical
it

fore,

the

stant

capital
to

clined

proportion

ratio

3.06:

ratio

len--that

from

total

of

total

the

product

to

that
raise

3.9

the

23.4

to

cent

one.

production

stock

fixed

of

of

relative
society

productivity

in

a decline

variable
from

weight

in

of

to

a more advanced
of

labor,

Ic

of

fixed

has

has de-

to
is

technical

of

one in
both

that

the

of

these

phenom-

means of

foundation
Clearly

fal-

labor

value

those

and

have
of

of

of

capital

productivity

fallen.

true

capital

All

the

capital

four

variable

capital,

Be-

and IIc,

of

total

re-

con-

Now it

variable

16.89%).

fixed

the

fallen.

telling

to

the

more,

circulating

from

even more

capital

16.67%

has

the

fallen

the

is

The same holds

employed

capital

But now

departments

and tear

to

and exchange

what

departments.

cent.

is

What

and,

to

has

one prob-

enough.

capital

wear

per

be

will

Production

composition

It

capital:

to

has risen,

give

value

means of

share

the

the

both

individual

solving

In both

capital

made up by the

has been

there

ena show that

tend

to

of

of

in

well

constant

1 in

this

will
fixed

added

the

of

altered

character.

3.33:

newly

example

one.

has

economy

fixed

terms

25 per

of

is,

production

In

composition

(conversely,
annual

to

the

addiit

same thing,

value

each other,

of

stock

value

departments

the ratio
the

1.
its

of

organic

both

the

total

= 1650 = I(v+s/x).

serious

and circulating
the

of

our

the

plus

the

of

the

In

balance

of

was equal

has dropped
the

fixed

between

lation

value

+ 33.75

more

on a more backward

has taken

the

is

scheme we see that

our

another,

structure

what

outside

= 1616.25

lem we have

Or,

accumu-

no longer

will

year

which

is

capital

I(v+s/x)

previous

produce.

at

closer

plus
fixed

remains

90% of

plus

year

reproduction,

fixed

that

year.

the

of

expanded

fact

every

production.

current

still

which

the

IIc

equal

means of
of

for

replaced

will

for

a new condition

this

and
is

-248historically

neither

is

It

must proceed
plus

and total
Just

fixed

employed
at

a glance

ulation

(71.43%)

We can confirm
Let

3000/14,000

and

1000/14,000

(7.14%)

following

up the

of

accum-

fixed,

circu-

Namely

(21.43%)
for

c/v,

that

capital:

capital,

the
the
the

of
of
of

value
value
value

total

fixed

by setting

this
the
the
the

x=
y=
z=

for

the

and

unchanged.

suggest

shares

sur-

and c(c),

capital,

would

existing

capital,

c(f)

variable
243)

in

capital

capital,

constant

(p,

the

preserve

and variable

10,000/14,000
culating

scheme

to

Accumulation

accumulated

constant
between

relationships

original

the

of

circulating

production

to

on a new basis.

out

breakdown

the

capital,
the

have

lating-constant,

start

means of
our

then

will

we must

leaves

capital

warranted.

a way that

such

between

value

variable

that

obvious
in

logically

nor

for

variable

simultaneous

cir-

capital.
equations:

capital
newly added fixed
circulating
constant
additional
variable
capital
additional

capital

Then we have:
(1)
(2)
(3)

z= s(a)
x+y+
lx +y
4z =0
.
0
3x - y=
.
(1)

Equation
s(a)

must

in
these

the

equations

identical

Returning
surplus

for

value

to

we will

have

of
of

x,

y,

used

each

given

capital;

capital
i. e.,

department,

our

= 4.

+ y)/z

up fixed

(2)

to

that
is

present

by 10 per

depreciates
(. lx

fact

the
as-

cent

Equation

(3)

circulating

lx: y = 1: 3.

Sol-

have:
we

and z respectively

s(a)
s(a)
s(a)
to

to

capital

ratio

c component

71.43% of
x=
21.42% of
y=
z=7.15%
of
Which is

the

of

the

Equation

parts.

constituent

fixed

of

= 4,

c/v
for

its

composition

stock

and expresses

equation,

sum of

organic

the

equation

capital
ving

the

and that

per year
the

the

that

sumptions

is

a definitional

equal
for

equation

is

our

what

we estimated.

original

be accumulated.

scheme on p.
Out of

this

243,

I has

department

500,357.14

is

added

500
to

-249the fixed

capital
part

culating
tional

stock.

of

fixed
10,357.1
4142.8(1035,7f
II,

In department
fixed

At the
I.
II.

for

the

different

ween the

If

has to

1553.6.

I has produced

used up constant

turnover
but

fixed

capital,

Hs(s)

that

133.9

it

of

duction

for

in new fixed

of

plus

this

case

IIc

fixed

+ 120.5

120.55.

capital

while
plus

problem

the
plus

all

department
40.2

in

even more

for

productive
of

within
proIIc

= 1553.55.

equal.

purposes,

II's

to replace

the

of

conditions

ex-

As we demonstrated

above,

the

that

I(v+s/x)

90% of

is

53,55

not
value

the

figure

value

a shortage
newly
needs

the

of
of

of

the

we work

+ 90% of

means of
of

174,1

pro-

(133.9

capital).

constant
if

of

portion

means of pro-

produced
a total

added

newly

1553.6

equals

new circulating
strikingly

bet-

capital

production

remaining

II

+ 517.85s(a)
+ 194.2s(a)

each department's

I(v+s/x)

requires

There
I has

and 13.4

relationships

practical

This

= 1674.1.

value

that

capital

capital.

Department

exchange,

We see the

fixed

for

+ 517,85s/x
+ 194.2s/x

means that

this

goes

have:

portions

satisfied.

IIc

to

went

not

equals
in

= 1553.6

duction

are
period

that

But

is:

+ 187.5s/x

the

of

means of

enough

depart-

of

appropriate)

capital,

original

for

addi-

of:

we find
are,

capital,

panded reproduction

IIc,

we add up the

arrangement

187.5,133.9

+ 1035.7v
+ 388.4v

elements

be exchanged

is

we will

the

of

The two magnitudes

Department

longer

all

cir-

+ 500s/x

+ 388.4v

+ 3107.1c)c
+ 1165.2c)c

the

towards

goes

where

constant

production

material

each department.
that

fund

capital:
+ 1165.2c)c

scheme retains

the

places

an arrangement

year's

35.71

+ 1035,7v

circulating

4142.8(1035.7f
388.4E
1553.6(

This

duct

capital:
+ 3107.1c)c

3883.9 fixed
1553.6(388.4f
end of

decimal

increase

to

goes

accumulation

off

giving

capital,

II.

Finally,

whose accumulation

40.2

capital,

variable

capital.

(rounding

capital

I,

107.14

After

capital.

variable

Its
ment

constant

A further

out

accumulation

-250for

the

next
its

crease
fixed

supply

labor
which

vidual

consumption

55.5.

Even

zation

of

been
the

if

able
next

cover

year

this

of

the

in

process

very

What is
of

expanded

by the

latter

means of

terms

its

makeups

labor

this

stant

capital
We have

only
the

had

utilisomehow
in

production,
by

and

a
of

under-production
(as

Preobrazhensky

and

arises

out

of

department
already

the

value

creates
II
seen

is

always
to

requires
that

any transfer

the

of

for

to

equal
produce

social

part

the

these

of

value

and

from

and

labor

power

the

surplus

of

means of

reproduction
capital

II

additional

the

of

value

must

consumption;

two departments

consumed

expanded
of

with

demand for

the

the

that

constant

department

means of

His

grows

I each year

exchange

of

sizes

fund

as II's

department

department

condition

consumption

same rate

demand for

be such

must

I's

to

production

equal

plus

power

and without

provide

The general

means that

this

must

the

and at

The relative

I employs

value

indi-

the

means of

magnitude,

systematic

department

that

own increased

production.

department

smoothly,

is
quantity

magnitude

technical

of

this

disproportion?

the

of

new means of

to meet

is

180,3

trade,

occurrence

but

for

value,

accumulation.

source

social

in

that

therefore,

18.5,

through

means

grown

a momentary

not

reproduction

enough

in order

tion.

the

In

produce

their

of

have

would

surplus

either

of

The

in

can

foreign

to

deficit

Kapitalizma),

same absolute

capital.

the

Zakat

II,

De-

capital.

the

of

department

recourse

We see,
is

production
it

treated

shortage

about

the

capital).

37.03

Thus,

to

addition

variable

or

department

that

first-year

amount.

half,

II,

through

its

its

capitalists.

for

in-

go to

must

constant

produce

take

department

or

to

considerable
means

its

we assume

reserves,

will

I will

by

required

production

in motion

of

(138.7

increase

to

180.3

which

new circulating

37.03

department

out of

of

production

for

41.6

set

power

194.2,

equals

means of

devote

I will

partment

of

stock,

capital

extra

IIs(a)

year.

to

the

con-

consumpproceed

departone

-251went to
advanced

economy,

duction,

where

constant

(should

in order

to

enough.

Given

re-establish
a particular

between

their

organic

composition

tion

equilibrium,
is

not

One,

turn

means a sharp

fixed

partments

next
need for

greater
a reduced

size

of

have to

for

augment

absolute
demand for
This
ganic

II's

of

thus

rise

in

I gave
constant
its

total

I(v+s/x)

means of
result

composition

is
of

it

of

virtually
capital,

it

of
this

difficulty

With

scale

fund

of

sufficient

to

cover

labor

it.

be if

II

output

a
and

The only

the
to

it

with

department

satisfy

two de-

the

bring

I to

to pur-

absolute

meet

department
that

there

department

H's

Ills

I would
was an
increased

3
identical
despite

to
being

what
equal

we found
in

in

demand for

its

of

such

sur-

goes

between

each year

production

of

that

part

exchangeable

enough

year,

Two, we simul-

produces.

would

that

This

quantity

increasing

on the

a posi-

capital.

equilibrium

department

from

accumulated

automatically

will

capital.

production.

relative

sharply

point

part

I's

of

accumulation

production

around

the
value

accumulation

get

department

in

surplus

production,

on the

could

requirements

own constant

means of

ability

way society

its

both

(as when the

a single

of

not

sizes

condition

course

increase

portion

year's

the

is

imbalance

off

complicating

share

From any given

capital.

in

relative

starting

ad-

grow,

however,

products

the

by I and the

chase new means of

the

solely

reduction

the

their

other's

Now,

in

I must

alone,

we increase

go to

must

raise

each

pro-

and remain

be an automatic

would

rises).

amortized

be equal

department

of

composition

for

capitalist

and planned

This

when we introduce

value

taneously

capital

a technologically
of

must

size

there

demands

of

plus

power employed

capital

absolute

otherwise

we do two things.
that

of

organic

respective

capital

anarchy

proportionality).

dictated,

are rigidly

of

the

rise,

in

be anticipated

cannot

compositions

it

the

under

transfers

such

happen

can never

and especially

organic

vance--their

fixed

that

another--something

both

when the

or-

departments,

-252is

What

rises,

ferring

the relative

uncovered
those

the course

this

of

process

its

dence between

more backward

economic

in

that

the

and that
to
to

systems

the

more

of

en-

capital
In

production.

interdepen-

a growing

inevitable

the

the

we have just

transfer

other

trans-

in

production

means of

of

total

increasing

thereby

problem

establishes

its

by perpetually
I,

means of

produce

capitalism

leads

that

fund

means of

modes of

production,

subordination

these

of

advanced.

From Unequal
Organic
Compositions
Variations
Arising
of Capital,
in the
Unequal
Capital
Proportions
of Fixed
and Circulating
Two Departments,
of Production
and From the Application
of Prices

II.

The

longer

for

ties

turnover

of

case

when we increased

were solely

attributable

We know,

unequal

the

however,

one year
organic

of

that

that

depreciation

arise
of

capital

unreal-

and a well

develop-

because

it,

period
and to
the

from
in

the
of

with

no difficulThis

questions.
c/v)

factor

composition

presents

that

than

strikingly

assumed

reproduction

even when all

disproportions
compositions

of

a rising

is

those

other

organic

technique

disturbing

the
to

which

we have

expanded

no exceptionally
with

departments,

Nevertheless,

compositions

The

capital.

level

including

assumptions,

complicating

fixed

a high

so far,

discussion

our
no

both

with

labor.

of

show (as

in

same in

the

and raises

we found

period

an economy

organic

us to

used

make

ed division
equal

in

Preobrazhensky,

is

of capital
istic

we have

schemes

from

taken

over

that

own production

an interconnection

consumption

The systematic

industry

of

for

problem

of

see below

same solution:

sectors

need

department

to

Each dis-

same way,

II's

this

production

We will

product.
has the

the

I's

of

II

the

raising

solves

department
of

weight

social

into

from

capital

in

operate

share

Capitalism

commodity-product.

tire

the

and reducing

production

processes

by simultaneously

proportionality

rupts

the

the

more,

allowed

disproportions
fixed

capital

no other.
constant

other

sources,

departments

capital
namely
I and II,

turns
the
and

-253disturbances

these

that

are
this

must now reintroduce

analysis
ditions

of

a real
our

way affects

level

original

this

of capital,
fact

II

both

into

take

towards

of prices

real

because

of

the
is

value

in

to its

capital.

did

I led

to

as the

and led

of

our

present

basis

movement

of

of

any

to

problem

capital

of

our

an-

we must

basic

tendency

application

disproportion

the

over-accumulation

meant

profit
not

each department

re-

of

this

of

important
and assume

that

but

reverse

of

if

in

de-

value

means of
prices

general

an average,
see

order

employs,

we apply

to

the
to

surplus

an over-production

that

according

capital

of

composition

the

I and

bring

to

the

economy

share

is

reI.

was a predictable

rate

in

uses

department

the

of

the

the

express

we have uncovered.

This

extremely

and cir-

departments

order

a persistent

organic

to

fixed

and a factor

direction

accumulation,

social

in

VKA 17 that

of

a greater

is

c(c)

I that

capital

and hence

does

conditions,

a general

variable

it

in

compositions

than

make in

throughout

attracting
II,

to

c(f)

production.

The higher

Therefore,

of production

actual

to it

department

production,

of profit

of

this

consumption,

any way mitigates

the

reversed

the

production

discussion

means of

con-

same

and does not

department

redistributed

size

partment

our

assumption

the relative
total

in

it

two departments,

the

surplus

the

with

production

in the production

than

we must

we saw in

of

between

sult,

that

if

its

organic

means of

of

under-accumulation

Finally,

produces

ratios

see

the

had the

between

realistic,

unequal

to

departments

equal

in

line

make our

see if

to

relationship

capital

in

account

both

positing

not

which

a concretization

increasingly

alysis

is

to

order

approximates

and second,

that

the

Like

II,

for

allowing

is

of

fixed

less

latively
Again,

in

condition

in

We

reproduction.

and conclusions.

assumed

department

that

results

capital.

constant

culating

first,

economy,

terms

expanded

more closely

we also

technique,

of

it

capitalist

In addition,

under

qualification,

so that

concrete

more

systematic

once

what

again

we arrive

rate

-254at in

a purely

value

When we have
they

is

a chronic
in

exchange

modities
troduce
tempts

to

of the

problem

of

Unequal
We start

3750 fixed
1500(375f

in

capital:
+ 1125c)c

department

divide

the

up into

variable
organic

composition

surplus

value

(1)
(2)
(3)
Solving

will

x+y+z=
lx +y,
3x -y=0
.
for

x,

y,

of

in

shows that
that

makes our
Since

the

com-

we in-

once

reproduction

problem

own at-

essence
that

schemes

that

but

production,

we are

organic

examining

composition

could

tendency
only

of

into

modification
the

no way counteract

our

towards

reinforce

it.

Capital

of
scheme:

+ 1000v

+ 500v
is

capital,

+ 250s(a)

+ 250s/x

so its

unchanged,
of

three

differently,

+ 500s(a)

+ 500s/x

fixed,
II,

Department

divide

it
"

the

introduce

same percentages

as before.

capital

to

following

Our scheme for

it

valid

more,

the

since

as a rise

1.10,000
fixed
capital:
4000(1000f
+ 3000c)c
II.

still

"neater,

Compositions

the

with

What is

that

means of

Organic

for

is

by complications.

could

of

fact,

in

there

when he assumed

we can employ

finally,

it

under-production

II-a.

change,

make no sense

Clearly

schemes.

is,

we will

This

production.

production,

discerned

analytically

same nature

would

of

turn

and that

problem,

means of

prices

factors.

not

state,
the

of

values

unencumbered

it

capital,

their

the

of

in

modifications

alter

Preobrazhensky

at

does

We should
fact

case

the problem

solve

are relatively

in

the

complicating

more

these

of

fundamentally

tendency

the original

all

under-production

surprising

quite

is

introduced

do not

see that
still

analysis.

to

fund

accumulation

circulating-constant,
now has a lower

however,

one,

according

and so its
to

accumulated

these

equations:

IIs(a)
3z =0

and z,

we get

69.77%

of

IIs(a)

going

for

fixed
new

will
and

-2ssfor

20.93%

capital,

IIv.

to increase
its

to

174.42

additional

The arrangements

the

of

3924.4 fixed
1569.7 (392.4f

At the

the

end of

I.
II.
When the

deficit

composition
in

means of

I cannot

ment II

productively

is

than

the ensuing

fixed

the

it

year,

immediately
The overall
the

174.42,
= 173.2.

somehow is

of
the

our

able

to

Department

stock,

110.9
its

capital,
arranging
we have:

to

I
the

variable
54.8
the

to

of
first

lower

means of
of

and the
to

accumulate
Ic/v,

than

de-

production

depart-

one year.

I(v+s/x)

department
expand

its

restore

16.2

of

the

plus

be unable

II

in

production
the

constant

circulating

will

of

Department
and 24.3

capital

to

its

and carrying

minus

tis

to

in

will

variable

capital.

out

production

the

II

to

for

second
capital
and

capital,

add 182.5

II

1553.55

fixed

its

constant

department

happen

add 369.9

IIc

capital

= 52.33)

What will

portion

fixed

us assume that

let

(1500

1726.75

additional

capital

deficit.

= 517.85]

is

production

example,

this

capital.

social

IIc/v

to

circulating

[s(a)

IIc(c),

to

means of
year

original
cover

inability

will

depart-

up.

additional

As in

year?

37 to

used

only

necessary

be unable

will

the

Not

capital

deficit

start
plus

16.2.

II's

in the course

simply

both
IIc,

equalled

those

of

all

consumes
by about

I(v+s/x)

+ 517.85s(a)
+ 261.63s(a)

same in

was the

Now, with

capital.

IIv.

to

be:

+ 517.85s/x
+ 261.63s/x

showed up in

production

and 23.25

+ 250s/x

+ 1035.7v
+ 523.25v

capital

add

+ 500s/x

+ 523.25v

year

even replace

IIc

to accumulate

of
first

the

fixed

needed

partment

from

capital:
+ 1177.3c)c

will

therefore

will

+ 1035.7v

+ 3107.1c)c
+ 1177.3c)c

additional

capital

capital:
+ 3107.1c)c

4142.8(103S.
7f
1569.7(
392.4f
organic

capital

II

IIc(c),

to

and 9.3%

capital,

250(s),

the

of

52.33

social

production:

of

less

total

constant

out

capital,

year's

we saw that

ments,

year,

fixed

of

fixed
1.10,357.1
4142.8(1035.7f
II.

first

In the

stock

circulating

its

fixed

After

re-

the

year

-256I.

II.

IIc

capital:
+ 3218c)c

+ 1072.7v

+ 536.3s/x

+ 536.3s(a)

4106.9 fixed
1642.8(410.7f

capital:
+ 1232.1c)c

+ 547.6v

+ 273.8s/x

+ 273.8s(a)

means of

of

This

for

of

the

means that

has gone

has

of

from

shortfall

16.2

fixed

of

The total
an increase
to

simply
33.8,

to

production
and that

198,

to

destined

from

lie

of

worsened.

173.2

production
gone

means of

fund

have

capital

means of

the

deficit

replacement

fixed

capital

used up constant

17.6.

in

production

The shortage

24.8.

II's

fund

accumulation

shortage

The total

Both the deficit

198.

of the

by 33.8.

I(v+s/x)

exceeds

equals

of

10,727 fixed
4290.7(1072.7f

capital

replace

a rise

of

increased

also

by 7.2.
As we would

II

reinforces

of fixed
one,

caused

the

to

fall

fixed

capital

acted

to

its

increase

in

II's

not repeat

will

(including
I's

the

part

fact

that

the

production

organic

tendency
than

is

on proportionality

the

growth
total

to

new fixed

II's

demand.

the

towards

of

and its

department

composition

we first

two per

than

rate

than

that

Not

Thus

IIv

producing

is

fact

the

goes to
We need

will

faster

the
augfund
than

we see that,

producing

only

have

accumulation

an even more chronic

found.

new

between

capital)

that

is

cent.

of

to

by slight-

but

value

surplus

to

would

however,

have

going

the

has a higher

of

value,

satisfy

of

part

in

to

itself

this,

three

going

value

and of

cap-

period

to

one,

Counteracting

will

surplus

in

better

capacity

account

consumption,
means of

of

to

surplus

This

turnover

somewhat--not

capital--by

The increase

lengthened
four

of

under-production

absolutely,

the

this

composition

towards

from

IIc/v

accumulated

growth.

effect

production

department

of

raises

variable

what

grow

we take
.
duction

of

IIc/v

two departments.
ment its

by the

by some 1.5%.

rate

fall

the

share

organic

tendency

about

disproportion

ease the

slowing

the

When we lowered

capital.

this

lower

the

brought

production

of means of

that

expected,

in department

ital

ly

have

when

means of

pro-

means of
of

shortage

department

II

-257-

unable
of

all

to

accumulate

the

constant

new fixed
it

capital

it

capital,

can no longer

use up in

would

even replace

a single

year

of

expand-

ed reproduction.

Proportions

Unequal

II-b.

This

is

case

had unequal

Take

quickly.

compositions
following

the

fixed
1.10,000
capital:
4000(1000f
+ 3000c)c
2500 fixed
1500(250f

II.

Here the
II

organic

fixed

does department

stead

of

one to

this

to alleviate
a new set

however,

we find

Here x=
though

just

x+y+z=
lx+y-4z=0
.
5x-y=
.
60.6% of

II's

IIs(a)

between

capital.

In

cumulated

surplus

partment
of

I,

I.

the

result.

We can illustrate

quite

but

value

department

of

commodities
five,

now one to
II

mean that

I for

new fixed

for

distributing

de-

will

and so we would

in-

expect
If

capital.
IIs(a),

IIs(a)
0
y=

means of
what

this

s(a);

capital

fall,

will

II

devote

will

increase
II's

by working

its

general

share

will

accumulation

the

of

pattern

means of
of

Even

division
practicof

composition

organic

capital

s(a).

is

capital

a greater

shortage
out

the

variable

of

rate

be a worsening

the

and variable

production

by varying

to

Consequently,

of

of

and z=9.1%

we found

year

value

will

30,3%

fixed

any given

and there

same,

is

before,

equations

s(a);

with

the

will

on department

opposite

it

capital:

a given

this

we

+ 187.5s(a)

IIc(f)/c(c)

than

where

+ 500s(a)

are

produce

capital

one,

social

+ 187.5s/x

simultaneous

demand for

identical

ally

of

+ 500s/x

clearly

burden

the

we solve

(1)
(2)
(3)

fixed

less

+ 1000v

to

Capital

and we can cover

the

capital

Constant

previous

scheme for

of

Quite

the

capital,

The ratio,

three.

mand relatively

of

capital

I.

to

+ 375v

compositions

uses much less

than

of

capital:
+ 1250c)c

Circulating

and

identical

virtually

organic

Fixed

of

of
than

its
will

outpace

acdethat

production.

accumulation

for

-258a two-year
after
II,

first

the
it

will
At

to IIv.

year's

accumulation

add

113.6

the

end of

its

to

the

fixed
1.10,357.1
4142.8(1035.7f
2613.6 fixed
1568.2(261.4f

II.

IIc
tion,

In year

17.8 to

example

IIv,

giving

at

fixed
1.10,727
4291(1072.7f

is

greater

of production

118.8
the

ends at
This,

too,

in

capital

the

tendency
be the

towards
latter,

to c(c).

In

tend

of production,
arithmetical

to

by 30.4,

II,

and pro-

accumulation
59.4

capital,

to

Ilc(c),

of

means

+ 536.3s(a)

+ 205s(a)

+ 205s/x

and II's

deficit

overall

and that

disproportion

we see the

has

production

means of

of

by 15.65,

IIc

means of
its

and not
case

outgrow

in

and thus
possibility

II,

partially

II

fixed

of

coming

from

of

fixed

lowered

offset
more.

II,

raise

it
its

its

deficit,

II's
It

share
has

the

same
the

To counter

and production

department

and nothing

in

I,

department
that

accumulation
of

the

capital.

of

composition

department

that

employed

production

organic

I's

Lowering

result.

under-accumulation

that

by 116.9.

same accumulation

+ 536.3s/x

The shortage

again

produc-

year:

+ 1072.7v

within

means of

supply

fixed

increase
the

+ 196s(a)

department

For

+ 517.8Ss(a)

same time.

total

the

demand for

256.
to

was a predictable

as lowering

effect

once

total

+ 409.9v

137.4.

So,

+ 196s/x

the

department

have:

+ 392.1v

have

like

and 17.1

+ 517.85s/x

exchangeable

end of

The deficit

by 4.65.

capital

would

on p.

capital:
+ 3218c)c

equals

jumped by 20.3:

both

I's

look

IIc(c),

to

we will

+ 1035.7v

course,

I(v+s/x)

than

year

II's

2732.4 fixed
capital:
1639.4(273.2f+1366.2c)c

II.

lie

of

as follows:

proceed

will

our

production

exceeds

I will
As for

56.8

capital,

capital:
+ 3107.1c)c

I will,

two

as in

duction

1670.4,

to

equal

fixed

by 14.65.

department

and production.

capital:
+ 1306.8c)c

I(v+s/x)

exceeds

know what

We already

period.

contradicts

have

would

of

c(f)

of

ratio

to

surplus

value

of

means

supply
But

this
the

is
real

an

-259historical

ing productivity

of

fixed

Of all
the

schemes,
a truly

the

The basic

of

prices

of

and foremost

production,

into

our
is

production

for

the

department

in

and espec-

one that

a lower

have

pro-

its

to produce

means of

gives

incorporate

to

have

to

as we would
of

under-production

the

capital

proceeded

reproduction

schemes
II

fixed

less

reproduction

grow-

product.

introduced

require

the

Production

of

trends

towards

tendency

annual

that

says

first

means of

When we modified

and to

expanded

output,

total

result.

labor

of

we have

historical

of

share

which

itself

reflects

Prices

variations

application

the observable

nual

the

of

surprising

ductivity

the

in

The Application

II-c.

labor

of

capital,

development,

capitalist

social

increase

the absolute
ially

of

movement

an-

expected.

production

was

reinforced.
Preobrazhensky's

When we examined
under

pure

capitalism

II,

partment
invalidate

that

That
it

which

one department

it

under
law of
It

affect

NEP, where:
value

would

of the
istence
prices

between
his

follow

that

of

fixed

of

a general

from

values

rate
will

of

this

the

most

capital
profit
the

to

analysis
IV,

Part

prices

of

change

modes of

from

important
raises

and the
tendency

is

point

disequilfrom

capital

Soviet

question

towards

any way

Nor

production.

is

whether

in

essential

erosion

values

systematic

not

and a growing

the
the

de-

and not

of

crises)

of

production

towards

transfer

periodic

in

I,

his

left

tendency

and other

discuss

deviation

it

reproduction

of

did

This

as a result

of

as we will

accumulation

the

capitalism

application

and the

seem to

(often

another

since

an inherent

through

overcomes

interconnection
did

has

prices

was department

over-production.
argument,

capitalism

to

it

expanded

of

we applied

profit,

experienced

Preobrazhensky's

unchanged:
ibrium

of

rate

if

that

we noted

and assumed a general

analysis

economy
of

assumed.

already
our

the

analysis

or not

the

deviation
under-production

exof

-260-

When we apply
our

alter

prices

and it

systematic
to

appeared

II-a,

i. e.,

tions

of

rate

prices

of

of

coefficients

partments

I and II,

would

ities
ations

as the

Like

advanced.

datum

as a given
produced
will

in

the

labor

insofar

ations

of

commodities.

any capitalist

must

for

+ 500v
general

Marx,

next

the

less

is

still
that
assump-

product

of

of

mass of
the

social

into

the

They

form

part

of

profit.

of

nature

the
the

same in

the

de-

problem.

each separate
to

produced
of

Though

the

their

values,

of

commod-

these

devi-

the

influ-

value

succeeding

cost-price,
this

produc-

and will
nor

capital

With

total

of

prices

commodities

prices

the

any year's

result

the

that
the

are

profit

from

and

+ 500s(a)

value

year.

the

of

simplicity,

of

pass

calculate

of

for

the

like

distribution

the

the

composi-

would,

and c(c)

as they

his

in

section

two departments,

the

sake

rate

from
organic

profit

+ 250s(a)

deviate

great

the

+ 250s/x

surplus

will

of

+ 500s/x

we take

the

for

not

+ 1000v

total

for

the

affect

distribution

ence neither

is

initial

our

schemes
If

no change

does

one year

even out

power,

the

the

same in

c(f)

the

of

it

they

A result

be the

to

IIc/v.

production,

capital:
+ 1125c)c

ratio

but

values,

out

rate

be the

effect

as this

we calculate

production

because

use

annual

We assume,
of

3750 fixed
1500(375f

As before,

tion

capitalist

we see that

accumulation.

turns

than

the

fixed
1.10,000
capital:
4000(1000f
+ 3000c)c
II.

schemes

means of

of

we will

value,

value.

our

conclusion,

greater

equal

surplus

technical

capital

of

abstract.

is

were

each year

problem

Ic/v

production

surplus

year,

analysis

their

at

now itself

the

where

of

sold

first

our

was too

capital

annual

with

simplified,

To illustrate

to

production

commodities

grows

that

an analysis

total

a value

The deficit

contradict

were too

of

results.

than when we assumed

tions

in

reproduction.

expanded

do not

we find

that

production

of means of

in

of
gener-

upon which
mind,

we can

-261We will

work

of

four

years.

In the

first

year,

proceed.
a series

fixed

of

stocks

general

of 14,000,
tal

earn

a profit,

is

5375,

capital

ment of
I.
II.

from

x=
y=

addition
addition
Is (a)
addition

z=
and from

take

from the

year

of surplus
the basis
for
of

the

116.1

fund

the

to

capital.
profits
circualting

its

of

department

total
figure

the

off

The new arrange-

places).

department

of Is(a)
capital

= 21.42% of

Is(a)

= 7. IS% of

capital

in

that

+ 541.8p(a)
208p(a)
+

= 71.43%
constant

fixed

II:

I Is (a)
IIs(a)
I Is (a)
immediately

scheme
to

the

general

rate

of

accumulation,

between

circulating

constant
II

145.1

will
for

capital,

year

one.

and 19.3

the

the

for

starting

of

stock
to

total

43.5

new variable

its

for

mass
on

point
I,

fixed

out
capital,

variable

share

accumulated

capital,

the

department

and 38.7

capital,

new fixed

its

production

two departments

the

Here

add 387 to

distribute

After

forms

it

of

result

with.

start

profit,
in

will

as the

above

one we will

and production

constant

whose to-

between

rounded

I:

variable

way:

giving
capital

II,

discrepancy

+ 541.8p/x
208p/x
+

to

Department
this

in

has been distributed

accumulation
its

decimal

a total

with

having

plus
This

1500,

Department

(the

comes from

stock
capital
of
part
circulating

prior

value
of

416

to
to

x= 69.77% of
y= 20.93% of
z=9.3%
of
We will

of

+ 1000v
+ 500v

+ 3000c)c
+ 1125c)c

254-55

pp.

1083.6.

workable

248 that

p.

of

capital,

is

the

of

together.

+ Its
I,

sum

be:

will

4000(1000f
1500( 375f

We recall

p,

value
to

profit

Department

a profit

surplus

pf

rate

has

Is

value,

7.74%.

the

constant
taken

for

reproduction

to

equal

circulating

surplus

will

is

two departments

the

of

and total
the

for

and expanded

capital

the

plus

profit

capital

profit
for

of

rate

total

The total

19,375.

comes to

accumulation

the

capital,

capital

the variable

out

of

its

additional
capital.

After

-262-

fixed
1.10,387
4154.8(1038.7f

terms,

In value

of

of prices

the

if

such a way that,

ues,

department

exchange

I would

production

means of

does not

exchange

from

of prices
surplus
forms

the

take

could

an actual
this

the

equal

are

I.

Taken at

level,

capital

under

general

rate

lower

organic

in

section

the
of

most

profit

violated

the

means of

production

in

price
is

the

I(v+s/x)

of

new conditions
equal

capital
of

to
in

expanded
to

IIc,

If

society's

tendency
the

tocontra-

somehow exchange
it

phenomenon

take

the

of

the

I(v+p/x)

same problem

equal

fixed

of

the

even though
in

IIc,
II,

reproduction.
1500 plus

on

place

over-produc-

accumulation
Thus

effect

would

two magnitudes,

the

to

bal-

deviation

mass of

cannot

department

but

new

means that

we saw one of

conditions.

to val-

each department--which

reproduced

merely

in

would

the

of

the

exchange

terms

profit

demand for

magnitudes

when we examined

causes

not

on that

of

price

of
value

however,

profit.

of

yet

simplified

composition

but

Here

unequal

we have
I,

II's

profit,

question

according

we saw a growing

rate

values;

rate

place

regard

the

two departments

capital

I.

And so there

unequal.

this

of

because

in department

we uncovered

these

exchange

precisely

total

general

between

place

basis

and IIc,
tion

in

embodied

of

basis,

department

in

take

the

rate

this

surplus

department

between

exchange--that

of

wards over-production
dictions

the

with

basis

real

general

was when we distributed

It

line

to

In

examined

entire

meet

on a value

values.
in

value

to

the

of

then

were

a general

occur

IIc.

to

equal

the

be able

of

+ 1038.7s

as when we first

and exchange

The existence

ance.

is

redistributing

have:

we will

+ 519.3s

The existence

for

as a vehicle

+ 519.3v

same result

production.

accumulation

+ 1038.7v

I(v+s/x)

we see that

we have obtained

this

of

capital:
+ 3116.1c)c

3895.1 fixed
capital:
1558(389. Sf + 1168. Sc)c

II.

acts

basis

on the

production

the year's

spite
we have
II

of

the

still

requires

188.6,

or

1688.6.

-263is

This

deficit

an overall
that

assumption

commodities

The question
tire

of

composition

of

in terms

of

lowed that

sizes
of

to

or needed

could,

takes

accumulation

is under-production

value

in

wise

lead

accordance
to

this
I,

distributed

is

again

fit

of

1125.5;

to

means of

that
of

fixed

1688.6,

I's

lead

to

is

production

value

the

but

for

have

II
with

than

is,

requires

however,
to

II

for

a substantial

to

be

has grown

of

14,541.8,
of

profit,

p',

earns

a pro-

5583,

receives

+ 562.8p(a)
216p(a)
+

+ 562.8p/x
216p/x
+
by 43.5.

far

greater

the

means of

in

product:

+ 1038.7v
+ 519.3v

greater

other-

it?

capital

capital

final

surplus

would

has still

year

is

IIc

the

overcome

The rate

1558.

the

profit,

over-production

not

first

an advanced

with

of

product--counter-

The total

is

even where

profit--which

expected

this

department

of

exchangeable

whose capital

I can sell

it

of

to

showed an

what

rate

fol-

then

according

redistribution

deficit,

during

+ 3116.1c)c
+ 1168.5c)c

which

capital.

leaving

II,

We then

department

of

the

I,

department

= 1601.5,

mand for

fund

Department

4154.8(1038.7f
1558(
389f

I(v+p/x)

rate

It

we see that

a general

two departments.

surplus

432.1.

of

I.
II,

plus"

The total

of

II,

conditions

I actually
to

en-

department

value

as compared

general

produced

the

department

the

reduce

value

surplus

Will

increase

or merely

7.74%.

a profit

this

with

between

20,125.

I.

under-production,

The surplus

to

in

a sizeable

total

basis

in

the

organic

equilibrium

Now, however,

on the

that

two departments.

the

production

purchase.

place

there

department

means of

I than

restored

the

values.

and when the

department

departments,

the

of

one year,

between

even on the

When we assumed

production

when we redistributed

over-production

balance

of

in

130.6,

of

their

at

this:

in

over

a value-exchange

the relative

II

is

was lower

prices

production

exchange

answer

turned

capital

the application

means of

would

we must

capital

constant

of

latter's

production

shortage

of

II's
than

de-

total

"sur-

this

accumulation
equal
87.1.

in

price

The redis-

-264the

surplus

reduce

its

of

tribution

I to

allows

ly enough to
cial

work

we will

process

= 562.8,
= 216,

Ip(a)
IIp(a)
Arranging

the

I.

II.

Here,

of

rate
but

production,
that

accumulation

is

this

initial

the

or

year

of

for

a further

z=
z=

40.2
20.1

an artifi-

the

of

by near-

not

not

profit

schemes,

three

years.

I(v+s/x)

of

total
I,

3.3

the

would

Hp

means of

Year

= 584.6:
= 224.4;

x=
x=

in

the latter,

1618.4,
Ip

= 1752.9.
means of

of

rate

product
+ 584.6p/x
+ 224.4p/x
I's

and

total

capi-

profit,
In depart-

= 1169.1.

The final

production

values,

the

the

exchange

when calculated

between

into

+ 1078.9v
+ 539.4v

overall

deficit,

place

+ 3236.7c)c
+ 1213.7c)c

of

the

take

= 15,104.6,

= 448.8.

Deficit

over

+ 539.4s

previous

is

value

capital

= 5799,

+ 1078.9s

a deficit

is

over

surplus

1663.5.

of

+ 539.4v

Converting

4315.6(1078.9f
1618.3(
404.6E

--I(v+p/x)--=

4.9

production.

capital

+ 1078.9v

There

exchange

In department

demand for

crease

of

that

20,903.8,

I.
II.
II's

= IIc.

an increase

ment II,

accordingly:

capital:
+ 1213.7c)c

assumption

7.74%.

I and II

4045.8 fixed
1618.3(404.6f

not prices
is

in

capital

120.6,
45.2,

y=
y=

capital:
+ 3236.7c)c

too,

on the

402,
150.7,

so x=
x=

10,789 fixed
4315.6(1078.9f

of 135.5,

Year

figures

general

Two :

Year

tal

means of

the

To demonstrate

our

the

out

of

it.

either

to

according

deficit

eliminate
of

result

value

is:
+ 584.6p(a)
+ 224.4p(a)
supply

exchangeable

production

= 90.4,

an in-

One.

Three:

Ip(a)
IIp(a)

The new arrangement

production
I.

II.

of

417.6,
156.6,
the

capital

y=
y=

125.2,
47,
in

both

z=
z=

41.8
20.9

departments

is;
11,206,6
fixed
capital:
4482.9(112lf
+ 3361.9c)c

+ 1121v

4202.4 fixed
1680.7(420.2f

+ 560.3v

capital:
+1260.7c)c

+ 1121s

+ 560.3s

after

the

year's

-265(the

slight

places).

The deficit

of

change of

values,

IIc
=

I(v+s/x)

is

difference
means of

is

due to

production,

1821.9

1681.5
-

prices

of

rounding
basis

on the

= 140.4,

decimal

off
of

an increase

an ex4.9

of

over

Year Two.
into

Converting
total

value

surplus

15,689.2,

I=

department

and lip

6023.4,

means of

The deficit

1782.2.

the

over

crease

rate

of

year

in

Capital

department

in
II

is:

product
+ 1121v
+ 560.3v

+ 607.2p. x + 607.2p(a)
+ 233. lp/x
+ 233.1p(a)

= 1821.9,

production
means of

Capital

= 21,712.8,

capital

= 7.74%.

profit

= 1214.3.

The final

preceding

of

total

I's

while
= 93.7,

production

supply

now =

again

an in-

once

3.3.

of

Four:

Ip(a)
IIp(a)
Arranging

= IIc.
exchange

into

surplus

department

value

1=

and lip

year

= 484.3.

of

of

The deficit
of

3.3.

of

5.1

over

the

and Ip
This

rate

= 1261.3.
gives

production
means of

difference

97,
=

II

of:
+ 630.7p(a)
+ 242.2p(a)

+ 630.7p/x
+ 242.2p/x
while

in

Capital

department

in

product

= 22,553.1,

capital

7.74%.
=

Capital

= 1892.1,
production

total

profit

a final

+ 1164.4v
582v
+

(the

on a

figures).
the

of

based

production
Three

Year

significant

production,

4656( 1164E +
3492c)c
1746(436. Sf + 1309.5c)c
means of

means of

of

to

off

= 1746.4,

+ 1164.4s

+ 582v + 582s

a rise

prices

43.4
21.7

z=
z=

departments:

deficit

rounding

16,296.4,

demand for

1795.1.

130.1,
48.8,

y=
y=

capital:
+ 1309.5c)c

= 145.5,

Converting

I.
II.

both

The overall

is once more due to

6256.5,

in

capital

4365 fixed
1746(436.5f

I(v+s/x)

total

433.7,
162.6,

x=
x=

fixed
11,640.3
capital:
4656(1164f
+ 1164.4v
+ 3492c)c

II.

value

= 607.2:
= 233.1:
the

I.

last

and Ip

= 466.2.

II Is demand for

II's

the

1121E + 3361.9c)c
4482.9(
1680.7(420.2f
+ 1260.7c)c

I.
II.

Year

= 1681.3,

the

production,

I's

supply

an increase

now =
over

the

-266These
of

of

under-production
the

timate
the

assumptions

are

two

outcome

in

this

in

be the

will

It

arrested

scheme for

it

and substitute
that

(assuming

plus

of means of

of prices

10: 1, while

organic
in

department

of

partment

in

II
in

years,
I

of
(any

department
the

II

the

remained

while

There
the

altered

the

of
organic

two,

compoof

prices

differential

between

arithmetically,

to

means of
to

we were

more,

about

0.6-0.7.

production

take

the

was

follow-

department
capital

II

department

This

would

of

labor

II

it

would

In

the

in

application
grow margin-

first

is,
times

not

erase

the

be presuming

that,

had

remained

grown

over

unaffected

that

this

the

that
undera perin

astronomically
by

it

I rises

department

three

would

feas-

place,

than

better

sur-

mathematically

as before--that

that

than

the

with

surplus

capital

stays

climbs
less

I).

47.4

Although

to

find

same) we had an initial

this

of

we would

section,

realistic.

composition

ratio

this

approximately

What is

productivity
in

on

+ 1000s

one we used

of

organic

that

underes-

conditional

the

the

of

in

year--by

composition

production
iod

the

production.

the

not

schemes,

for

least

If

+ 1000v

a scheme is not especially

that

we must

I:

production

to

Yet

significant

is

at

a surplus.

capital:
+ 8000c)c

for

suffer

The deviation

larger

be possible,

department

year

such

requires
to

of

from

ible,

least

we chose

the

greater

department

to

capitalism

seriously

departments.

the

of

into

fixed
1.20,000
10,000(2000f

ally

have

the

figures

should

and converted

rate

for

reproduction

would

an average

completely

a scheme where the under-production

construct

ing

the

up

and by far

each

are

of

investigation.

particular

capital

results

that

our

these,

the

and IIc/v.

Ic/v

of

existence

tendency

setting

particular

of

has to do with

from values

in

the

production,

of

these

which

part

The first

of

means

we made

factors
of

sition

to

extent

that
inherent

the

reverse

cannot

profit

from

indicate

calculations

de-

devel-

-267-

opment
reversal

it

(which

will

units

of production;

ed to

labor

employed

be so many times

By the

ratio

fixed

of

increase
to

in

the

department

II,

the

does

and

composition

of

Far more important,

to

the

volume

of

of

exchange

in

of

the

all

between
tion
of

we derived
production,

makes

no

IIc.

dictate
and

difference

is

not
to

the

I(v+s/x)

in

in

Yet
that
just
our

and
this

the
I(v+s/x)

IIc.
result,

limited

so

long

II's

as

and

in

materials,
constant

of

the

of

initial

the

demand

that
equality

an

total

dealing

pertains

expanded

Chapter

rise

department.

for

we are

extend

be noted
with

per

a sharp

which

we began

show

one

should

conditions

We will

to

factor,

It

IIc.

equal

that

department

chapter

new

part

than

second

raw

of

more

year

does not

circulating

being

must

positing

value

realistic

no more
capital

we used

and

capital

that

we assumed

between

schemes

I(v+s/x)

possible

by again

however,

production

levels

is

that

I.

a production

of

to

order

so that

capital,

only

the

in

not

will

I also

course

up

employ-

department

the

make

of means

it

I,

department

the

of means

well-equipped

here

outstrip

lower

that

department

constant

itself

not

department

production

means of

it
tech-

modern

production

with

it

in

While

in

large,

posit

to

new fixed

that

etc.,

assumption

organic

had to
II

in

is
of

the

in

circulating

This

goods,

capital--an

to

efficiency

of

new scheme for

absorbed

capital.

intermediate

in

is

capital

circulating
unit

fixed

of

ratio

department
the

same token,

I than

in

produc-

composition

with

along

of

IIc/v.

sharply

place

be higher

will

for

tendency

the

and

department

takes

as we have

greater

Ic/v

mechanized

the

and while

power

organic

intensive),

labor

indeed

Production

of production.

change the

be more

means

the

rises

in

has become greatly

of consumption

overcome

labor

be higher

to

for

The

assumption.
of

beetween

of

will

tend

figure

disparity

the

an unrealistic

under-production

absolute

productivity

and that

nology,
II

the

that

true

to

simply

towards

the

to

but

I,

department
is

due

was not

tion

tendency

the

of

is

This

technology.

of

reproducfor

9 that
with

means
this
a

-268-

value

purely
initial

the

over-production

and that

this

partment

II

fit,

the

its

share

of

the

it

and the

original

is

this

dealing

of

the

with

on p.

between

the

capital

in

total

capital

to

equal

culating

capital

The entire
I.

II.

that

in

to

of

order

take

this

in

the

scheme,
first

to

means of

and apply

year

there

the

to

for

with.

when

to

the

scheme

capital

of

instead

of

assumlet
II's

equals

I(v+s/x)

If
have

turn

to

adjust
of

composition

organic

production

of

fixed

to

cir-

capital.

variable

this:

+ 576s(a)

+ 576s/x

+ 523.3v

figures

in

existing

+ 1151v

worked

Conversely,

was 1726,75,

ratios

like

look

new problem

both

I(v+s/x)

We would

pro-

schemes

two departments,

that

retain

of

value

this

But

the

which

one and the

the

our

composition
I.

of

be 1151.2.

then

in

us go back

organic

I such

production,

capital:
+ 1177.5c)c
of

de-

will

so deceptive

result
Let

funds

rate

advantage.

department

in

11,510 fixed
capital:
4604(llSlf
+ 3453c)c

all

the

department

and total

3924 fixed
1570(392.5f

year

The advantage

value.

between

profit.

exchange

in

I,

four

from

average

and IIc

makes the

than

will

scheme would

We have rounded
were to

Iv

capital

I(v+s/x)

There

means of

figure,

this

equals

find

rate

255 above.

demand for

an

every

each department

surplus

continuity

that

average

in

was an additional

exposition

a deficit

total

recur

capital

Marx and Preobrazhensky

that

II

us adjust

of

the

with

social

analytical

department

the

a transfer

production

between

in

lower

will

with

two depart-

the

of

consumption

dealing

of

total

same simplicity

presented

the

volume
the

the

even

I.

schemes

simplicity

means of

that,

funds

exchange

necessitate

equality

showed

the

when we are

since

was that

ing

true

not

of retaining

is

turn

however,

determine

it

of

department

to
is

This

in

will

demonstrate

we will

between

proportionality

ments,

Its

There

analysis.

the

prices

+ 261.6s(a)

+ 261.6s/x
sake
of

of

Now,

clarity.

production

was an over-production

if

to

it,

of

means of

we

we would

-269of

production
Thus

year.
in this

crises

that

tendencies

dangerous

the

was trying
fixed

tional

then,

accumulated,
be able

to

a transfer

provide
of

that

"one-time"

ited

as his

process,
duction

in

other

this

of

into

means of

production

important,

however,

way we have

duplicated,

the

problem

the

of

are

such
ex-

developmen-

factors,

illumin-

out--is,

we think,

time

of

addi-

maintian

pro-

fixed

that

of

even
that
albeit

to

of

the

construct

greater

value

by proceeding
in

not

will

without
in

more,

general

just

is

Preobrazhensky

production

is

capital

obverse

production--whose

fact

means

production
What is

I.

is

there
of

production

means of

an-

demand for

and society

out

the

Preobrazhensky

reasons,

which

under

directly

is

production).

constructed

whatever

over

new means of

by the

having

department

means of

point--arises

explained

for

quantities

forces

shortage

starting

Even more
ysis

sufficient

demand for

and is

worsen

to

a demand and still

conditions

will

break

an initial

shortage

the

given

productive

this

for

if,

structural

deficit

this

terms

value

or

capital-

them. )

such

shown that

depart-

them a "holistic"

other

might

given

meet

schemes

gen-

be a

to

that

means of

opposed

with

crises

good reason

could

in

crises--as

of

the

form

the

seek

was how society,

We have

of production,

to

place,

capital,

a temporary

that

first

In

of

combination
which

is

there

solve

portionality.
either

under

way we did.
to

in

of

objectification

Nevertheless,
alysis

causes

might,

conditions

ate certain
a highly

immediate

that

the

have

per

outlined

with

would

phenomenal

warning

tools

we have

2.5

I and towards

over-production

constant

analytical
the

of

(i. e.,

our

There

the

explain

tendency

department

of

by about

grow

when we dealt

capitalism.
out

helps

take

repeat

abstract

planation

pure

would

the

of

we found

what

capital

that

usually

(Here we must

tal

of

a factor

ment II,

highly

under

transfer

systematic

ist

profit

of

to

similar

it

more,

be a reversal

would

chapter,

rate

eral

there

What is

73.5.

about

pos-

accumulation
means of
are
with
form,

pro-

required.
our
the

analsitua-

-270that

tion

was just

there

Here
gardless

dustrial

one of

findings

labor.
effect

socialist

production

brings

the

Likewise,

the

the

but

main

is

that

of

means

it

their

for

is,

that
of

constitutes

Union

found

itself

for
our

still

means of

where

production,

pri-

this

increasing

during

improvement

to
great

period

di-

any inon an ever-

not
in

only
technique,

productivity

was precisely
its

is

growth

the

the

In

takes

re-

basic

the

schemes

abilities

one of

show that

remains.

a constant

this

they

production

that

respective

and socialism--and

Soviet

type

fact

the

with

vehicle

is

it

growth

tween capitalism
which

of

important,

Soviet

the

of

It

quantity,

this

1920's,

we make in

modifications

importance.

makes it

that

the

shortage

extremely

are

an economy

economy

increasing

in

Union

a structural

whatever

lemma facing

Soviet

capital.

our
of

the

such

fixed

of

marily

in

existed

of

social

anticipate

and

differences

be-

the
of

impasse

in

primitive

accumulation.

NOTES TO CHAPTER 7
1.

Capital,

2.

To the extent
that
conthat
circulating
comprise
some commodities
help
into
they
produce,
the
values
stant
use
capital
enter
wholly
is
to
related
thus
the
the
of
c
portion
and
value
of
circulating
the
in the course of the year,
the number of use values
produced
the
introduction
of
ratio
cause
could
machinery
of more efficient
But
fall.
this
fixed
can only
to
to circulating
c
of
components
it
brings
an autoif we assume that
take place
with
accumulation
i.
labor,
in
e., that the additional
the
matic rise
of
productivity
fixed
number of commodities
out a greater
capital
always turns
in
during
is
warour example,
that
the year,
not,
an assumption
in
the
proit
ignores
In
a
rise
ranted.
effects
what
addition,
For
ductivity
labor
has
capital:
of
on the value of circulating
the
value
the
it
became
economy,
throughout
as soon as
generalized
c
of
forming
portion
the
circulating
of the individual
commodities
as
in the same proportion
though not necessarily
would also fall,
in
is,
the
(that
same
in the productivity
labor
the rise
not
of
for
the
demanded
them
increased
of
proportion
as the
quantity
it
Also,
during
the year).
greater
mass of commodities
produced
individual
is important
commodity
the
to
the
of
not
case
confuse
of
If
the
productivity
with that
of the annual
product.
social
of
labor
generation
the
rises
efficient
as
result
of a new, more
combeing introduced,
then the value of the circulating
machines
the
value
but
about
this
ponent of c could well
nothing
says
rise;
the
worn
of
the
value
of the annual product,
entire
which contains

II.

P.

473.

-271and all
of the value of
out means of production
The only "absolute"
law we can speak
expended.
individual
of the
ery case, that
commodity
as
labor
the share of living
tend to
product,
will
discussion
For an additional
of this
point,
see
260-62.

the labor power

in evof is that
Nell as the annual
fall
over time.
III,
Capital,
pp.

3.

is similar
Once again,
this
to Marx's
the
value
can rise
while
of surplus
falls.
the total
productive
capital
and p. 177, above.

4.

Capital,

5.

idea of the validity

Wg can obtain
a very general
of this
argument
from statistics
in gross outon the share of wages and salaries
industry.
This is in no way an accurate
put in British
reflection
" but it will
composition
of capital,
of the "organic
not be far
proportions
off in showing us the relative
of wages in the productive
in industries
devoted
to producing
capital
employed
means
In 1973
of production
and means of consumption,
respectively.
the "Census of Production"
showed that
wages-as-a-proportion-of
in those indus1.5 times higher
gross-output
was approximately
II than in those we would
tries
we would classify
as department
"Fact Service,
I.
" (Labour
Research Departcount as department
38, Issue 11,13
London),
Vol.
March 1976, p.
ment Publications,
44.

6.

Capital,

III,

III,

p.

pp.

discussion
of how the mass
in
share of variable
capital
See Capital,
III,
p. 223,

161.

260-62.

-272CHAPTER
MARX

The problem
aware

well
II

of Theories

fers

to

Surplus

alyzes

the

tion.

Preobrazhensky,

as a temporary

Marx asks,

amortization

This

lar

increase

expand his

the

(or

supplies,

have

must order

them,

he can use

them.

lem to
also

production,
these

will

actual

capital

in

Part
rean-

accumulafund

which

meet

society

extraordinary

other

in

new

our

for

on the
capitalists,

them

would

cause

one hand,

the

or

raw materials,

etc.,

pre-

etc.

he

before

and delivered
in

push
the
if

machine

he is

the
the

off

to

his

of

needs
feul,

All

for

depends

average

only

means

come from?

to

For

other.

etc. )

extra

interruption

a real

and would

on the

these

more machines,

for

for

concrete

capitalist
to

to

ready

manufacurer,

laborers)

be produced

to

and a regu-

raw materials,

builder,

Where are

present

own production

this

need new machines,

for

on the

who wants

machines,

years.

wants

labor

capitalist

textile

and

be available

army of

machine
the

whom our

capitalist

and wait
But

past

accumulation

means of production

the

subsistence

upon

the

of

must

reserve

for

cloth

their

power

additional

for

steel

he used

geared
If

years.

it

to

amortization

preconditions

additional

He needs

means of

capitalists,

cess of

find

must

what

the other

ceding

of

the

and thereby

Second,

contractor,

of production

II

productive

a constant

population.

(e. g.,

goods

and above

as a source

new labor

both

market.

the construction
over

fund

of

was

as we have seen,
where
/Marx
of Capital,

Volume

material

First,

operations

intermediate

the

are

requires

on the

purchase

discussion

treated

Marx

new.

capital.
what

of

not

from

production

expanded reproduction?
market.

certainly
lengthy

Marx,

reserves

extend

fixed

demands for

probably

of

FUND

Preobrazhensky,

following

source
help

use to

could

the

of

use

is

a fairly

value.

passages,

similar

THE AMORTIZATION

with

and devoted

of

OF

USE

dealing

we are

it,

of

ON THE

proprob-

builder
extend

-273his production

in

He, too,

would

have

to

order

for

them

to

be produced,

ital,

wait

delayed
be
would
is

production
their

to

order

only

these

down the

right

if

possible

demands

the

meet

of

our

new elements

of

etc.,

line.
all

It

first

capitalist.

his

productive

and so the

whole

is

that

obvious

capitalists

cap-

process
expanded

simultaneously

re-

extend

production.
Just as the production
in one
and reproduction
of existing
capital
in other
parallel
production
and reproduction
sphere presupposes
in
so accumulation
or the formation
spheres,
of additional
capital
presupposes
one branch of production
simultaneous
or parallel
crein other
branches
products
of additional
ation
of production.
in all
Thus the scale of production
spheres which supply
constant
(in accordance
must grow simultaneously
capital
with the average
by the demand--of
participation--determined
each particular
sphere
in the general
growth of production)
and all
spheres which do not
for individual
produce finished
products
consumption,
supply conimportance,
Of the greatest
is the increase
in mastant
capital.
(tools),
for,
if
chinery
and auxiliary
material,
raw material,
industries
into
these preconditions
are present,
all
other
which
they enter,
they produce
whether
or finished
goods,
semi-finished
only need to set in motion
more labor.
for accumulation
It seems therefore,
that
in all
is
ous surplus
spheres
production

Marx maintains
at

least

part
fixed

namely

money for
laid

out

its

a hoard,
which
one,
fund,

the

is

worn

this

specific

which
is
size

the

when fixed

capital

is

bought,

equivalent

to

its

time

to

one of

the

the

fixed

his

fund,

central

in

amortization

the

order
functions
fund

capital

to

every
sinking,
extend
of the

may not

marketthe
is

value,
some years

money an equiv-

he will
to

10

lasts

capital

which

fixed

means that

in

receive

each year,

in

for

be repurchased
will

buy more

This

out.

is

If

he can "borrow"

of

in

capitalist

has a monetary

capitalist

from

reality

it

where

on hand

need not

one tenth

capital

constantly

depreciation.

back

get

until

the

continu-

productive

of

we assume
it

but

year

year's

has just
the

which

one go,

he will

is

As we know,

Every
that

one element

new supply

purchase,
in

all

for

years,

the

of

is

there

capital.

afterwards.
alent

that

to take place,
1
necessary,

replace
but

year
or

as

retain
that

the

amortization

production.
credit

last

In
For

system,

be sufficient

to

-274allow

that

year,

especially

particular

ever-larger
circulating

capital.

funds

tion

of
to

available

try

is

new fixed

far,

is

that

the

of

quantity

propriate

points

intermittent

ity

in

that

other
yearly

all

waiting

Obviously

by nine-tenths

production

to

is

Nor
it

take

fixed

capital

year,

even under

in

the

he going
up again

year

ten.

conditions

to

in

the

needs,

and at

simple

in

ap-

purchasers

10 years,

as an
fixed

producers

of

If

a machine

builder

theory

have

only

in

and tear,

fixed

not

In real-

10,000

is
for

going

to

the

initial

for

nine

10,000

in

fixed
i. e.,

pro-

each year

again

production

reproduction,

to

capital

he has produced

another

aver-

customers.

is

builder

its

and if

need be bought

produce

the

the

10,000

He will

the

while

the

and produce

of

be produced

once

wear

discontinue

purchasing

to

if

after

cap-

so

original

machine

other

it

his

capital

of

elaborated

for

since

no fixed

one time,

10 years.

ed capital.

supply

even do that,

in

average

but

10,000,3

say,

he would

this

of

stock

worth,

as a hoard

means of

that

production.

then

as a replacement

at

in

capital

equivalent

is

acquisitions,

engaged

10 years,

expanding

their

one-time

the

capital

answer

indus-

modern

serves

owner

and made

system,

of

as we have

this

amortiza-

"2

of

problem,

society's

replace

fixed

that

How is

may only

is

he does not

chased

our

Marx's

and sells

the

But

time?

of

its

of

has been placed.

matter,

credit

development

hands

the

the

meet

constantly

age durability

after

it

supply.

series

duce 1000,

in

not

the

money no longer

this

the

can be pooled
of

the

with

an

and variable

however,

system,
together

any given

necessitates

and constant

development

parallel

of

to

capital

produces

the

capital.

necessary

are

"With

however

and thereby

credit

capitalists

in

production

machines

of

production,

one side

this

capital

the

whose disposal

at

of fixed

Through

runs

but as capital;

This

of

others.

and capitalist

italists

investment

a number

necessarily

which

develops

as capitalism

initial

increase

to

capitalist

puran-

cut

his
fix-

years,

replacement
capital

every

presuming

no

-275This

accumulation.
first,

the

lowing
to

sale

all
of

own scale
of

his

in

new

purchasers

every

and

each

staying

find

he must

is

business.
buy

is

each
and

accumulate

this

Simply

to

produced

to

more,

have,

will

capital

who need
What

he

average

fixed

capitalists

production.

even

on

in

9000

some

other

that

means

9000

this

for

ready

and

their

expand

a necessary

by maintaining

fol-

year

condition

his

"superfluous"

level

old
product

year.

Thus

invested
in this
even the mere reproduction
of the capital
in the remaining
requires
continuous
accumulation
sphere
spheres
But because
of production.
of this,
one of the elements
of conis always
Here,
tinuous
in
accumulation
available
on the market.
if
is rethe existing
one sphere
of production--even
only
capital
in this
produced
sphere--exists
a continuous
supply
of commodities
for
for
industrial
in
accumulation,
new,
additional
consumption
4
spheres.
other

We must ask,
capitalist

of

tion,

which

fixed

capital

equivalent

as a whole?

There

we have

the

of

used up in

that

that

at

already

Thus

at

their

with

the

last

nine

years.

10,000

the

of

fixed

in

stock
of

that

output

fixed

10,000

while

of

machine

over

and above

that

has

turn

as

who builds
fixed

capital,

he is

in

has been
fixed

of

func-

to

one of

society

an

selling

which

started

which

of

value

accumulated

continue

nine-tenths

builder

that

users

society's

in

amount

equal

stock

capital

them has purchased

our
is

one tenth

kind,

of

production

capital

society's

is

equiv-

reproduc-

the

capitalist

worth

capi-

of Marx's

simple

must

which

current

social

basis

we saw that

capital
our

total

Each year

each

however,
his

we take

the

under

any one time

fixed
if

capital
There

examined.

he sells

year,

fixed

of

different

a monetary

is

This

individual

the

accumulating

times.

all

replaced

one tenth

tion

and that

simply

still-functioning

replace

Suppose,

or

replacement

as representing

equivalent

prise

society

physically

each year

capital

for

capital

as money.

machines

solution

replacing,

we have

of

a hoard,

does Marx's

fixed

their

own analysis

for

to

investing,
of

extent

what

apply

talists
alent

to

the

a new enterprevi-

-276ously

hoards,
and
ments

is

society

by 10,000

ital

go to

simply

builder,

labor,

that

versus

is

is

the

ular

the

addition
of this

fund

on the

social

the

of

product,
fixed

of

we also

cap-

if

time,

society

no

will
had bought
have

will
that

recall

our

to

soci-

instruments

of

addition

and then

carry

constant

capital

that

i capital

is

on production,
be

will

capital
amortization

side

for

society

fund

the

funds

adds

100 to

these

fixed
ever-inin

come up against

of

of

of

meet the

to

question,

both

new fixed

of

replacement

adequate

source

given
We have

five

years,
that

society
the

of

supply

our

to

what

extent

to

allow

for

reg-

by referring

questions

page.

we presume

reserves,

of

we have

a sufficient

and that,

year,

is

capital

other

perpetual
rate

unequal

capital,

following

assumed

this

extent

what

by 10 each year.
fixc:

of

his

customers

required

begin
stock

We can answer

on the

monetary

to fixed

to

On the

In addition,

year.
past

first

first

to

old

a real

himself

capital

production

however,
If

fixed

that

yearly
his

stock.

production,

new fixed

amortization

We have

his

who was creating

constant

demand for

table

scene,

capital

the

out

accumulation?

to the

in

arises

discussion.

prior

After

replace-

larger.

circulating

creasing

10 years.

interim,

to

The question
capital

next
the

of

for

consumption

the

etc.,

buyers

productive

In

means of

in

its

before.

increase

a bit

quite

finds

machinery

fixed

10,000

of

out

raw materials,

the actual

supply

actually

balance

normal

worn

as someone

of

supply

ety's

the

the

its

to

the

come onto

from him 10 years

machine

for

replace

added 100,000

he

that

a year

new producers

other

an extra

increasing

actually

to

addition

is

there

Presuming

year.

every

in

Then,

consumed.

first
to

expanded
also

somehow,

had the
five

finance

either

but

the

depreciates

it

money to

years,
all

that

through
pay for

thereafter

subsequent

stock

capital

reproduction,

assumed

so that

fixed

its

augments

this
life

average

by 20% each
or

credit
these

additions

had to

accumulation.

rely

--WN

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-277us first

Let

fixed

ment of

look

grows

Let us assume that

just

which
capital

110 in

need.

And so on all

but

the

satisfy

two,

year

yearly

the

first

the

replace
this

demand for

builder

have

only

will

in

an enterprise
the

latter,

fixed

which

must invest

in

tal

then

that

thereby

ever,

to

serve

will

yearly

cover

the

to

continuing

will

work

the

well

same problem

be able

to

Machine

builder

to cover

the

offer

200 in
number

replacement

yearly

will

until

his

overall
the

reappear.

machinery
two will
of

five

first

the

(the
have

of

start
150.

of

Society

from

This

capital.
as did

100,

our

year--this
fixed

Meanwhile

our

by 10 per

year

These

150 purchased

accumulation

the

builder

Machine

launch
of

all

10.

year

fixed

to

new fixed

for

If

The production

successive

own production

end of

6).

machine

builder

of

of

but

capital,

the

fixed

years.

needs

table),

our

enough,

output

replacement

expanding

enough

no longer

each

however,

1 (Column

ongoing

produce

in

social

new demand for

the

a yearly

output

the

is

will

in

capital

allow

own out-

point,

new fixed
year

fixed

his

total

six

a new machine

years,

comes

100 in machines

that

year

in

cover

to

with

these

cover

At

150 in

place.

capital

the

capitalist.

that

off

his

continue

of

first

our

five

in

start

find

to

takes

demand for

cover

five.

only

adequate

start

was purchased

capitalist

This

will

and add 10 to

would

to

first

the

to

year

to

over

a new enterprise

second producer
first,

enough

we see

and expands

replacement-fixed

was quite

for

capital

just

have

addition

fixed

increased

accumulates,

50 left

And so we would

capital.

year

100 he produced

he satisfies

years,

he produces

not

no replace-

any replacement

too,

needs

five

first

150 (the

as a whole

first

Because

of

way through
to

the

society's

again

output

economy

now has to

to

supply.

production

the

Now, he,

put to

he ups his

In

of

before

increased

this

2).

for

considerably

enough

(Column

question

necessary

builder.

from our machine

are

is

capital

production

that

the

at

At

number

150 will
machiiic

first
year,

capital.

that

11 in

capi-

how-

time,

one will

Column
be just
builder

2).
enough
num-

-278the

ber one at

builder

machine

of

as before,

producing

from year
very

start

first

once,

replaced

machine

building

the next

five

need

factory,

every

what Marx said

year

period

that

built

fixed

in

time

its

replacing
the

first

the

would

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now the

this

been

already

be short

again
build

to

a third
for

replacement

stock

Although
of

fixed

100 in

the

all

in

five
capital

first

fact

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but

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pro-

require
production.
as long

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new enterprise's

output

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goes to

to

we see that

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stands
replace

340,

the

have

our

100 in

now worn

to

340,

we begin

to

out

capital
and,

things
and there
into

run

must make

capitalists
fixed

20%

is

it

until
five

year

grown

however,
at

of

we have

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will

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has

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it

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table,

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The fund

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fund

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in

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Up through

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society

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any new enterprise

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capital.

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fund,

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We see from

of

the

of

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necessitate

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have

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demand for

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of

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generation

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cumulative

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(via

produced

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capital

reproduction

social

amortization
at

the aggregate

of

the

of

simply

called

the

capitalist

simple

demand is

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of the value

two).

Society

on

expand

capital

and which

capital.

point.

merely

were purchased.

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one,

would

individual

a certain

expansion

increase

As to

number

whose output

the

capital

life

builder

invests

five

about

up to

only

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as the

fixed

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renewal.

it

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year

a second

capital,

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But this

in

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years.

In fact,

duces fixed

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by 100 in

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and to

builder

each machine

be able

will

one)

onwards

If

six.

society

number

six

year

at

they
the

end

-279of the

production

capital,

worth

the close

100,

At the

start

had a balance

the

This,

of

course,

to see if

the

fund

or 260 in

In year

come the

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at

to

in

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balance

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replacement
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390.

of

accumulation,
150 in

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So in money

fund

addition

buy

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to

150.

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grows.

year,

amortization

can sustain

monetary

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Once again,

fixed
year

of

capital,

year

augmented
of

eight

248.

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(130 to replace

six

stands

The only

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for

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fund.

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fund
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out

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deficit

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eight

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shows

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220 in

requirements

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point
In

year

capital
the

a
300

capital).

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32

making

eight,

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at

of

purchases

capital

of

280,

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plus

depreciation

three)

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fixed

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growth.

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to

rises

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balance

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exceed

fixed

accrues

support

worn

don't

depreciation

in money equivalent
comes in,

four's

at

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has to

this

32 at

depreciation

hoard

purchased

of

move into

depreciation

year

The money balance

purchase

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fund

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upon

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is

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monetary

capital

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In year

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160.

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a balance

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to

equal

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110.

to

fund

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must

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amortization

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the

of

leaves

8).

cumulative

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at only

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equal

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place.

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for

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year,

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(Column

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be scrapped

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240

have

capitalists

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must add the

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five,

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in

year

52.

of
is

be272

nine
stock

cumulative
on this

fund

-280are too

Total

great.
balance

monetary
repeats

the deficit

well

laced

the

at

fixed

end of

year

and must be replaced

purchase

of:

b)at

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in year
fixed

balance

our

deficit,
three

we see that

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190 in

capital

out

a second
year

to

must

cycle

finance

the

capital;

that

added

150 in

c)plus

and whose first

six,

440,

comes to

rep-

year

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ly

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a deficit

leaving

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The deficit
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disappears

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shows

problem

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of
year

existing

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the

the

deficit

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can erase

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amortization

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than

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half
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year

(458)

so great

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fund
fixed

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fund

capital

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demand for
to

for

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stock

of

close

(200),

year
in/13

we assume

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carry

eaten

capital

depreciation

the

covers
totally

If

on,

accumulation

at

depreciation

same pattern;

of

balance

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new fixed

exercise

solve

to

credit

can manage a positive

(270).

fund

is

of

can carry

capital

obtain

as before

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little

to

able

year's

purchases

even

fixed

of

Even though

more.

depreciation

partially

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another

ten,

year

all

12 shows the

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of

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fund.

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cumulative

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that

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are

cumulative

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cumulative

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capitalists

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six

the

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of

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that

year

was newly

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time

of

has now worn

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life

mushroomed.

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ten,

year

have

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the

fund

from

the

The same process

fund
amortization/wipes
out

210 in

capital
five,

to

in

100.

to

grows

deficit

and the

only

start

again.

a)At

capital

year

the

at

year

leaves

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upon

the

but

10,

of year

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The addition

but

enough,

added

capital

10.

320,

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end of

year

demands

Only now the

fixed

the

at
in

itself

purchases

can only
capital.

from

will

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always

It
yearbe

-281than

greater

of

assumption
fixed

society's
expanded

of that

added

in

that

the

is

point

This
show that

the

a partial

solution

remains.

It

the

basis

of

to
not

this

right

kinds

noted

in

of

of

that

be many times

der capitalism
is

the

limited
for

interesting

that

Marx,

the

draws

of means of

with

so production

that

in

of

the

the

the
is

it

for

the

of

from

on hand

demands

of

accumulation;

back,

crises

as under

of

the

fixed
of

capthe

surplus
vantage
expand

yet
of

of

Second,

this
is

production

value.
point
its

It

is

than

production
it

reserves
this

un-

surplus

will

expansion
And

over-production.

monopoly

the

and whose val-

it

that

the

production

production

that

must

have

held

prior

a different

of

ratio

society

of

to

threat

on the

means of production,

fact

Capitalism

each

place

themselves.

realization

in

via

as Preobrazhensky

constraint
the

still
for

provided

commodities,

is

persistent

either

those

re-

does

and represent

anticipate,

the

it

composition

size

commodities

by virtue
for

organic

an advanced

produce

same conclusion:

future

a given

contradictory

size

if

e. g.,

needs

The

the

but

product
takes

requires

Preobrazhensky,

the
it

future

will

sale,

production

need to meet
brings

in

the

both

however,
is

a surplus

a certain

value

stock.

itself,

production

also

must

value

that

we have

market,

fact

a certain

means of production

for

It

The New Economics,

the

be of

the

the

can be no more than

accumulation

and a given

must

use values.

of commodities

product

capital

than

the

replacement.

capital

The problem

structure,

from

cover

fund

of

fund

discovery,

amortization

because

First,

product

given

fixed

say that

technical

surplus

to

the

the

up for

possibly

With

stock.

greater

spectacular

problem.
to

to

cannot

production

constant

particularly

ue will

our

production.

ital,

the

of

parallel

to circulating

now coming

a very

enough

a definite

of

is

seem like

simultaneous,

branch

which

fund

old

addition

by necessity

and additions

employment

is

the

of

is

amortization

may not

replacement

five

year
one,

renewal

of

quirements

year

the

reproduction,

in

added

capital

for

need

capitalism,

or

-282leads

to

purely

themselves

tain

if

it
is

production

the problem

of its

this

plus

value.

avoid

is

and its

itself
act

of

each and every

period

tion

fund

eliminate

he simply

by the

some of

a genuine

its

to

over-

of

can at

claimed

problem

defined
The acbounds

the

surplus
it

problem

The use

makes the

our

of

realize

this

the

producas sur-

anew,
amortiza-

best

act

as a

economy more adaptable

it

was more than

that;

Nevertheless,

potentialities.
to

solution

need

difficulty--it

never

the

while

raises

reproduction.

which

"over-

must

nature:

beyond

capitalism

limited

Marx

demonstrated

are no nearer
uncovered

disturbances.

endemic

technique,

this

means of

and in Capital,

of

lever,

equilibrating

to momentary

of

kind

this

sus-

afford.

inherent

accumulation

of
Society

yet

Value

pushes

level

with

can never

shortages;

cannot

why Preob-

under-production

over-production.

Surplus

of

and

for

explains

cannot

constantly

The very

temporary,

of

chronic

accumulation

calls

This

profit.

capitalism

structure

which

towards

crises

Theories

capital

of

given

tion

to

in

of

cumulation

to

new construction

for

tendency

a "luxury"

both

Marx,

the

lead
is

of

production

that

would

production
produce"

given

held

razhensky

bursts

spasmodic

than

we

when we first

it.

NOTES TO CHAPTER 8
1.

Theories

of

2.

Capital,

II,

3.

We have

4.

Theories

5.

The New Economics,

6.

"The real
It
itself.
is
barrier
capital
of capitalist
production
is that
and
capital
appear as the starting
and its
self-expansion
the closing
that
the motive
the
production;
of
point,
purpose
and
is only production
the
for capital
production
and not vice versa,
of
means of production
expansion
are not mere means for a constant
the living
limits
The
within
process
the
of
of producers.
society
which the preservation
of the value of capital
and self-expansion
resting
on the expropriation
of the great mass
and pauperization

Surplus

of

Part

II,

p.

485.

Original

emphasis.

185.

p.

altered

Value,

Marx's

Surplus

example

Value,
pp.

II,

here.
p.

481.

66-67.

-283limits
into
move--these
come
alone
continually
can
producers
of
by
for
the
of
production
methods
employed
capital
with
conflict
towards
its purposes,
unlimited
extension
of producwhich drive
towards
towards
as an end in itself,
tion,
production
unconditionlabor.
development
The means-the
productivity
social
of
of
al
forces
development
the
of
productive
of society-unconditional
into
the selfconflict
with the limited
purpose,
comes continually
The
the
capital.
capitalist
of
existing
mode of producexpansion
for this
is,
the
a historical
means of developing
reason,
tion
forces
and creating
an appropriate
worldof production
material
between
is,
time,
this
the
a
continual
same
conflict
at
and
market
its historical
task and its
own corresponding
of social
relations
Original
250.
III,
"
Capital,
p.
emphasis.
production,

-284CHAPTER

If

the

anything,

is
I
ment

chronic

No matter

values

or

still

cumstances.

Nevertheless,
capitalist

labor,

replace

to

This,

ty.

tinues

is

it

in

italism

departs

reproduction
tal.

in

It

the

from

define)

do not

organization

of

of capitalism's
intense

schemes,

the

human labor.

not

the

certain

inherent

economic
and there

of

tendencies
them

literally,

real

problem,

productivi-

this

is

of

the
it

of

not

concontraand
When cap-

struggle.

class

not

it

political

course

will

Yet

and social

economic

be because

the

fixed

accumulate

capi-

adjustments
reproduction

schemes permit

us to

c's

of

a single

not

it

no problem

form

to
of

history.

or directions

resist.
analysis
They

of
draw

and v's,

the

to

any

bring

with

it

if

the

solve

cannot

The reproduction
possibly

cannot

can enlighten

development,

implications

but

"solution"

does not

that

problems

and to

this

of

embodied

it

is

is

labor

past

of

and readjustments

prepared

abstract

the

productivity

that

manipulation

sufficiently

complexities

To take

the

There

social

cir-

The ten-

same.

the

could

constant

simple

any similarly

reflect

more.

the

it

that

the

of

accumulation.

stage

whose outlines

conflict,
is

or

"proved"

entail

to

under-

narrowly-defined

capitalist

of

myriad

historical

so-called

social

proletariat

the

this

the

overcome

history

concrete

be because

must make (some of

the

describ-

production,

development
of

depart-

exchange

are

men with

further

The answer

schemes

will

of

in

commodities

most

problems

tendency

of

of

increase

to

does

spite

engenders.

to be found

the

capitalism

exist,

dictions

the

root

the

is

that

the

found

Preobrazhensky

which

prices

under

labor

stifles

as we see,

to

at

that

their

except

living

the

know that

we also

to

CAPITALISM

we have

we assume

development

itself

in machines,

than

whether

exists,

"PURE"

UNDER

under-production

according

accumulation

dency for

CAPITAL

fundamental

even more

17.
in
VKA
ed
at their

OF FIXED

ACCUMULATION

THE

but
from

us as to
nothing
them that

-285abstract

their

do--is

to

tempted

occur,

the

both

and one which,

our

point

of

view,

some of

does

as we have

brazhensky

of what they
schemes to
italism,

reveal

but,
the

socialist

some of

as we shall

Soviet

the

concrete

Marx himself
reality.

took

post-capitalist

have found

the

least
the

the

While

see,

of

the

is

a mere

not

not
Marx

tools
of

in

economic
and
from

itself

as literal

total

our

our

the
If

not

period

problem

so this

of

only

of

econo-

about

the

of
the

would

expandto

capitalist
adapt

well,

and

capitalist

formalisms

of

under-accumulation
call

ex-

any more than

perfectly

of

of

inadequate

proved

cap-

primitive

analysis

statements

analysis

the

to modify

development,

to

bounds

the

unprecedented

Marx's

bequeathed

Preo-

contributions

and its

abandon

capitalist

mean that

artifact.

flexibility

tendencies,

analysis

does

real

tried

to

This

and

why,

a purely

historically

1920's

the

and not

un-

value--

explain

exceeding

he continually

understood

world,

is

a heuristic

from

great

as Preobrazhensky
schemes

we must

view,

extricate

never

fundamental

the

schemes

breakdown

as soon as we con-

to potentially

one of

us,

phenomena

We must,

the reproduction

schemes.

when the

of

inev-

the

theory

point

them to

reflect

thought.

He did

accumulation.

ed reproduction

is

during

Union

to

contra-

accept,

a breakdown

at-

contradictions.

argued,

do tell

really

to

limited

At

of

imply

would

more than

to use

range

And when the

If

extremely

possess

Marxist

made to

retain

place.

economic

formal

analysis,

why.

them

adapt

basic

most

This,

my of

we must

essentially

a conclusion

be able

take

Luxemburg

and political

becomes

not

instance,

a whole

breakdown.

to

are

must

capitalism
its

final

explain

schemes

does

uncover
of

a philosophical

analysis--we

a breakdown

elasticity

to

moreover,

fact,

to

preposterous

factors

reproduction

cretize

its

their

of

level

that

too

for

warrant--as,

schemes

at

is

or

from

acceptable

plain

left

"outside"

invoke

the

capitalism,

end of

does not

if

if

that,

dictions

not

become a prisoner

to

We can use

structure.

itable

does

nature

into

question

the
we

-286Marx's
that

analysis

entire
the

given

premises

tendency

to a real

of

as an essential

level

of

analysis,

other

complexities
is

the

it

which

duction

and exchange.

ial

from

self

the reproduction
place

to

pect
the

into

The premises

tendencies

the

of

and external

system,

can never
organic

tions

still

around

to

doning

the
This

sion

of

our

was the
try

capital.
the

of

and the
the

of

further

on the

account

what

modern

form

credit

such

as a rise

amortization

period

production,

can be.

these

modifica-

we must

we observe

must

concretizations

inherent

conditions,

the

hand,

other

the

other

of

prices

for

an analy-

phenomenal

others,

ex-

leading

production,

of

took

indeed

we would

for

it-

with

and exchange

its

vagaries

proa soc-

similar

may demonstrate

allow

work.

sustain

abstract

the extended

If,

results.

too

at

capitalist

not

is

then

schemes,

capital,

due to

same time

could

explain

we must

in

the

at

is

founded
do not

they

of

means of

however,

an abstract

abstraction

sense"

value,
of

is

analytical

is

What we

tendencies

accumulation

application

to

events,

The situation

law

this

of

inadequate

schemes

it

speculation

and the

see what

must use to
of fixed

For

composition

may alter

are

but

be expressed

capital,

But they

system,

e. g.,

which,

of fixed

which

movements.

some of

in the

upon

of

society

capitalist

This,

end.

surface

value

under-production

a dead

at

"make

to

next.

the

of

system

inherent

recognize

schemes point

the

capitalist

the
If

basis

see persistent

system

sis.

to

change.

that

value,

law of

the

schemes.
on the

simply

of

which

one generation

premises

of

be impossible

without

abstraction,

law

Yet

the

or mask the

modify

would

without

constructed

Yet

on the

appear

the

with

are

characteristic

that

case

they

capitalism.

may not

We must

reproduction.

on which

within

discover

This

capitalist

before

be made,

look

aban-

altogether.
method

and find

Preobrazhensky
a solution

In this

accumulation

chapter,
of

fixed

to
the
capital

and it

adopted,
the

problem

the

one of

concluding
under

of

is

the

the

one we

accumulation
our

assumptions

discusof

an

-287and pure

abstract

the transfer

of

mollify

the

tion

this

of

capitalism,

problem

of

IV,

in

of circulation

a mixed

department

We will
to

famine.

system

continua-

of

concrete

as an introduction
will

prove

of

the

material

commodity-capitalist

can and does

the

This

analysis

through

I,

defer

the
it

treat

we will

prior

how capitalism,

to

application

goods
the

and requires

explication

II

where

Soviet

the

department

and its

Part

of

our analysis

examine

under-accumulation.

discussion
until

capitalism

from

capital

we will

or

to

a complicated
foundations

commodity-socialist

economy.

I.

The Use

in

make in

we might
these

Take our
in

7.

simpler

first

3883.9 fixed
1553.6(388.4f

Out of

its

augment
know that
form

of

stant

same,

ganic

fixed

in

capital

of

for

the

composition

to

fund

249,

that

work
is,

the

in

problem

its

modifications
essentials,

and

with.
and pro-

accumulation

after

year

it

could
proper

I to meet
grow

variable
of

I's

capital

the

must

of

194.2,

capital,

II's
to

capital,
this

and 41.6

II

have

supplied

II

or
in

of

138.7

which

369.9.
turn

calls

two

Given
for

in

with

We

confixed

division
fixed

thirds

and
stays

capital,
is

the

an unchanged
a rise

to

a material

circulating

proportions.

554.8,

in

quarters

this

138.7

IIc(c).

consisted

If

demand for

take

must

increase

to

fund

and three
not

+ 194.2s(a)

+ 194.2s/x

department

exchange

+ 517.85s(a)

+ 517.85s/x,

+ 1035.7v

+ 388.4v

capital,

fixed

as a whole

equivalent

and easier
p.

Otherwise

then,

the

capital:
+ 1165.2c)c

this

one quarter

capital.

I(v+s/x)

of
to

prior

circulating
the

stock

change

schemes we first

the

use

shown that

already

capital:
+ 3107.1c)c

accumulation

its

we will

year:

fixed
1.10,357.1
4142.8(1035.7f
II.

follows

We have

scheme from

the

Capitalism

them do not

schemes are

duction

that

Chapter

Pure

Under

discussion

In the
presented

Reserves

of

in

Ic

orby

-2881419.5,

which

wear and tear

lating

break

down into

of

new fixed

capital

in

I's

need a total

we would

of 3699 in

plus

means of

gainst

in

increase
better

Iv--a

be beyond

the

in

crease

Iv

the

enter

369.9

of

fund,

II

Now,

only

tween those
serve
tion

is

result

has

means of

of means of

554.8

production

is

fund

will

this

leaves

ponding
ital,

constant

clear

that

increase

rise
or

times

41.6
in

120.2.

capital,

we must

increase

This

of
will

of

as fixed,

question.
in-

actual
of

which

will

noted--equal

this
I's

actual-

rather

fixed

be-

output

and those
Yet

71.43%

of

would

and so we would

division

serve

II's

which
accumulaand

capital,

25% and 75%, as we had bewould

over-production
have

would

which
II

what

half

Is,

the

this

the

for

and not

This

that

a-

a growth

beg the

The reason
the

consist

through

that

to

same as before.

capital,

place.

I(v+s/x)

that

which

will

by 180.3.
to

I.

was the

capital

took

= 416.1,10
It

we assumed

constant

accumulation

of circulating

department

exchange

we already

exchange,

production

production,

is

in

latter--as

for

180.3

will

To say

rise

figures

these

employed

economy

a prior

new circulating

which

when we note

the

implies

means of

means of

circu-

depreciation

of

all

in

output.

any other

production

as circulating

21.42% circulating
fore

in
that

year's

making

of

new workers

mean an equal

will

Adding

1109.6

in

rate

the

of

additional

by 369.9

369.9,

of

bizarre

even more

Ic(f)

plus

the

or

the

output

some 5178.5

this

ly have over-production
peculiar

for

previous

means of

exchange

to 554.8.

capital,

of

the

becomes

The result

I's

equivalent

as the

by 3699.
in

value

that

of

an equivalent

total

83% of

than

growth

growth

subsistence

as the

and 1109.6

capital

fixed

additional

capital,

constant

fixed

total

369.9

presuming

this

as well,

unchaged

increase

Finally,

Ic.

of

portion

remains

up,

will

be entirely
by 3/4

increased

required.
start
If

from

138.7

cause:

of
This

IIc(c).
180.3,

the

of
a)Ic

which
to

other

this
will
two
rise

end.

II's

for

fixed

goes
call

forth

thirds
by 480.8

is

exchange
capital,

a correscap-

variable
[120.2

Ic(f)

-289and b)the

360.6
and

Ic(c)],

by 1292.

Now, department

How could

it

bout

I's

of

position

If

capital.

fixed

iation

of

i. e.,

if

it

Ic(f)

would

This

case

on it

accelerate

the
in

fund.

i. e.,

the

by a-

material

fund,

com-

up from

leaves

in

10 years,

If

10% per
but

in

its

of

37 to

the

rate

year

to

just

under

fixed

Ic(c)

capital,

this

10,394.

up to

went

be added
deprec-

of

11%,

around
nine,

then

fixed

ca, -

120.2.
I had existing

in

order

to

in

as that

amortization

circulating

be if

all,

recur

every

reserves
by the

Ic(f)

raise

Kapitalizma

Zakat

of

necessary

amount.
dwell

and we need not

built

are

The first

amortization
for

years

solution,

fixed

of

Second,

which
this

we could

methods

be written

off

of

by moral
capitalist

before

its

does an increasingly

as it

increase

every

the

solve

the

problem

rate

of

depreciation,
book-keeping
natural

lifetime

limits.

First,

year,

so that

this

the

or

cause
up.

quite
must

speculation,

is

will
new

produc-

rapid
the

way is

depreciation

which

not,

level.

higher

has material

in

acceleration

be caused

to

but

capital,

of means of

output

on a new,

also
have

I's

run.

is

This

can only be until

it

employed

can place

meaning

capital,
would

are

capital,

fixed

long

the

reserves.

of

demand for

II's

reserves
which

fixed

primarily

in

in

satisfactory

very

depletion

rapid

rise
If

year.

is

solutions

a fairly

a one-time

enterprises
tion,

these

of
implies

after

other

of

would
tap

exactly

go up

here.

The second

cannot

problem

it

requisite

is

I to

accumulation

moment the

accumulation

go up by the

Neither

over

the

not

could

its

amount,

increase

entire

was replaced

it

in

a large

I to

capital

method

517.85

in

capital

by such

bringing

fixed

A second
which

the

capital,

I's

fixed

of

come from

to I's

the

be for

we let

Iv = 480.8,

ital

for

product.

One way would

has

production

(We ignore

1680?

stock

I only

its

raise

total

In

rate

our

of

number
finite.

of
2

be real--it

any number

fixed

turn-

capital
case

the

of
to
more

-290-

rapid

depreciation

of

rate

more use values

are

in

produced

has limits.

The

the means of

production

is
same

of

true

fixed

of

length

intensity

the

period
day,

working

function,

mean that

must

a shorter

the

of

capital

too,

time

during

only

so much;

means of

production

the

or

these

which

same or

This,

time.

of

can be increased
with

the

which
the
can

be used.
Any increase

in

the

which

fixed

functions

hours

number of

(raw

capital

stant

In terms

fact

in

would

the

of

help

tually

duction

however,

It

is

materials

to

technical

limits,

have only

certain

cultural

ever,
this

up again

Changes
there

is

in

the

a question

come from agriculture,

are

seasons,
a function

are
4

these

If

these

limits
all
in
rate

a simultaneous

production
our
of
rise

technology

discussion

in

the

the

intensity

For

in
the

crops
condiagri-

of

state

from

Chapter

2,

present,

goods

be possible
the

raw

has real

originate

Soviet

of

such

on climatic

though

may not

exists

industrial

mentioned

pro-

of val-

supply

and the

capitalist,
of

depreciation

upon

products

narrower.
is

depends

dependent

of

even

Ic(c)

e. g.,

be

The reproduction

circulation

increased

are

would

means of

that

extent

or

as we have

are

the

I.

capital
would
this/ac-

value
of

11.3

natural,

agricultural

production,

circulating

surplus

or
its

goods,

department

of

quantity

of

To the

production.

growing

technical

more

department

to

sale

simply

Some of

petty

that

con-

To some extent

and a greater

intermediate

we assume that
point

not

in

the

a greater

circulating

part

entire

more quickly.

a year
for

which

production.

these

problem,

of

produce

pre-capitalist
then

is

Others

etc.

our
of

a matter

as raw materials

tions,

over

course

etc. ) on the
the

certain
If

for

or

demand for

the

it

with

more difficult.

intensity,

values,

turn

brings

solution

raises

of

be offered

could

of Ic(c),
ues.

to

of

fuel,

circulation

have

the

this

materials,

alleviate

in

produced

day,

type

an increased

at

per

depreciation

of

make this

complications
capital

rate

we will

howtake

famine.
unless

exploitation

of

-291labor

If

power,
are

production

the

sitate
by the

same number

expenditure

the

extract

extra

between

tions

of

produce

and wage labor.

must at
No matter

by relying

the

whether

is

there
product

equals

1733.9.

If

ment II,

then

capital,

and 2/3(1206.8)

will

be half

tal,

as fixed
stant

capital

75% circulating
With

surplus
tal

in

value

175.7

of

of

an economic

of

fixed

capital
fixed

of

its

of

the

circulating
and 402.3

to

has
took

accumulation

constant

capital,
accumulation,

be put

is

now it
in

place

which

it

capi-

constant
function

will

its

enter

will
over

risen

Is/x

capital.

that

that

those

fixed

= 351.4

circulating

production

depart-

of

requirements

constant

II

comes to

which

production,

material

means of

+ 578s(a)

+ 578s/x
+ 402.2s

1206.8)
-

capital

before

each department,

capitalism

amortization

2/3(1733.9

fixed,

those

as circulating

must

of

department

each year's

that

The value

+ 1155.9v
+ 402.2v

actual

= 804,5

of

Whereas

degree

relationship

shortage

results.

means of

the

consist

or

for

capital

ed with.

ly.

will

The proportion

this
the

that

+ 3467.7c)c
+ 1206.8c)c

meets

that,

rela-

meets

demand for

I(v+s/x)

Iv

current

the

any analysis

be political.

problem

to

be as follows:

would

I(v+s/x)

that

reason

in

quality,

capitalism

existing

a "method"

by accelerating

or

a third

Ills

is

This

capitalism

4623.6(1155.9f
1609.1(
402.3f

I.
II.

the

same time

on reserves

capital,
year's

is

change

in

exploitation

the

and the

capital

a fundamental

between

of

with

may neces-

or

means for

cannot

exploitation--i.

crisis

rate

it

that

and variable

It

the

same means of

these

each of
quantity

real

without

can and does use.

in

rise

the

in

a very

e.,

capital

then
either

This

if

or

same time

values

constant

lengthened

labor,

more

workers.

the

at

would represent

of

is

intensively,

more

consumed

the

day

working

the

cones
we start-

ratio

was 25% fixed

and

30.4% and 69.6% respective71.43%

towards

increasing

the

and 21.42%

towards

acquiring

of

stock

the
of

the

accumulated
fixed

capi-

raw materials,

-292for

etc.,

in

ital

implements

these
the

part

ferred

to

social

production,

In sum,
not

merely

before,
which,

is,

that
once

overall

that

the

the

again,

share

capital

reflects

but

in the

future,

the problem

the

towards
is
of

have stated,

fixed

of

cap-

represents

technical
in

analyze

means

we have

phenomenon

changing

we will

the

of

italism

adapts,

replacement
the

certainly

not

deep

re-

base

of

more detail

the

accelerated

means of

reliance

upon

amortization

of

is

capitalism
It

of

is,

like

as we
for

capi-

inherent

the
to

still

which

cap-

us,

how-

with

nor

capital

constant

a way

capitalism

offer

capital

look

which

with

is

pro-

overcoming

a tendency

problem

produc-

means of

must

tendency,

reserves

fixed

of

production.

it

The basic

gear

stock

and conflicts

production--but

nonetheless.

and neither

to

an historical

of

stock

that

what

an obstacle
of

constantly

existing

of

contradiction

mode of

to

need

the

of

anticipation

reflection

that

anarchy

the

underproduction

becomes

talism

difficulty,

last

this

towards

duction

the

productive

This

many times

the

up,

IV.

in Part

ever,

work

society's

rises.

of production

tion

of

to

out.
II.

The

Transfer

When Marx

of

the

absolute

the technical
ments,
II,

er of

boosted

value

dimensions

total

In

adjustment

I(v+s)

no longer

equal

of

total

between

the

that

have

production

same in

values
the

and expanded
in

the

the

for

c/v.

continuity,
reproduction,

separate

Yet

ex-

schemes.
Marx

IIc.

bringing

leaving

while

production

reduced

demonstrate

simple

of

his

I,

department
IIc,

c and v the

original

to

in

production
up to

he could

order

between
volume

make a major
would

to

reproduction

simple

of

Department

in

I(v+s/x)

of

preserving

these.

distinctions
the

have

to

II

Department

analysis

was assumed

or conversely,

again

his

he had to

Once accumulation
either

from

moved

panded reproduction

could

From

Capital

of

all

two depart-

in department
Marx

chose

as well

as the

he chose

departments

just

neith-

to

keep

as they

-293had been under

simple

of

the process

expanded

to assume that

the

involve

actually
italist
lower

volume

Marx

ing the

organic

Marx to have

carried

er amount of

constant

he himself

though

unaffected.

This

in

a new point
did

not

how this

that

two departments

It

capital.
adjustment

capital

covered,
the

balance

historically

since

introduced

Marx

this

I,

volume

would

of
this

out

it

of

transition

to

effect

of

department

is

former

in

least

as far

disproportionality

would

social

the

for
rather

in

doing

system,

al-

as we have disfrom

had different

production

alter-

But

simply

arise,

meant

has a small-

capital.

not

de-

II,

that

disequilibrium

other

logical

within

the

remained

was perfectly

of

at

one of

the

of

productive

accumulation.

inevitably

the

cap-

from

production

that

would

a real

within

its

out,

work

of

order

of

production

overall

fund

be left

in

reason

reproduction

development

the

a moment in

no particular

expanded

rearrange

its

composition

than department

to

is

some form

a higher

to

exchange

would

which

in

underwent

while

its

to

simple

is

reproduction

and there

stages

elected

so that,

had been,

partment,

it

production

As a result

as it

from

movement

whereby

of

departments,

reproduction,

two separate

economy,

Simple

reproduction.

the

fact

technical

structures,

with

In our

analysis

a very

similar
in

equilibrium
ditions

of

the

total

demand for

that

fixed

capital
Thus there

Here,

We could,

tion,

boosted

its

exchange

not

turn

over

too,

the
fund

volume
could

which,

in

we could
in

Yet

our

not

equal

have

got

would

of

production

cover

that

of

only

faced
showed

new con-

IIc,

but

assumption

be appreciably

before

we even began

around

this

in

one of

prices

of

produc-

discussion
in

the

the

given

one year,

disproportion

as we noted

a scheme which

with

I(v+s/x)

we were

capital

and I(v+s/x).

production,

was a built-in

investigation.

have

means of

out

IIc

that

were

does

two ways.

that

between

fixed

of

We started

exchange

of proportionality

larger.

accumulation

problem.

II's

our

the

of

department

department

II.

I and assumed
The problem

-294with

this

is

solution

torical

process

whereby

fixed
of

capital

in

we have

exchange

total

fixed

of

tion

by Marx

however,

Nor,
tion

the organic

have

brought

with

it

partment

I,

towards

departments.
of

under-production

of

fixed

latter

the

this

have

would

means of

have

expanded

have been

(to

lost.

produclowering

do so in depart-

as we know,

that

of

reproduc-

have
in de-

under-accumulation

production

had
and

have meant

II

tendency

other

associated

the

with

and special

inextricably

been

volume

process

and rearranged

obscured

The sources

the

would

would,

towards

the

accumulation

of

would

and this

capital.

would

process

department

in

tendency

of

of

his-

real

so doing,

between

Marx

For

capital

which

patterns

followed

in

and,

Marxists,

and subsequent

an automatic

of

the

the

and increased

capital

and the

been unrealistic)

a tendency

accumulation
tics

the

obscured

The continuity

we have

composition

ment I would

in

capital

could

one of

within

productive

here.

the accumulation

totally

developed

adjustments

outlined

as outlined

have

would

capitalism

its

the

to make precisely

it

that

characteris-

confused

those

with

of

the former.
We wanted

show how the

to

means of

production

expanded

reproduction,

in a single
tion,

the

the tendency
the

using

the

production
capital.

of

This

have described

with

of

of

on heavy
capital
reflects

here
process

and

machinery
had to
that

constant

will

department

I.

allows

us to

whereby

not

industry,

increasing

developing

sec-

in bal-

eliminate

On the

other,

show three

with

over

this
is

things:

from
moved

capitalism

be accumulated,

stage

in

initially
II

of

turning

capital

demonstrate

I(v+s/x)

modern

genuine

upon

schemes premised

department
in

of

an under-production

as we will

presented

to

the

so that

fund

historical

real

here

all

under-production

we have

fixed

reproduction

schemes

exchange

manufacturies
based

the

of

one hand,

up the

towards

mirrors

a stage

but

total

schemes

out

On the

year.

even setting

ance with

1)It

grew

for

tendencies

large-scale
of

quantities
and the

fixed

process

capitalism

we

quite

-2952)It

accurately.
italism
fer

from

of capital

ism by which

that

from

further

in

situation
is,

values,

through

the

the

in

only

Soviet

the

average

department

of restoring
but

massive

We have,
tendency
so far

in

towards

fixed

surplus

addition,

tested

the

and b)fully

department

ment I would

II

have

utilized
produce

would

insufficient

capital

seen how Preobrazhensky

already

When new investment

that

is

makes capital

constantly

approached
it

needed

to

those

where

tailed

is

done.

In

in department

I,

the

capitalists

not
but

branches

cess production
how this

is

available,
from

transferred

to

it

our

of

this

fund.

production

case,

where

II

will

that

sit-

depart-

II
is

Capital

general.

is

own

department

where

our

VKA 17.

there

In Chapter
there

to

We have

in

I or
in

society

insufficient.

In
while

problem

can

its

of

out

this

them

of
that

production.

department

to

All

a scale,

expand

capi-

as we stuck

solely

large

department

do so on a

new enterprises

is

in

accumu-

solutions

accumulation

on too

stocks

fixed

production.

a)accumulated
its

that

positive

had to

so long

was impossible

each department

of

possible

in

actual

existing

once.

means of

sur-

schemes
the

at

of

social

Revolution,

it

all

various

invest

the

of

capital

deviation

the

depreciation

out

to

need

This

capital.

value,

fixed

seen,

replace

begin,

average

under-production

that

assumptions

the

simply
of

to

did

proper

mechan-

as we have

outlines,

on a path

embark

the

3)These

October

barely

trans-

is

via

profit.

the

the

I,

of

broadest

I could

quantities

have pointed

produce

uation

not

of

their

much less

is

allocation

rate

cap-

department

of

One way,
capital

following

Union

And when accumulation

basis

alone

i. e.,

production,

of means of

tal,

of

to

an economy where

lation.

transfer

This

growth

posit.

way that

namely

I.

absolute

this

although

reflect,

the

capital,

department

to

the

clarity

fixed

of

had to

otherwise

according

value

plus

II

ensures

effects

capitalism

of prices

department

have

full

show with

accumulation

capitalism

we would

which

its

out

carries

us to

allows

is

ex-

4 we de-

under-production
invest

in

plants

-296-

means of

produce

that

of

transfers

capital

serves
on the

one hand,

Capital,

after

fluidity

derives

form

that

The modern

very

act

of

realizing

which

is

the

it

can be most

a transfer

such

of

production

after

Department

have

I will

Is(a).

Out of

for

the

to

all

circulating

first

year;

part

+ 517.85s/x

effective-

our

+ 194.2s(a)

available

surplus

new fixed

val-

capital,

increase

to

ini-

+ 517.85s(a)

+ 194.2s/x

and 37.03

Ic,

of

the

go to

period.

invested.

in

will

and the

and,

take

its

production,

following

the

Again,

of

and its

of

work?

+ 388.4v

other.

equivalent

profitably

+ 1035.7v

accumulate

result

in

re-

subsistence,

property,

money capital

and exchange

517.85,369.9

this

the

again

capital

capital:
+ 1165.2c)c

to

universal

this

ample

on the

system
titles

of

begin

to

centralizes

where

3883.9 fixed
1553.6(388.4f

II.

110.92

legal

fixed
10,357.1
capital:
4142.8(1035.7f+3107.1c)c

I.

ue,

it

credit

form

for

not

and means of

the

production

system

of

scheme,

developed

Such ready

capital.
it

were

raw materials,

as money,

credit

How would
tial

the

allows

disposes

ly,

takes
from

be possible

not

and a highly
all,

fixed

primarily

labor,

of

capital,

commodity
only

would

implements

of

production,

Iv.

This

gives:
I.

This
its

10,727 fixed
4290.7(1072.7f

increase
means of

figure

(1)
(2)
x,

the

IIc(c),
of
also

8.5.

to

fixed

Given

10% and an organic

subtract

2.85

for

can add the

much is

the

following

from

withdrawn

new fixed

up between

same amount

two

to

IIs(a).

capital

To

and addi-

equations:

37.03

x+y=
3x -y=0

addition
is

we solve

II

means that

divide

will

+ 517.85s/x

+ 1072.7v

and so this

production,

IIc(c),

to

by 37.03

how this

out

tions

Iv

of

capital:
+ 3218c)c

capital,

equals

an annual

rate

composition

of

from

the

194.2

of

28.5

the

depreciation

capital

IIs(a)

and y,

to

of

four

add to

of
to
IIv.

additional
fixed
one,

capital
we must

We have

for

-297II:

department

3926.6 fixed
1570.7(392.7f

II.

194.2

IIs(a)

Out of

the

supply

of

means of

This

leaves

154.3

solve

this

taken

be distributed

to

must

II's

equal
capital

+ 194.2s/x

a total

and 2.85

production

new fixed

its

i. e.,

Iv

to

we have

+ 392.7v

between

Ilv,

of

This

39.9

or

VKA 17.

addition

IIc(c).

plus

in

increase

to

11 's
in

two departments.

the

did

entire

37.03

of

increase

to

same way Preobrazhensky

the

increment

capital:
+ 1178c)c

We

We know that

means of

the

production,
following

us the

gives

all.

equations:
(3)
(4)
(5)

h+
hih=

Where:

248,

duction

to

12.99.

Solving

ital

in

II,

7.88

the

for
figure

Arranging
I.

II.

I(v+s/x)
(the

initial

stock

for
all

the
of

(1)

the

of

fixed

IIc

plus

original

of

the

total

capital

is

out
to

the

total

cap-

means of

in

IIv

add to

accordingly

+ 392v

aggregate
total

(71.43

+ 21.42)/7.15

i=

10.2,
102.3

and j=0.79.
to

add to

The new variable

Ic(c).

(4).
to

equa-

means of pro-

additional

133,

and 2.36
from

simultaneous

h we take

of

addition

capital:
+ 3248.7c)c

II's

h=

equation

capital

3920.3 fixed
capital:
1568(392f
+ 1176c)c
= 1600.75.

our

total

capital

10,820.3
fixed
4331.6(1082.9f

II's

to

from

(2),

from

increase

[fixed

production

increment

we get

and 30.7

i=

means of

IIv

and

have

the

= the

variable

capital

where

Iv

equations

equations

partment

the

these

I we already

total

The ratio

additional

fixed

of

I's

(5)

and

above).

the

Using
stock

(4)

equations

(p.

=0
=0

increment
to
ital
+ Ic(c)]
the increment
to
production
the increment
to

j=

tions

154.3

the

i=

We obtain

2i +j=
12.99i
12.99j

It

equals

for

equation

IIc(c).
(5)-. -it

de-

we take

capital,

constant

cap-

For

10.2.

I's

Again,
comes to

we have
0.79.

we have:

+ 517.85s/x

+ 1082.9v

+ 194.2s/x
accumulation

additions

of

fixed

of

means of

production

and circulating

con-

-298-

stant
II

= 1600.8.

capital)
department

to

In
a given

way,

year

according

an additional

we solve

the

to

tion
of its

It

ment II.

have a certain
duction

over

surplus

department
in the

through

116 to
capital,

means of

we have

not

but

in

their

we should

I to

the

of

in

the

that

out

produc-

produce

all

with

depart-

II

to

reserve,
the

had to

II

was that

tide

proso-

entire

in

under-production

tendencies

accumulation

of

the initial

eliminated

respective

note

commodities

By arranging

means of

ex-

added by accumulation

however,

immanent
also

carry

exchange

all

overcome

demand for

and II's

have

year.

only

have

demands of

production

the

by the

about

the

we

of

by the

caused

production

process

imbalance

and

production

we must

accumulation,

between
at

Ic(c),
42 to

is

will

yield

of

which

and 38.7
IIc(c),

to

Iv.

IIs(a)

and 14 to

of

capital

at

the

+ 1082.9v + 541.5s/x
196s/x
392v +
+

IIv.

the

= 196,
If

stock
of

coming

any further

product

go to

will

in

itself

requiring

following

equilibri-

established

The arrangement

+ 3248.7c)c
1176c)c
+
386.8

sustain

will

without

the

having

whether,
it

departments.

4331.6(1082.9f
1568(
392f

= 541.5,

ask

two departments,

the

arrived
I.
II.

of

value

"normal"

of capital

condition,

of

all

capital

this

close

departments,

for

in

produced

both

department

variable

of

value

we had to

available

I would

the

The question
um between

department

of

addition,

for

that

until

I brought

accumulation.

Is(a)

side

discontinuity

temporal

In

order

the

value

quantity

I(v+s/x)

needs

satisfies

equivalent

two departments,

between

from

capital

surplus

Previously

in

after

surplus

The other

needed.

total

material
that

year

fund

was only

had produced

the

problem.
the

end of

consumption

cial

to

the

two departments.

the

of

143.2.

arrangement

between
change

transfer

by apportioning

this

an overall

obtain

just

is

The net

of

which

we arrange

transfer
we have

end of

the

year:

+ 541.5s(a)
196s(a)
+

fixed

capital,

140 goes
the

years

cappital

to

fixed
ac-

-299-

cording

[thus

year

figures

these

to

and carry

fixed
1.11,216
4486.3(1121.6f
4060 fixed
1624(406f

II.

I(v+s/x)

Although

is

production
We see,
ing

the

will

capital:
+ 1218c)c

total

that

equilibrium

surplus
II

value
I.

to

a balance

in

subsequent
basis

proceed

on the

our old

disproportion

This,

of

in VKA 17 when dealing

departments
when the
of this

organic
type

of

distribute

the

countless

points

exchange,

precisely

is

goes on all
prime

social

not

just

of

this

and for

effecting

is

the

place

These

of

production

for

plan.

What is

which

by crises;
these

the

of

crises

are

rearrangements

re-

introduces

to

and

moment,

the

realin

and not
of

characteristic

rate

of

occur

production

transferring

general

bounds

constantly

geared

the

and

can only

production

only

when

viability

the

of capitalist
is

process

the

transfers
to

at

capital

within

The need

branches

arise

of

about

solely

process

arrived

that

production

social

that

attended
for

this
It

value.

time,

vehicle--is

in

because

any sort

the

main mechanisms

capital

to

each department

Preobrazhensky

values.

between

means of

accumulation

compositions

as well.
of

that

capital

return.

takes

masses

of

within

What he said

rises.

disturbance

surplus

capitalism

of

as we allow

organic

unequal

by transferring

demand for

and II's

already

means of

by rearrang-

reallocation

disproportionalities

the

here,

i. e.,

year,

same conclusion

which

cost

with

the

solution,

at the potential

accordance

resources

composition

applies

of

As soon

with

pure capitalism,

ization

years,

have

I and II

no one-time

automatically

is

course,

be maintained

I(v+s/x)

will

demand for

total

can only

between

the

of

+ 560.8s(a)

67.55.

is

have:

we will

by about

and every

the

end of

+ 203s(a)

II's

each

There

guarantee

production

I(v+s/x)

than

the

+ 560.8s/x

+ 203s/x

by 58.4,

to

I(v+s/x)],

of

+ 1121.6v

+ 406v

lie

exceeds

then,

from

capital

capital:
+ 3364.7c)c

greater

production

maximum level

us the

giving

out

capital--which
of

is

profit

themselves

one of

and restoring

the

the

-300two departments
is

this

that

the

not

It

borders.

into

duction

a position
whole

out

its

where

they

give

ganization

its

of

would

So, once more following

as it

but

italism,

duction.

economy during
apply

ditions

concrete

of

question

of

inseparable
ial

expanded

from
of

in some detail,

that
the

social

the

basic

ements and their

trial

of

eral

in

of

this

but

thesis,

in

as we have

that,

two modes of

principles
to

outlines,

our

of

analysis
then

in

of
terms

the
of

Soviet

the

of

because

the

solution

to

of

fixed

capital

turns

out

to

the

mater-

trace

out,
el-

that

we must

economy
task

in

Part

I,

with

circulation

be

material

of

petty

and indus. -

was laid
where

different

goods

the

these

the

economy
the

famine:

rud-

was

difand

therefore
First

the

two sectors

techniques

We must

in

not

out

we derived

The Soviet

power.

con-

of

many times,

stressed

first

and

the

of

and circulation

scheme.

the

VKA 17 established

is

that

Soviet

pro-

to

circulation

labor

organizing

with

modes of

study
in

for

production

cap-

capitalism

a mixed

reproduction

represented

directly

of

a two-sector

more complex,

ferent

process

abstract

pure

For

capital.

problem

same order,

reproduction

The groundwork

two parts

iments

the

reproduction

production.

last

of

process.

that

under

reproduction

dis-

the

the

pure,

in

pro-

or-

inter-connection

constant

proceed

This

economic

investigate

a concrete

simply

capitalism.

of

accumulation

developed

we discovered

what

the

elements

We cannot

modes of

regulating

under

not

production

and subordinate

for

necessary

NEP.

move on to

in

concretely,

Preobrazhensky

principles

the

not

capital

developing-capitalist

The analysis

theoretical

from

fixed

of

for

mechanism

arise

other

forms

other

we will

exists

or

pre-capitalist,

These

know

own economic

capitalist

Preobrazhensky,

reproduction

of expanded

for

produce

does

its

within
and draws

them

of

a powerful
otherwise

Capitalism

strictly

market.

capitalism

that

proportions

by any means.

story

breaks

orbit,

But we already

proportionality.

constantly

as part

and purchase

of

and production

accumulation

out

carry

to

in

and reproduction

move on
its

genof

the

-301individual

elements

of expanded

that

fixed

capital

the basic

analyzing

the

fixed

we will

take

of

capital
chronic

shortage

of

of

in

the

economy,
productive

in

the

We will

in

and then

particular

there,

question

capitalism.

a mixed

with
is

It

up the

proportionality
in

the two sectors,

elements,

capital.

concrete

conditions

and circulating

these

of

of

under

in

reproduction

reproduction

to the reproduction
discussion,

of

attention

that

it

to

accumulation

and as the
capital

latter

accumulation

use

in

terms

of

establish
of

fixed
for

touchstone
the

Soviet

Union.

NOTES TO CHAPTER 9
1.

For a good example of this

see the last
chapter
of Luxemburg's
Accumulation
that capitalism
of Capital,
where she allows
will
not
breakdown,
actually
reach the point
of imminent
and the revolutionintercede
ary action
of the proletariat
will
and establish
socialism long before.
She does not,
however,
abandon the breakdown
in spite
implications.
theory,
of its determinist

2.

Carrying
out
we have:
I.

II.

accumulation

fixed
10,394.1
4623.6(1155.9f
4022.6 fixed
1609.1(402.26f

and production

capital:
+ 3467.7c)c
capital:
+ 1206.8c)c

+ 1155.9v

+ 402.2v

for

an additional

+ 580s/x

+ 201. ls/x

year,

+ 580s(a)

+ 201.1s(a)

its
fixed
II will
increase
its
by
143.6,
concirculating
capital
have
to
I(v+s/x)
by
Thus
by
43,
IIv
14.4.
will
stant
capital
and
increase
(which
by 186.6,
in
by
124,4
Iv
will
rise
meaning a rise
in Iv will,
Is/x by 62.2 at the end of the year),
This increase
if we maintain
I's productive
capital,
throughout
proportionality
The
Ic(c),
373.2
Ic(f)
Ic
by
124.4
497.6:
that
and
mean
goes up
is thus equal to
increase
in Iv and Ic(c)
total
taken together
82.4
leave
497.6.
Is(a),
this
If we let all
this
of
come out of
it
bringing
to
to go to increase
the stock of fixed
capital,
1280.3.
124.4,
to
10,476.5.
to
We also know that
Ic(f)
rise
must
figure,
by
Dividing
this
we
the stock of fixed
through
capital
12.2%
8.2
just
about
or
years,
get an amortization
under
period
of
increase.
per year,
which is quite
a substantial
3.

in
turnthe
This is true only if,
in
the
reduction
as
our example,
from
or
from a fall
in the production
period
over period
results
intensity
in both the intensity
which
with
the
labor
a rise
and
of
fixed
time comes
in turnover
is employed.
If the reduction
capital
has no effect
this
only from a drop in the time of circulation,
on the mass-of
surplus
value,
and hence the mass of use values,
during
produced
lowers
the amount of variable
it simply
the year;
be
(and circulating
advanced.
that
in
capital
must
general)
capital

-302This
rate
ital,

the annual rate

would raise
of surplus
value and the annual
but would have no effect
of profit,
See Capon production.
II,
Chs. XV-XVII.

4.

See Capital,

III,

5.

See above,

Chapter

6.

This was one of the main themes of Preobrazhensky's

writings
about
In the last
instance,
crises.
capitalist
argues Preobrazhensky,
posed the need for the bourgeoisie
economic crises
to attempt
to
the conditions
redefine
under which labor
power is bought and sold,
for a crisis
always posed the essential
problem
of how the capitalist
class
could
extract
more surplus
value out of the proletariat,
Quite obviously
and thus restore
profitability,
this
proved
to Preobrazhensky's
central
analysis
of fascism,
which he viewed
form
the
to enforcing
of the bourgeois
as
state
most appropriate
between capital
this
At the same
new relationship
and wage labor.
time,
the capitalist
crises
provide
to
class
with the opportunity
it with new, modern plant
scrap outmoded fixed
capital
and restore
it is attempting
the same moment that
to purchase
and equipment--at
basement prices.
labor power at bargain
See in particular
"EcoUnder Concrete
Capitalism
nomic Equilibrium
and in the System of
Ch. 7.
the USSR, " VKA 18, and Teoriya
Padaiushchei
Valiuty,

7.

This still
says nothing
composition
about the material
of I's production
demand for various
kinds
II's
to satisfy
and its
ability
in the right
defer
We will
of means of production
proportions.
however,
here upon its
Part IV, concentrating
this
analysis,
until
in value
terms.
solution

pp.

118-19.

2, pp.

129-30

and p.

138,

Note

9.

-303PART IV
EXPANDED REPRODUCTION IN THE USSR DURING
THE PERIOD OF PRIMITIVE SOCIALIST ACCUMULATION
CHAPTER
OUTLINES

GENERAL

Scheme

Preobrazhensky's

I.

Preobrazhensky

crete

of

which

he would

have

thought

If

necessary.
his

to

preliminary

in
in

used by Marx,

Preobrazhensky

which
plete"

only

for

System

of

in

specific

economy.

To study

and unique

Preobrazhensky
from

works,

tors

analysis

and his
primitive
Part

of

duction

even these

in
of

II,

course,

the

mode of
schemes

the

to

of

led

him

standpoint

adequate.

to

of

thought

the

two

fill

first

his

law of

value

as we noted

sectors,

Soviet

We already

of

two regulaand the

at
the

the

came upon

however,
this

op-

repro-

each representing

system,

it

We

policy.

the

analysis

those

other

between

the

in

what

society

of

two

be

earlier

in

theory

his

that

to

Equilibrium

places

start

sense

sense

his

of
In

the

on financial

This,

was

and "com-

throughout

writings

conflict

production.
were

the

turn

and details

in

make this

this

accumulation.

was what
from

done

he

an historically-given,

with

that

a number

socialist

schemes

a different

of

that

we must

properly,

The New Economics

described

ening

it

deals

in

philosophical

"Economic

from

it

that

in

sophisticated

of

con-

analysis

Preobrazhensky

differs

characteristics

had,

have already

law of

fact

the

the

abstract,

The analysis

work.

in

still

the

economy,

complexities

framework

analytical

of

latter

the

a more

is

study

USSR

(VKA 17 and 18) were

1926

further

it

the

statistical

concrete

into

Yet

precisely

is.

is

in

Soviet

the

(VKA 22),

introduces

articles

particulars

in

of

1927

USSR" (VKA 22)

the

proposed

detailed

of

It

reality.

further

his

out

synthesized

the

presents

essential
the

of

picture

Reproduction

two articles

one of

it

GOODS FAMINE

Expanded

kind

nature.

that

THE

reproduction

the

the

last

theoretical

still

it

expanded
used

OF

carried

never

conditions

For

10

not

difficulty

-304in

ourselves,

our

There we saw that

any

ly be conditional,
analysis

account

ents of

productive

functions

within

both of

expanded

the

fixed

choose the

following

1.
II.

concrete

scheme for

capitalism

Soviet

the

studying

and

analysis
the

and of

as Preobrazhensky

we might,

compon-

ac-

observed,

economy:

product
product

plus

the
from

surplus
product
other
sectors

alienated

Sector:

c+
c+

the

note

different

value"

category
market,

in

the

state

the

proper
in

of

have occurred

in

the

nomy, whose whithering

analyzed

in

why surplus
of

part

surplus

Chapter
value

labor

the

nor

the
the

of

eroded

is

by the

transformation

of

product

cannot

take
of

categories

not

exist

regulated

the

(without

We have

law of

this
the
which

changes
eco-

political

capitalist

petty-commodity

by the

of

and the

place),

eco"sur-

sector

state

commodity

transformation

The New Economics.

in

the

Soviet

produces

In

category

does not

sector

scheme ref-

the

term.

the

other

in

coexist

peasant

this

of

categories
that

away and nascent

3 of

power

product
product

production

sense

large

in

that

sector

modifications

the production

+ surplus
+ surplus

immediately
modes of

has been
the

fund
fund

consumption
consumption

Neither

nomy.

Sector

Production

Here we would

value

under

our

on-

value

use values

Following

production.

a pure

individual

the

distinct

their

of

could

c+v+s
c+v+s

Petty

that

of

capital.

terms

value

go beyond

to

reproduction

of

capital,

surplus
surplus

c+v+
c+v+

Capitalist

plus

process

in

problem

fixed

of

Sector;

State

lect

the

terms

reproduction

cumulation

I.
II.

in

accumulation

demanded

the

of

capital

of

I.
II.

to

solution

and constantly

take

to

the

of

examination

Preobrazhensky
described

already
sector:
value,

The

and hence

-305"variable

of

the category

"The

need.

down from

break

departments

it

"is

sector.

we

inadequate

individual

for

our

magnitudes
different

the

with

Preobrazhensky

scheme which

information

exchange

"2

sectors.

this

the

all

how the

their

of

to

apply

convey

as to

view

different

not

Preobrazhensky,

no idea
of

point

more detailed

the

we adopt

gives

the
the

of

scheme cannot

scheme, " says

above

because

purposes,

capital"

this

Nevertheless,

does

that

proposes

we have reproduced

on the

and it

be useful

next

page.
This

is

scheme

us to briefly

summarize

first

the

examine

department

one department

state

certain

II

from petty

state

state

the

of

imports

planned

particularly
form,

reflects

relatively
to trading

small

That

sectors.
the

fact

role

and merchant

in

that

the

play

a large

to

due to

the

of

all

department
it

the

elements
this

they do not
in

per

se,
In

of
role

do so in

helping
II

of

the

and is
addition,

of

the

sys-

Capital,

in

reproducin

reproduction
both

in
the

Soviet

consumption

see below

We shall

role

de-

with

we should

addition,

in

needs

spend part

will

any imbalance

relieve

capitalism

still

means of

the

be in

might

Likewise

sector.

In

I of

capital,

in Volume

precisely

undertakings.

any

scheme.

observed

production

within

workers

into

play

reproduced

fixed

origin.

peasant

As Marx

Imports

its

i. e.,

imports

each

purchase

will

when we considered

and peasant

sector

of

peasant

It

be necessary

would

material

the

sector.

and exports

equilibrium,

trade

from

of

us

within

self-sufficient
forms

Let

for

components

instance,

For

it.

of

is
This/first

alone.

agriculture,

introduction

completely

and other

production

bourgeois

capital

production.

machines

would

explication

how relatively

wages on commodities

foreign

their

of

the

of

tem achieve

tion,

of

means of

partment

that

None are

no matter

the production

note

sector.

any one sector

or

sector,

their

and variable

composition

physical

Preobrazhensky's

constant

each

of

complex,

extraordinarily

the

capitalist

has
a
economy

generally
department

confined
II

of

STATE SECTOR
All of the
fixed
capital
c

The part of the constant

capital annually
reproduced on an
expanding scale:

Wage fund:

(a) via reproduction

within the
department

(a) the part that is replaced by means of

exchange with //c of
the state sector

q)
m
Q

Surplus product:

(1) For ex p andin g

existing
enterprises

(a) accumulation
fund

(2) For constructing

new factories
C
O

(b) by means of
exchange with
other departments

(b) by means of exchange with Ilc of

other departments

(b) the fund of non-productive

consumption of the Soviet system, which
passes into //c of all sectors and into
c of military industry

(c) via imports

Co
7

E
O
U
CO
N
.
-79
U

The part of the constant

cap i ta l annua ll y

Wage fund:

Surplus

0
N

product:

reproduced on an
expanding scale:

E
n

(a) by means of exchange

with department / of
the state sector

(a) the part replaced

within the
department itself

(a) accumulation fund in the department itself (additional v, additonal

increase to its own c)

(b) by means of exchange

with the consumption funds of the
departments / of
other sectors

(b) the part replaced by

means of exchange
with the consumption
funds of other
departments

(b) the fund of non-productive

tion of the Soviet system

consump-

(c) by means of exchange

with part of fund of
non-productive consumption of
department /
(d) via imports
a, The movement of the material composition of the fund of socialist accumulation is clear
from the entire scheme of reproduction.
More detail about this will be given in the numerical
analysis of the Control Figures of Gosplan.

CAPITALIST
c

c
4)
t!
CO

Same as in the state

sector, except for
imports

SECTOR

+v
Same as in the state
sector

+s
(a) accumulation fund
(b) fund of capitalist consumption
(c) fund of nonproductive consumption
of the Soviet system
for the fund of so(d) expropriation
cialist accumulation

ZI
CF1

Same as in the state

sector

Same as in the state

sector

Same as in department
capitalist sector

/ of the

a
7

PETTY BOURGEOIS SECTOR

Means of production
for the production of
means of production
which are annually
reproduced on an
expanding scale

Consumption

fund

(a) reproduced within

the department

(a) reproduced by means

of exchange with
//c of the state
sector

(a) accumulation
fund

(b) by means of exchange with Ic of

the state and
capitalist sectors
(c) via imports

(b) by means of exchange

with I/c of the capital
ist sector

(b) fund of nonproductive

of the Soviet system

(c) by means of exchange

with //c of its own
sector

(c) expropriation
into the fund of socialist accumulation

Means of production
for the production of
means of consumtion
annually reproduced on
an expanding scale

Consumption

Surplus product
(1) the part that remains within the
department

fund

(2) the part exchanged

for addition to the
consumption fund
(3) for additional
means of production from other
sectors
consumption

Surplus product
(1) fund of additional
consumption produced internally
(2) exchange for

(a) created within

the department

(a) produced internally

(predominant part)

(a) accumulation
fund

iionans
of produc
o
from other departepartments of other
sectors
(3) own additional
means of production

m
E

$1

(b) reproduced by means

of exchange with the
consumption fund
and a part of the fund
of nonproductive
consumption of its

(b) by means of exchange

with a part of IN of
the state sector, and
IN of the capitalist
sector

(b) fund of nonproductive consumption

of Soviet society, in natural form

own sector
(c) by means of exchange
with v and a part of
the fund of nonproductive

consumption

of department / of
the state sector
(d) by means of exchange with a part of
v and s of department
/ of the capitalist
sector

(c) expropriation
into the fund of socialist accumulation

-306sector

the petty-commodity
in

capital,

stant

We should

departments
in

exists
tive

of

the personal

in

It

form

in

fund of non-productive

in

II,

departments

from

part

the

of

expansion

of

tional

the

each
in

sense

the

of interconnection
ductive

departments

all

of

all

The reproduction
deal

a great
primitive
it

socialist

consists

state

of

economy,

variable

sector.

of
the

against

in

in

"v"

between

The three

the

mutual

obtain

non-proand

renewal
4

of

the
in

only

productive
a condidegree

high

No part

them all.

without

they

shows the

production)

petty

IIc's.

II,

exists

the

as means of

c and v parts

that

where

share

only

the

departments

this

of

that

for

to

simple

which

role

allowing

all
the

production

crucial

non-produc-

SI,

of

three

all

sector

capitalist

physically

exists

of

the

of

These

of

this

pro-

exchange

involving

each sector

tells

us

in

period

of

part

corresponds,

is

the

expand
for

economy

I of

department

One goes

down into
go to

Soviet

the
In

parts.

in

product

surplus

nature

and breaks

It

is

all

corresponds

true

accumulation.

The second

in

of

sectors,

two basic

capital.

new ones.
state

about

that

not

can be reproduced

capital

while

a category

this

each

etc.
non-

capital
of

consumption,

means of

exists

sector's

but

(remembering

that

IIc

that

own conbreeding,

constant

class

we see the

of

state

equivalent

capital

sphere

for

the

reproduction

sector

its

of

can produce

SI plays

of

constant

Therefore,
capital

Thus

fund

consumption

kind,

require

SI.

the
the

capitalist

be exchanged

turn,

is

state

consumption

must

which

that

means of

SII

product

surplus

ductive

of

part

livestock

manure,

be remembered

the

of

reproduce

reproducing

Soviet

the

to

function

must

reproduction.

and expanded

in large

seeds

plays

consumption

production

of

the

physical

the

able

at

II.

consumption

of its

look

also

consumption

productive
three

form

the

is

to

non-productive

as we said,

to

the

accumulation

categories

existing

the

of

sector

within

the

new constant

and

and to

build

enterprises
consumption
capitalist

state

of

personal

the
con-

-307-

fund,

consumption
all

In

go to

defense

plants,

workers
trading

network,

ductive

consumption

the

the

fund

which

capital,

in natura
ically,

productive"
modities

is quite

the

quire

exchange

portion

of

the

pand their
that

is,

portion

that

both
goes

other

to

form

the

it
for

private
the

non-pro-

constant

of

cap-

and is

v,
goods

for

of

the

the

in
into

new

from

is

SII

either
Physthe

reproduced
of

consumption

all

the

"non-

for

be exchanged

com-

function.

the

personal

consumption

production.

Both

consumed

within

accumulation

by the

Another

we would

(or,

kulaks--who
of

can ex-

accumulation,
terms

as "v")

reflects

the

subordinate

state

economy.

This

socialist

accumu-

normally

directly

re-

obviously

capitalists

result

the

new

of

reproduction.

achieve

fund

sectors

and petty-commodity
towards

relation
the

goes to

by PII.

goes

product

that

produced

produced

or must

as a direct

portion

product

production

peasants--predominantly

surplus

all

surplus

A portion

fund

to
is

product

K and P play

the

of

means of

for

means of

consumption

the

part

state,

sectors

by those

first

natura

capitalist

of

augment

surplus

of

the
of

increase

this

the

of

and above

The remainder
role

to

personal
over

into
part

aginst

directly

Some goes

with

where applicable,

to

Soviet

Part

rest

exists

and trade,

that

straightforward:

can fulfill

product

sectors:

workers,

against

consumption

is

the

consumption

the

interesting.

respective

in

state's

that

means of

leakages

exchanged

goes

of

PIT which

The surplus

fund

administration

Soviet

the

exchanged

in

II,

goes
is

or

either

workers
of

is

for

exchange

non-productive

same as SIIv--it

or

exchanged

goes

fairly

remainder
SII,

within
the

is

and must

the

sectors;

forms

this

of

exception

department

constant

part

it

industries.

state's

accumulation

the

that

natura

military,

The only

etc.

goes for

the

is

working

of military-related
For

terms,

(SIs/x)
those

in

exists

social

sustain

in

ital

either

production

as means of

in

reproduction,

which

IIc's.

three

which

capitalist

under

sumption

to

the

of

primitive

-308directly

The state

lation.

non-equivalent

exchange,

The other

is

part

for

state

production

that

lation

physically

are

where the

they

makes such
be

matter

how necessary

lation

in
These,

state

then,

expanded

The fund
may be,

the

are

that

in

reproduction

only
his

to carry

described

such

terial
is,

the

those

the

next

Soviet

revealing

the

the

of

each

crucial

but

economy,

sector's

point.

We are

(as

same departments
the
I of

and the

other

We now must

analysis).

famine

have
no

accumu-

only

of

state
the

then

country's

further
go

different

sector,
petty
that

the

which

bourgeois
the

backwardness

full

imbalances

in

with
with

produces

agricultural

the

moving

be-

between
machinery,

produces
of

This

a strict-

as that

sectors,

ma-

only

exchange

and consider

Before

the

different

with

adequate

implications

be

quantita-

as well.

dealing

which

repro-

should

the

such

emerge.

are

of

exchange

sector,

the

of

he wished,

depths

"capital"

is

scheme

Preobrazhensky

allowed

no longer

sectors

same or

all
they

which

the

productive

the

is

fact

more rapid

and origins

quality

of

It

ser-

because

Even now it

to

economy

departments

terials,

labor

and in

go into

have

scheme would

that

and department

perhaps,

Preobrazhensky's

chapter.

product

I of

accumu-

consumption,

to

way in

each department's

department

private

(except,

labor,

We will

of

tween the

of

however,

of

parts

ly value

the

of

by means of

block

and the

the

within

composition
perhaps,

a direct

etc.

socialist

non-productive

6
USSR.

here
in

of

only

disproportions

tive

to

cases

social

outlines

the

a complex

analysis

which meant not

is

of

essential

duced in much more detail

clear

most

conceptually,
of

shares

or

directly

applications

credits,

sector.

we have

categories

in

distinguished

it

the

consumption

payments

by means of

taxes,

consumption

Of course,

etc.

relationship:

the

non-productive

non-productive

different

a reciprocal

of

through

on agricultural

indistinguishable

peasantry

represent

for

fund

military,

go to

They must

vices).

interest

through

the

the

apparatus,

it

expropriates

raw ma-

Soviet
on to

goods
that

-309it

analysis,

is

the general

tendencies

basic

draw out

at

One of

the state

the

it

hand,

the

dustry

if

Thus the

time,
This

the

was not

Preobrazhensky
for

be a de facto
latter,
in effect

in

of

of

subsidy

labor

be exchanging

age or socially

necessary

ing more of

own values

its

Non-equivalent

exchange,

talism,

wherever

italist

forms

economy;

only

of

the

course,

latter

given

fewer

intersects
It
the

is

lower

meant

by this.
an ever-

Western

of

capitalism;
On the

production.

the

capitalist

in-

domestic

private

market.

were reinforced

foreign

"milking"

in

the

for

skilled

takes

no less
productivity

If,

there

would

since

the
would

product,
one hour

for

would

actually

of

aver-

be exchangproduction.

peasant

under

regularly

as

exchanged

state,

labor

place
with

labor

one hour's

of

values

measures.

industry,

by the

same

peasantry.

peasant

state

and

At the

trade.

by economic-political

of

one

with

industry

The state

for

production.

here,

of

labor.

of

to

product

one hour

non-equiv-

advocating

compete

sector

private

one hour's

exchanging

to

also

expended

the

of

petty

one hour

argued,

via

of

that

for

need

than

of

of

the

The productivity

Soviet

a policy

Schemes

prices.?

access

low,

is

what

asserts,

of

monopoly

is

sector

about

hope

of

kept

repeatedly
one hour

that

not

prices

were

result

lower

allowed

by the

prices

private

careful

than

could

high

politically

peasant

equally

higher

were

relatively

the

there

Reproduction

New Economics

the

and peasant

the

of

The

of

off

was far

economy

latter

the

protected

state

a bit

Soviet

and from

reproduction

Basis
of

be quite

industry

was quite

of

we can discern

so that

as Day ludicrously

was not,

of Soviet

labor

the

as

accumulate

gap between

widening

expanded

arguments

We must

Preobrazhensky

yet

to

famine,

theory

inter-relationships.

central

sector

Preobrazhensky's

examine

goods

under

Exchange

exchange.

alent

work

more complex

Non-equivalent

II.

the

of

morphology

first

to

necessary

capipre-cap-

and subordinates
a reality

in

the

Soviet

of

labor

in

Soviet

-310industry

is,

It

enforced.
tion

to

as compared

then,

primitive

of

means of

lations

socialist

expanded
proceed

the

attain

Eventually

the

instability

itical

for

pressed

This

have

an end to

the

In The New Economics

but only

in

line

but

would persist,
reflect

increased

efficiency,

industrialization
collection

of

production

as the

ization

the

living,

rural

for

sine
the

Preobrazhensky

period

of

zhensky
gross

two

primitive

it

output

of

first

this
in

both

departments

Soviet

industry
West.

the

city

and
the

pol-

who constantly

foundations.

its

to

system

on their

placed

state

prices

fall,

must

Non-equivalence
industrial

state

brought

costs

its

of

re-equipping

the

industry,

state

collective

such

which

the

industrial

leisure

increased

by

about

was obviously

process

socialism,

prices

and stanindustrial-

8
make possible.

cites

dominant

VKA 22?

this

and the

time,

"first

in

be tran-

were not,

state

that

around

qua non of

socialist
of

termed

the

unemployed

they

production

of

country,

therefore

as the

of a realxation

in

saving

new proletariat,

the

would,

supersession

the

drop

if

re-

must

capitalist

productivity.

the

The bedrock
of

the

argued

it

between

Soviet

rock

production

forces

social

labor

social

as the

If

the

to

because
full

the

would not

dard of

by those

in

rises

only

labor

constraints

as a weapon of

happen

only

be equalized.

to

every

same token

and exchange

Preobrazhensky

with

condi-

he did

socialist

by the

of

threaten

would

of

could

labor

of

engendered

activity

economic

it,

like

exchange,

reproduction

same productivity

would

be

must

an obligatory

accumulation,

without

conditions

the countryside

calls

non-equivalent

scended as soon as possible.

could

non-equivalence

accumulation.

primitive

not

could

this

market,

Preobrazhensky

what

viewed

Although

conflict.

world

socialist

Preobrazhensky
other

the

characteristics

condition
Suppose,
the

of

of

equilibrium,

Preobrazhensky
state

sector

in

equilibrium

What would

accumulation.

of

exchange

non-equivalent

and its

be the

the

effect

" as Preobrasays,
combined

that
is

the
12

-311billion

8c + 2v +2

the

cultural

for

the

are

is based on non-equivalent
What if
its

products

it

weren't?

at

world

technological
Soviet

change

and price

no longer

state

sector

plant

or trust

drop

in prices

same degree

would

would

exchange

with

could

formerly,

ability

to

state
all

of

in

the

with

the

either

as before.

in

balance,

department

probably

had to

be

balance

we had

had to

engage

in direct

half
in
in

the

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which

acquire

capital

to

was not

raw materials)

a huge deficit

productive

distribut-

Preobrazhensky,

to

(more

sector.

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measuring

departments

I and II

the

Any uniform

else.

according

money

within

same proportions

on peasant

be able

both

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There

means of

anything
in

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only

its

capitalism;

question

peasant

S.

within

the

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departments
in

evaluated

by half.

say,

accounting,

than

exchange

be disturbed.

reproduce

balance

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the

over

do under

enterprises

department

meaning

industry

exchange

sector

dependence

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state

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conditions

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are

(khozraschet)

between

the

exchange

would

exchange

of

that

let's

make a difference,

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made up via

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would

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deficit

internal
as they

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clear

capitalism
fall,

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for

the

would

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before

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and the
II,

prices

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of

function

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instead

prices,

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ing resources

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shows that

concerned

is

raw

consumption,

e Kchange

It

satisfied.

market

anything

prices

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S and P are

Suppose

State

would not

peasant-produced

exchange.

superiority

economy.

of

production,

such as transport,

means of

fund.

between

reproduction

of expanded

amount

production,

export

inter-relations

as the

services,

an equal

means of
for

products

in means of

and state-provided

and other

materials

3 billion

exchanges

sector9

peasant

up as follows;
product

it

consumption,

means of

far

surplus

12 billion,

Of this

with

divided

chervontsi,

the

products

money terms,

the

necessary

it
or an in-

physical

-312-

proportions.
In reality

the

scheme between

duction

S must exchange
in
economy

half
its

portion

obtain

needed

place

as many goods

from

P as before.

capital,

In gross
whose

the

state

prices

are

set

it

would

product

of

S equals

of non-productive

even part

of

the

year's

level.

and in a way that

necessary

even more true

those

of

private

hit

individ-

sector

be able

to

of

only

reproduce

means of

department

dependence

of

going

II

even

on raw materials

of

stock

of

fixed

even

eat

will

of

value,

this

the
consists

away the

entire
and

consumption,
"Overall,

expanded

reproduction,
is

ex-

Yet

capital.

consumption
simple

law

and much of

non-productive

of

process

equivalent

billion.

1.5

of

The deficit
fund

the

of

two billion,

the

to

over

operation

a shortage

only

the

of

the

this

at

the

would
as

and,
it

maintained,

reproduction

the

exchange
would

fairly
would

make it

material

of

the

not

definite

pre-

preceding

impossible

that
private

importance

structure

its
not

have

fixed

ex-

disrupt

these

proportions,

for

state

sector

the

productive
only

sector

the

of

The abolition

proportions.

seriously

of

the

alter

and social

elements

when we consider
products

does

example

technology

S and P in

of non-equivalent

but

state

of

""10

change between

the

the

non-productive

The economy's

result.

is

of

possibility

The simplicity

tain

existing

as significant

cludes

by

suffer

much of

breakdown

mean total
long

the

the

consists

would

economy's

consumption,

fund,

accumulation

the

with

not

c which

a large

such

terms,

would mean that

surplus

of

The imbalance
has

to

repro-

departments

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SI would

part

the

at

SIIc.

of

replacement

change,

it

since

more seriously,
in the

by P.

produced

production

both

products

now bring

would

that

nor

their

commodities.

took

variable

One look

so simple.
shows us that

of

which

exchange

ual

to

not

305-306

pages

a certain

order

is

situation

would
(which

capital.
S's

prices

are

kept

to

ob-

This
fall,
below

-313-

be
more
would

sell

would

production

state's

monopoly

of

would

worsen

disproportion

the

Consequently

by the

level

market

the world

foreign
from

cheaply,

more

both

while

Preobrazhensky's

expensive.

trade)

would

rise.

directions:

peasant

products

is

conclusion

The

well-founded:

between
industrial
Given
a discrepancy
world
prices
and domestic
in the USSR, that
is,
industrial
prices
when domestic
prices
of
industry
than world
Soviet
are much higher
prices,
an economic
in the state
that
will
ensure
expanded
reproduction
equilibrium
be brought
about
on the basis
can only
of non-equivalent
sector
the sectors
This
of private
with
production.
exchange
means that,
discrepancy,
this
the law of primitive
sort
of price
socialgiven
is the law that
ist
the equilibrium
can maintain
accumulation
of
in its
the world
the entire
system,
above
all
relations
with
ecoThis
the
operate
must of necessity
until
we have overcome
nomy.
backwardness
and technological
of the economy
of the proeconomic
11
letarian
to the advanced
as compared
state
capitalist
countries.

is

cussion

total

is

product
the

he retained

first

this

of insufficient
If
i. e.,

one billion
c,

next

be:

year

will

8.8c

+ 2.2v

Preobrazhensky

tionately,
to fall

short

sumption,
first

to

or

year's

one half

+ 2.2s

the

3.25

to

if

take

place

To this

demonstrate

to

end

the

effects

sector.
of

product
or
v.

augment

that

exchange

figure,

an incorrect

surplus

to

and surplus

would

fulfilled.

four-fifths,

then

presumes

billion.

this

surplus

accurate

v,

c,

movements

not

state

into

dis-

the

industry,

state

800 million,

The product

will
for

the

= 13.2

further

of

the

and 200 million

be secured

whole will

in

chervontsi,

go to increase

what

when he sought

example

accumulation

we accumulate

showing

of

a fairly

he took

breakdown

were

part

previous

its

S,

reproduction

of

preconditions

the

Although

illustrative,

simply

in

used

in

production

Sector

State

hypothetical.

largely

for

figure

the

Preobrazhensky

The example

if

in

Under-accumulation

Ii.

product,

12

If,

equilibrium

with

on the

due to
prices
then

the

an increase
policy,

we would

sector

private
other

hand,
in

and total
have:

the

within

system

grows

propor-

accumulation
non-productive
only

as a

700 of

were
conthe

-314+ 2.14v

8.56c

We have

a relative

as a whole
Quite

example.

P's

future

this

effects

of

of this

chapter

in both

the

Taking
duced in
deficit

first

of

those

the

form,

it

over

to
it

to

weakening
of

would
fund,

role

have

of

the

of

We need not
at

exchange

the

former's

this

thesis,

retail

great

mo-

from

If

and wholesale
this
in

the

the

the

peasantry's
P and S can
encour-

turn

will

purchase
of

share

accum-

socialist

potential
also

it

substitute

state's

marketable

mentions

the

strength-

due to

the

aggravation

prices

the

goods

particular
other

in

This

total
consump-

since

methods

from
come

the

between

SII.

pro-

personal

of

own primitive

middleman,

length

in

development,

Preobrazhensky

go into

the

reproduction

thirds

relations

fund--and

export

section

for

on expanded

consumption

output.

private

brings

it

of

can only

peasant
the

natura

purchased

which

between

with

next

a decline

to

in

by its

produce

the divergence

as he deals

in

the

sectors.

lead

will

do so as well.

about.

both

of

contracts,

the

examine

two

that

of

have

will

we will
the

is

will

postulates,

portion

ening

90 million

of

as Preobrazhensky

of a certain

ulation--must

Preobrazhensky

consumption

export

product

of

a deficit

means of

all

a retardation

goods for

one quarter

demand for

This

peasantry

almost

peasant

this

ages the

reduce

it

effects

and petty-commodity

own products.
to

chapters

-state

S, if,

lead

ensuing

detail

first

our

upon petty

Although

greater

of

experience

shortage

Pro-

all.

fall

90 million.

of

development.

the

to

P would

this

what

short

will

equivalent

amount

in

the

out

in P and a going

only

with

shortage

in means

300 in

or

chervontsi

words,

famine

and in

takes

tion

the

economic

goods

trace

mentwecan

to

here

concerned

primarily

S is

other

240 million

of

consumption,

this

of

with
In

goods

before

360 million

a part

output.

of state-produced

from

means of

fall

will

clearly

latter's

for
mean

60 in

whose exchange

production,
of the

= 12.84

shortage

and of

of production,
duction

+ 2.14s

writings.

aspect
13

of

of

famine
the

matter,

-315serious

is

of state-produced

goods.

These

and their

absence

can only

agriculture.

This

What is

peasant

more

of

the retardation

by the

mainly

we look

duction

only

its

expanded
and if

to 3.25,

the

at

two possible

stocks
of its

in

consumption,

in monetary
zhensky's
(being

tion
ferring

deposited
from

values

accumulation),
take place
cipally

famine

is

compared
state

in

to

the

sector
This

rather

strict

the state
accumulation

Gosbank)
S (and

for

laws

sector's

of

long-term

of

effect
needed

in

state

of

such monetary

be a potential

the

accumula-

expanded

trans-

of

do not

production,

prin-

that

see that

if

Preobra-

that

implements

exist

would

increase

socialist

purchases

means of

to

sales

source

of primitive

that

unsold

a consequent

with

a source

we have

an increase

and/or

that

im-

would

the

goods
in

reproduction
in

accumulation

P,

the

15
two

1)That

conclusions:

is

not

the
the

but

arbitrary,

and 2)that

maintain
merely

of

pro-

billion

growth,

we know from

proportionality;

retard

three

peasant

be a series

would

mind

sector

to

from

accumulation

production

and other

to

if

this

with

state-produced

off.

that

Even though

hence

that

slackened

ability

does not

of

impediment

artificial

the

cause

commodities

Thus we already

possibilities

in

be the

would

keep

Preobrazhensky

of accumulation

pace

topic14

machinery

had not

leads

P.

agriculture.

a severe,

modernize

immediate

obvious

purchases,

of this

been

agricultural

technique

prove

have

is

The other

also

we must
would

for

P to

to

in P, and its

keep

not

within

in

attempts

an even more

it

cutback

discussions

other

production,

commodity-product

corresponding

accumulation

means of

peasant-produced

One would

a subsequent

S without

state's

again,

could

results.

natura

the

of

deficit

raw materials.

in P., with

from P to

of

example

state

form

90 million

the

of

the

prove

exchangeable

the

part

reproduction

shortage

If

have

would

expanded

sector,

other

undermine

be
an eventual
would
state

the

is

volume

sector,

minimum
but

the

to

subject

any disturbance

necessary

state

the

level
petty

in
of

-316sector

production

From here
discussion
in

possible

as well.

Preobrazhensky
the

of

16

question

into

a theoretically

"over-production.

of

backward,

the

launches

developing

''

economy

Is

such

a phenomenon

USSR?

the

of

important

To begin with,
we have to decide
what we mean by the term "over"
If by "over-accumulation"
accumulation.
we mean a relationship
between production
throughout
and consumption
society
such that
in both departments
put into
new means of production
operation
lead in the final
to so sharp an increase
in the output
analysis
that
these goods cannot be absorbed
by
of means of consumption
the consumer market
at existing
prices,
as a result
of which the
in department
I proves to be uselessaccumulation
corresponding
then,
such a phenomenon is quite
well,
well known in capitalist
lead to a sales crisis,
the ruin of
economy and must inevitably
in both departments,
lowering
numerous enterprises
a forced
of
17
fall
in
the rate
and a
of profit.
prices,
It

is

tity

true

certainly
of means of

that

that

is

this

difficulty

in

would

solve

has exceeded
economy.

thing

this

level

The state

limits,
beyond

change between

over-production

18

consumption

the

quan-

mean that

as we look

can be rectified,

at

we
the

we see

can

and these
this

would

the

This
in

a lowering
from

of
the

may mean that

the

by the
prices

dictated

given

be artificial
and private

of means of consumption

whole

expansion

and disrupt

the

sectors.

In

would signify

goods

of

the
cer-

within

lower

Any-

costs.

balance
this

state-pro-

these

base

wages only

ability

and Preo-

of

of

of

prices

story,

technical

to

state

accumulating

industrial

surplus

and raise
by its

by the
were

consumption

A relative

lower

socialist

a misassessment

far

" since

"over-accumulation,

VKA 22.

permitted

are

is

he saw

There

question.

of

means of

wages and/or

problem.

recognized

duced means of

If

policy.

type

from

came solely

in

a rise
the

brazhensky

tain

it

that

then

As soon

a similar

this

overcoming

wages and prices

unsold,

Does this

ways it

and the

a greater

the

not

he considered

may produce

type?

capitalist

case.
Preobrazhensky
In From NEP To Socialism/posed

little

its

the

of

sector

can be sold.

than

disproportion

this

of

state

consumption

have over-production
sources

the

of

case

exthe

a maldistribution

-317-

of

the

forces

productive

of

industry.

state

This

between

exchange

the

in

"over-production"
social

labor

sector

rearranges

in

rise

the

This

and because
was to

in

argue

of productive
production
fer

of

problem

duced,

and they

in

not

enough just

tor

are

all
the

then
to

improperly
(which

tion"

USSR).

the

satisfied,

the

historical

fact

capital

base.

is

Even

Soviet
of
In

its
the

the

circuit
the

economy

II

justified
of

out-

all

that

further

would

after

still

the

trans-

specified

the

a temporal

also

values

and in

of

decimation

War Communism,

all

the

coris
sec-

state

factor

pro-

correct

It

the

in

the

"over-produc-

equilibrium

come up against

and the

the

do not

of

pro-

are

nonetheless.

actuality

conditions

means of

reproduction

of

shifts

and replacement

retirement
is

and

such

of

reserves

of
resources
is
this/an
aggravating

other

Capital,

Otherwise

be broken

underlying

own right,

of

productive

backwardness
period

of

Preorbrazhensky

each department

of

will

real,
if

the

necessary

and that

the

ample

elements

needs

allocated

production

its

argued

reproduction

material
at

Volume

Marx
in

in

what

on hand.

are

words,

say that

in

if

only

an imbalance

the

has with

a crisis.

momentary

state

and a lowering

Kapitalizma,

subsistence

exchange

the

of

the

until

both

Marx,

possible

necessary

goods famine
in

it

connection

other

from

come

distribution

of

and SII,

of

sector.

thirties.

from

the

time,

SI

it

realm

an economically

some clarification,

are

In

if

proportions,

state

precipitate

capital.
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both

VKA 17 and zakat

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respond

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favor

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This

alone

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sector

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capital

capital

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stems

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re-equipment

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nor

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more,

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capital

obvious

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productive

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the

Preobrazhensky,

not

requires

the

of

does

state

consumption

argument

disproportion

It

throughout

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within

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society.

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the

of

of
state

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pressing

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fixed
economy

-318rapidly

expand

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back

quipment
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occur
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tention

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The implications
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obvious

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continuity
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plan
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expanded
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process

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production

peasant

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that
sector.

production

and equipment

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cover

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process

the

the

accumulation

their

replace-

of

growth

lowering

less

they

them.

be an inadequate

of

them

worth

to produce

from

will

con-

themselves

production

values

of

at-

whose production

plant

supply

SI.

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costs

indus-

of

SII

to

accessible

and

the

reproduction
itsneeds
delayed
will

of
the

be in

the

department

fixed
more

the

under-accumulation
Thus

must

sector
in

is

quite

this

temporal

dis-

into

account

It

by any means,

attention,

state

and Preobrazhen-

immense,

are

observation

them adequate

present

impediment

P,

in

in

called

19

of

planning
of

of means of
the

accord

means of

means of

making

expansion

and new machines,

production

output

The result

thus

production,

No further

these

down the

economy

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any values--not

slow

Soviet

the

withdrawal

come.

of

here

and a retardation

also

departments

sky did

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hilt.

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Preobrazhensky

production

as do the

construct,

more,

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the

of

kind,

production

the

new plants

in

once again

this

of

and e-

disguised,

the

of

an increase

previous

amount

some years

of means of

construction

be employed.

will

to

reconstruction.

the

slack

"restoration"

capacity

that

demands

this

of

of

plant

capital

insufficient

of

period

period
fact

crisis

of

this

the

the

deal

somewhat

without

idle

existing

remain

existing

requires

sumption

potential

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the

and utilizing

was a great

bringing

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could

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had stretched
could

the

existed

With

All

There

production

means of

This

operation

capacity,

as it

long

into

basis

on the

merely

capital
serious

take
I
in

and chronic

to

come,

represents

for

years

accelerated

the

future.
the

and the
needed

accumulation

and

in

The
deficit
greater

expansion
the

state's

-319of

production
This

order.

ply

we do not

the

aspects

all

ment of
that

this

This

is

is

have

of

only

and equipment

will

not

the

start

Union

in

after

years

the Soviet

on in

the

the first

place

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of fixed

capital

out

later

that

reserves

accumulation

of

the problem

says

large

absorb

at

fixed
that

sense,

the

man resources
in

ment will
between

of
of

in
its

the

labor

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for

of

tie

up and

will

of

cause

combined

departments

II

the

needed

nature

in

any goods
special

very

and hu-

material

in

in

as poor

a country

disproportion

capital,

and the

production.

of

fixed

of

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investment

a tremendous
of

in

can be

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producing

only

in
amounts

massive

sector

without

this

exists

The very

state

demands

period

production

replace

a temporary

turn

SI and the

the

characterizes

problem

year.

four

to

pointed

replacements

"over-accumulation"

Union

what

conditions

to

year

I of

social

reconstruction
Soviet

as the

capital

from

department

quantities

that

these

new plant

"three

and replacements

anticipate

capital

this

Soviet

that

himself

economy must

retirements

to

We can talk

return.

The reason

Under

once.

fact

not

20

itself.

for

Preobrazhensky

Soviet

the

is

time, " and

to

period

"sim-

develop-

the

respect

production

construction"

period.

between

nor adequate

means of

their

with

but

sense,

coordinating

transition

the

when he

correct

The technical

same example.

all

a balance

neither

in

produce

this

partly

first

the

of

in Marx's

reproduction

conditionally.

of

only

harmoniously

of

inherent

but

is

priority

over-accumulation

expanded

a problem

true,

a political

Preobrazhensky

impossibility

material

is

production

means that

that

states

means of

This

invest-

the

exchange
sec-

and private

state

tors.
We have already
the reproduction
share

of

accumulation

department
capital

of

I grows.

and variable

indicated
fixed
going
Then,
capital

how this

We have

capital.
to
even

would

increase
if

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increased

the
size
(as

work
to

only
stock
of
they

our

discussion

imagine

that

fixed

capital

in

of

circulating
must,

though

of

the
in

constant
not

in

the

-320-

total

and the
for

with
if

to department

I.

of labor

backward

atively

the increased
the

tion

period

exchange

this

of department

II.

ductive

tically,

was,

for

no values
I will
have

lag

emphasized

if

have

a rather

we add to

further

long

behind

the

the

growth
in

II,
def-

a real
its

to replace

part

pic-

gesta-

we see that

represented

on its

pro-

this

over-accumulation

repeatedly,

rel-

being

solution

Now,

some years,

an apparent

come from

accumulation

short-term

even

department

be a shortage

must

The whole

would

from

will

which

will

I and an inability

rise,

in

fact,

the

while

forced

there

power.

I available

pro-

capital.

This

not

This

article

to Problemy

previous
warn of

occasions.

least

through

Ekonomiki,
It

is

perfectly

industry
This
were

not

be utilized

not

be maintained.
department

soon

the

which

genuinely

needed

because

proportionality

Preobrazhensky
II

and a rise

in

the

ability

the

called
consumption

the
for

in

to

Yet

of

other

sectors

resources
to

The means of
but

they

could

as a whole

economy

as the

could

transfer

sense,

a shift

on

Union.

Soviet

the

draft

the

referred

relative.

absolute
in

of

in

labor

Preobrazhensky

in

was only
in

already

that
I

the

"over-accumulation"

underwent
of

The massive

consistent.

dras-

attacked

we have

department

outstripped

power

militarization

may seem a paradox

in

labor

of

Preobrazhensky

that

was cut

Consumption

solution.

exploitation

'?over-accumulation"

heavy

production

of

was a solution

the argument

keep up.

Stalin's

rate

the

camps.

into

yield

We will

in department

labor

replaced

Proportionality

possible

new investment

as Preobrazhensky

which,

into

of

in

transferred

were

possible

being

production

raw materials,

only

department

of

of

production.

up--the

and will

not

mention

agricultural

that

fund

is

is

stock

fall.

will

capital

this

exploitation

fact

ture

icit

to

capital

amount

departments

If

be bottled

cess will

the

productive

not

power,

fixed

up),

other

be possible

only
II

built

stock

exchange

depleted

since

same proportions,

of
only

resources
way in

could
back

which

-321II

department

could

both

given

compete on the

means that

for).

would call

its'

cannot

and large-scale

industry.

of this

dilemma.
in

of socialism

this

is

argument

could

of

to

access

in

the

technology

modern

denial
lost

critics

in

only
the

of

in

revolution

West as the

an explicit

de-

cannot

on Preobrazhensky

attack

agri-

drive

the

while

to

keep up with

not

Industry

circle.

without

and his

one country,

inability

character

agriculture,

a revolution

its

at

unsus-

any industrialization

old

the

Yet

no time

1932

way out
possibility

in picking

up.
In another

with

His

the

place
Hence

advocating

allegedly

pre-industrial

that

of

take

the countryside

for

in

(and

production

products
back

We are

industry

of

I.

was itself

proportionality

agricultural

a transformation

without

velop

this

and the

market)

demand for

the growing

that

department

with

backwardness

the

world

(which

culture

proportionality

he recognized

the same time

tainable,

retain

Preobrazhensky
in

reproduction

of

VKA 22 from

again

stressed

part

the
the

one we are
temporal

dealing

currently

dimension

to

expanded

USSR,

the

It is quite
that
crops,
of technical
obvious
expanded reproduction
is
from
the
sector,
state
since it requires
means of production
development
in its
most intimately
with the conditions
connected
But,
heavy industry.
in state
of reproduction
and accumulation
II of the
in department
hand, expanded reproduction
on the other
in
is intimately
the expanded
state
progress
sector
with
connected
from
in
the
technical
which
reproduction
economy,
peasant
of
crops
it obtains
its raw materials.
Thus, as a result,
expanded reproduction
the prior
II of the state
requires
of department
sector
I of the private
sector--speexpanded reproduction
of department
technical
that part
cifically,
crops--while
of it which produces
the prior
exexpanded reproduction
crops requires
of technical
I of the state
secpanded reproduction
of department
of the part
tor that provides
it with the necessary
means of proadditional
duction.
Thus both state
industry
light
production
and peasant
in seeing
that
accumulaof technical
crops have a common interest
tion
in heavy industry,
the expanded rewhich must always precede
21
be as rapid
production
as possible.
of these branches,
What we have

such accumulation
the goods

so far,

established

famine

in
in

department
the

short

run,

however,

says

I of

state

the

and hence

that

sector

retard

to

attempts

the

will

effect

exacerbate

growth

of

agri-

-322The temporal

culture.

I's

of department
each cycle

with
other
poral

sequence

the state

constant
of

departments

our
into

soon run

at

the

center

of

note

that

this

breaking

technique

the state

sector

further
in

the

and
of

state

peasant

the

same:

iat.

But

could
ability
socialist
again,

why
only
to

and

kind

of

its

In

agriculture.
The
this,
the

for

need
along

argument

be resolved
control

the

direction.
was not

politically

both

in
by

the

access

expanded

from

political

to

more
the

the

cards.

whose

tasks

world
with

res-

the

the

withcapital
block

stumbling

Western

are
proletar-

from

climate

The
of
world

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ar-

one step

conclusions

the

in
of

fixed

its
the

division

own

the

contradiction

pessimistic.

Preobrazhensky

Yet

problem

restore

assistance

its

reproduction
the

the

would

he could

Now, however,

political

is

to

itself,

economic

relations

this,
on

regime.

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altered

country's
And

Soviet

alleviate

could

left

alternative

both

to

cases

VKA 22

if

Union

only

located

basic

the

immediate
with

has

from

as we ob-

Soviet

the

accumulation.

that

There,

had completed

inability

growth

at

I of

emphasis

as agriculture

latter

finds

and

the

attempts

Preobrazhensky

sector
the

stifle

on positive

line,

the

of

development

to

tem-

broken.

change

that

argued

was seen

as the

as soon

different;

down

a major

hostility

would

is

From NEP To Socialism.

economy

and embarked

sustain

plains

the

of

places

process,

West was the

capitalist

of

department

the

in

access

which

economic

end in

the

would,

Hence the

its

primitive

gument is

marked

capital,

production.

a dead

point

toration

the

and accumulation

fixed

disrupt

he also

given

envisage,

its

Introduction,

A revolution

resources.

means of

in

replacement

temporarily

industrial

argument

the

primarily

reproduction,

sector

in

capital,

expanded

Preobrazhensky's
served

in

accumulation,
to

of

We should

discontinuity

1923,

ex-

impasse

labor

and

market

in

time

and

the
a

-323-

The

III.

Goods
Market

Famine

To complete
to

we turn

famine

of

the shortage
in

reproduced

Union

Soviet
Much of

of

the previous

Total

the

the

world

so far

said
capital

in

the

and

material

detailed

in

impossible

in

account,
is

the

economy.

fixed

of

actually

compels

we have

what

accumulation

that

I than

in

is

the

VKA 17, which

department
reverse

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the

is

Soviet

ment II,

887.5.

third

the

of

to

assumes

For

He introduces
fund

point
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department

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= 12,00022
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to

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reproduced

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to

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capitalist

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surplus

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He assumes
via

exchange

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product

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in

capitalism
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affairs

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one complication.
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the

of

capital

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12 billion

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of

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return

state.

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composition

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components.

II--three

the

reflected

Preobrazhensky

cumulation,

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the

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2100c
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partment

historically-

Preobrazhensky's

to

goods

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imbalances

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how harmonious

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the

World

production

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in

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showed how

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implicit

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forces,

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reproduction,

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of

analysis

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accumulation,

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trade"

output

chervontsi,

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Marx's

structure

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With

simultaneously.

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capital

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section,

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Relations

maximum inter-relations

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conclusion

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Soviet

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-324-

petty-commodity
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tion

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-325The deficit

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SII

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The reason
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old

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for

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in

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the

of

has a higher

in

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the

distance
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capital
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capital

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Clearly

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II

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composition

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will

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previous

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capital

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The tendency,
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We know from

capital

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composition

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than

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off,

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so much surplus

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down of

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capital

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sector"

5)the

over-accumulation

the

state

any output;

more
if

a transfer

case

produces

deal

that,

towards

so much larger

so great

capital,

ual

How is

necessitate
not

the

capitalism

replace

and

country.

3-5).

And yet
SI.

in

particularly

Chapters

to

of

yield

a great

us,

above,
in

production

study

tells

yet

accumulation

learn

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withdrawal

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We can actually

er is

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s/x,

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consequent

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Preobrazhensky

share,

consumption

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"sharp

our

non-productive

personal

3)the

industrialize

to rapidly

of

the

SIIc);

which

new construction
necessity

lower

4)the

years;

previous

level

the

with

of

in
foreign

of

it

this

production

interruption

decline

2)the

i. e.,

atrributes

means of

l)The

industry;

Soviet
in
ed

of

390.8,

now equals

Preobrazhensky

factors:

following

to the

production

when we began,

than

larger

means of

IIc

ex-

a grad-

the

deficit

of means of production.
This

situation

is

almost

exactly

analogous

to

the

one in

VKA 17,

-326Preobrazhensky
where

(see above,

is

faster

grow

IIv

of

growth

in

lag behind

that

and the discrepancy

would

have over-accumulation
does

not
In

conclusions.
I to

partment
take

would

would

catch

iminate

itself.

this

rapidly

relations

would

the

with

and accelerate

the

forces

to

hostile

the

Far more important

base these

capital

are the

effects

duction

to

that

the

we also

is

take

in

SII,

of

the

place

economy will
have

to

the

assume that

our

famine

present
would

stop,

we would

even

that

in

to

work

three

did

in

accumulation
department
itself

not

aggravate

The

out.

the

the

of

el-

would

overcome

goods

state's
scarcities

existing
in

II

this

of

disruption

de-

much less

years,

differentiation

fact

that

higher

the
this
P will

the

favor

assumptions

those

of

organic
the

of

lines

same technical
grow

For

out

expanded

we have

makeup.

proportionately

we

capital

of

composition

country.

we traced

upon which
The preponder-

invalid.

frankly,

backwardness

retain

would

dicatatorship,

and its

along

for

it

If

quite

are,

in

consequences

would

class

capital,

Preobrazhensky's

of

for

significant

proletarian

extrapolations

ance of

of

slower

and accumulation

goods

time

of

state.

It

Hs,

Eventually

and social

countryside.
process

the

surpass

contract

cause

relatively

validity

period

to

the

happen

tendency

and then

Soviet

the

I.

the

commodity-product

23

the

place,

long

in

would

to a IIc

s goes

constant

contract.

nullify

even begin

for

increase

department

up with,

its

of

IIc

I's

of

The same will

to

The political

be unacceptable

growth

growth

begin

first

of

in

capital

initially

more of

however,

of

I.

actually

the

not

rate

the

an inordinately

deficit

famine

in

part

Soon,

department

a few years

the

of

over-accumulation

we saw that
because

than

the

composition

own relative

There

the

retard

in

its

I(v+s/x),

than

including

II,

After

This

200).

exchanging.

would

as a whole

example.

is

it

which

organic

overcome

so much larger

already

against

to

order

169 and p.

p.

to

continue
that

in

II

department

a higher

takes

to

repro-

assume

Furthermore,
with

S, other-

-327SI
would
wise

not

half
one

of

its

sumption

is

incompatible

on its

constant

of production

from

too primitive

to

sector.

the

or

more true

is

of means of

basis.

cal

it

of

growth

does
will

not

not

foundations.
of

the

which

embody all

place

since

the

It

same efficiency.

It

of
time

the

on an increasing
its
rise,

behind

by its

very

scale.

industrial
and rise

S.

workers

SH

could

the

keep pace

in

down.

supply

with

an

and put

on

circumstances

Then SI

not

the

could

not

military

replace

all

Thus the

very

re-

and
its

of
fact
the

violates

production

of
prem-

department
same time
worn

old,

I will

grow faster

change

its

ones
nature

put

into

means that

As a result,
infrastructure,
rapidly.

that

Fairly

capital

have

machines

as department

soon

organic
it

will

with

machines
taken
In

operation.

its

than

technologi-

them with

improvements
were

fixed

out

replace

will

and indus-

Accumulation

problem.

technological
original

how great

be transformed

the

the

replace

workers

will

the

not

the

agriculture,

to

to

even

P.

at

will

will

accumulation

of capital

of

peasant

not

is

This

above-mentioned

means of

mean that

it

still

is

industrial

P could

then

erased

means

technology

reproduction.

break

would

exhaust

only

dition,

and reconstructs

serious,

state-produced

as the

asEven

of

same rate

have

lag

or maintain

As SI accumulates

machines

P to

cause

growth

the

agriculture

the

described.

of

no matter

would
of

just

own level

simple

For

all

The system

still

trialization
II.

sector,

Even more

a proportional

This

SI.

This

Its

rapidly

is

and SIT

year.

an adequate

at

this

separate

we have

limited,

Any or

capital.

a goods famine
of

that

from

capital

apparatus.

constant

ise

even

to

variable

expand

technically

would be sufficient

state

to

probably

production

a collective

new its

it

fund,

consumption
each

24

was not

industrial

expanding

without

sector.

when we consider

whose expansion

expand

famine

goods

expanded,

sustain

system

state

permit

P in

the

with

the

its

of
in

capital

P cannot

own terms,

If

one third

realize

will

ad-

replace

I restores
composition
overtake

-328composition

organic

the

disproportion

identical

in

over-production
If

"switch

this

worked
is

out,

the goods famine

of

means

of

grow

towards

an over-accumulation

Theoretically

have this
for

expanded

from

the

growth,

if

even

up SII's

deficit

chapter,

the

it
in

its

peasant

sector

the

state

additive,
upon the

ials

will

for

sector

the

and for

and not

those

of

automatically
products

The Soviet

state

demands

in

emanating

it

an increased

from

deficit
political

not

could
the

labor,

make

next

II

with
fertil-

can only

in

SII,

we

But this

be proII

of

industry,

on the

in

PI,

of

department

of

produced

of

state

artificial

agriculture,

implements
with

has the

production

in the

department

that

in

condition

show in

steel,

on-

pos-

an obvious

either

it

limited

output

as a whole.

Accumulation

industrial

the

magnitude,

production

produced

bring

in
is

cement,

the

forces

has rather

As we will

sense

means of

Nor can we make up the

SI,

this

complementary.

provision

and other

In

right

means of

of

the

same tendency,

productive

PI

provide

cannot

then

on in

under-production

sector

as machines,

myriad

industry.

the one hand,

SI,

the

or any of

duced within

such

the

in

form.

material

the

there

while

by transferring

increase

the

has

industry,

comes later
have

production.

SIIc/v

state

deficit

the

state
in

was possible

means of production
izer,

the

of

be

tendency

than

however,

any

means

the

11.25

Growth

complication.

will

previous

still

rearrange

that

in

it

department

fact

VKA 17--there

from

Even if

This,

have

larger

production

PI.

we will

of

the

becomes

hinder

I would

reproduction

before

make up this

in

then

a deficit

and

we will

in

output

Aside

further

in

We could

sector;

department

sector's

we outlined

worse.

we might

increase

and

development,

economic

to the peasant

SII,

occur
SIc/v

will

in

II,

if

of

sibilities.

what

should

process

so as to

to

i. e.,

a shortage

still

capital

department

point"

itself

of

while

on
are

other,

dependent
from

etc.,

plant,

demand for

raw mater-

PI.

by transferring
task

to

capital
raise

the

from
standard

SII

to
of

-329the

of

living

working

and the

to

raise

to suppress

this

ability

as we argued

The acquisition

Introduction.
our
sciousness

population,

working

the

out

of

standard

level

of

by the

living

of

contradicts

this

tion

forces

SII

be sufficient

never

could

is,

that

tion--not,

the accumulation

a large

such

will

reduce

the

tion

in

present--we

the

brings

with

as compared
relative

the

of

quantity

must

add the

discovery

to

SII,

in

and that

in

under-accumulation
In order

in SI the

economy would

to

of fixed

and circulating

are left

with

the

ine of means of

the

to

production

state's

the

without

inherent

capital
that

all

to

a tendency

towards

of means of

in
have.

USSR cannot

erase

from

func-

in SI

not

aid

once

capital

of

and overcome

does

at

industrialization

that

leads

pro-

the

deficiency

its

reserves

Once more we
the

goods

industrialized

other

in

need to

can actually

a flexibility
it

it

produc-

the

production

movement

that

that

conclusion

it

possess

capital

some realloca-

means of

composition

so doing

this

reverse
have

organic

the

country's

the

consequences.

fixed

country's

production

of

for

conclusion--that

means of

an increase

Any need

contradiction

of

it

duction.

initial

state's

and necessary,
of

political

the

class.

While

shortage

a new con-

upon

working

possible

a further

To our

of

necessary

is

dire

uncovered

part

class

demand.

SI

to

rather

process.

basic

make up the

without

we have

As a result

replace

to

while

in

extensively

depend

the

of

subsistence,

from

working

a new culture

industrialization,
of productive

rather

famcoun-

tries.
What if
Foreign
It

the

Soviet

trade

would

not

substitute

would

Union

certainly
for

subordinate

petty

production,

Yet none of

these

tasks

can meet
or not

its

the

demand for
Soviet

state

had access
not

the

need

to

out

production.

accomplish

this

division

world
for

the

industrialize

and establish

means of

the

be a panacea

can be carried

can

to

the
unless

economy,

groundwork

the

for

meagre

to

planning.
economy

entire

The question
with

labor?
ills.

country's
the

the

of

is

whether

resources

330-.
domestic
the
of

balance

the

one of
tical.

It

tions

with

in

is
the

preservation

In this

and other

parts

neither

department

of

state's

department

I to

of means of

er its

duced means of

I to

construct

the

time

iet

plant

economy to
fixed

crisis

in

this

tion

cost

to

relations

with

values

of

P,

currency

it

200 million

the

from

390 in

world

will

the

from

cov-

the

allow
de-

have to

the

seen,
state's
the

can permit

Sov-

reproduction

by ameliorating

the
in

a breakdown

the

to

the

state

in means of
first

prices,

the

production
it

can export

worth

200 million.

year),

can purchase

ecoIf

accumulation.

consumption,

market

as a prim-

serve

also

private

socialist

it

will

for

as we have

in

sup-

countryside.

say means of

at

first

would

forestalls

chervontsi

obtains

it

add that

trade

primitive

of

that

market

sector

will

difficulty

resources

the

foreign-pro-

trade

discontinuity
to

for

trade

imports

This,

foreign

foreign

400 million

of

do so.
needed

state

for

the

production

needless

that

as it
foreign

around

the

showed a deficit

foreign

get

entire

transferring

products

which

of

showed that

adequate

foreign

II

important,

temporal
is

It

as a vehicle

example

as soon

critically

adds

has a deficit

With the

that

character

wait

to provide

away,

to

to

afford

capacity

means of

the

way the

for

e.,

agricultural

rela-

to the ad-

access

and social

could

department

and equipment

relieve

exchange

ary channel

(our

poli-

Union's

Preobrazhensky

For

As a result

Preobrazhensky

state

gain

is

economy on terms

writings

its

More

these

capital.

general

nomy--i.

right

as a whole

fund.

of its

its

to

political

sector

develop

and withdraws

accumulation

state

production.

produce

his

of

production.

sector

partment

takes

the

shortage

current

the state

the

of

Soviet

the

view

it

e.,

Revolution.

the October

plies

we must

but

question,

forces--i.

class

international

the

of

of

a technical

As an attempt

economy:
labor

of

just

not

that

context

world

the

is

and development
this

division
vanced
would permit

This

economy.

means of
but

which

producwould

-331if

400
million
cost
port
state

sector.

Conversely,

alent

exchange

would

for peasant

grain.

Soviet

is

All
Soviet

of

these

Union's

market

tinued

e. g.,

cannot

costly

or

reasons

The exin

accumulation

abolition

of

process,

and state

the

non-equiv-

wiping

the

out

procurement

make up deficits

particular
for

produce

technical

prices

Preobrazhensky

lever

to

materthe

which

or whose

27
that

conclude

the

with

the

world

for

the

economy's

flexibility

of

certain

reasons,

inadequate.

controlled--relations

an essential

in

raw materials,

quantitatively

prompt

close--and

are

this

prices

can help

production,

too

disrupt

market

trade

economy either

production

ist

of

elements

a means for

Union.

26

foreign

Finally,
ial

world

Soviet

the

see how the

we also

completely

between

differential

in

becomes

thus

surpluses

of peasant

internally

produced

capitalcon-

growth:
Thus

for
that
the third
we arrive
at the conclusion
precondition
in our system
is the closest
link
the
equilibrium
possible
with
built
distinctive
world
economy,
upon the very
nature
of our exis a general
When there
deficit
ports
and imports.
of domestic
indusin particular
production
of means of production,
when heavy
is underdeveloped
try
to the demands of the domestic
relative
to the overall
state
of inand private
rate
market
and relative
dustrialization
for
vie
import
of
necessary
country,
our planned
has to be of such a volume
means of production
comand material
position
of
regulator
as to serve,
so to speak,
as an automatic
the entire
to
ceasing
without
process
of expanded
reproduction,
28
be a source
of accumulation.

That this

world

To trade

on the

equivalents

economy

for

size

would equal
value
ial,

That
that,
the

terms.
and not

200 million

market,

whatever

would import.
ficient

world

taking

deficit

absolute
in

grains

Soviet

Union

words,
quantitative
or

agricultural

the

exchange
in

the

raw materials

If

the

and import

value
it

production

be of

account,
state

had to

disproportions
nature.

exchange

had to

into

production

means of

to

production

non-equivalent
of

had

means of

capitalist-produced

means its

In other

the

problems.

other

one presented

was a capitalist

state

could

400 million

it

sector

be of

suf-

in

a materexport
in means

-332this

of production,
the

I
of
ment

state

in

the

both simple

be a case

merely

of

quantitative,

right

responding

amount

the

the state's
of

equilibrating

my.

It

could

be a lever

the Soviet

Union

of Western

that
could

would

Western

proletariat

The following
pation
could
itical

in
not

the

world

overcome

conclusion--the

irrefutable.

have

to

division
the

goods

will
of

to
the

could
Soviet

the

in

the

the

cor-

to

aand

the

play

the

Soviet

not

overcome

trade,

econo-

country.

the

Even if
on the
this

would
And

and simple.

pure

any capitalist

was not

traded

system.

foreign

in

It

obstacles

political

was aid,

among other

show,
labor

famine,

impossibility

would

Only

the

it.

provide

chapters

within

but it

engaging

from

it

was inadequate,
market

process

needed

for

existed

effectively

foreign

its

What it

would

being

the

immanent

Then

equilibrium.

for

overcome

be forthcoming

not

such

accumulation,

were

capitalism

not have been enough.

this

of

equi-

(and

and importing

production

accumulation

sys-

capitalism

that

Peasant

the

the

needed.

raw materials

great,

depart-

be in

chapters,

form,

enjoy

too

terms

of

relationships

concrete

production

were

not

equipment.

shortages

extensive

that

did

peasant

own needs

role

ones

economy

industrial

broad for

part

qualitative

of

a question

simply

but
of

Soviet

But the

means of

basic

the

previous

exporting
wrong

In value

under
in

economy)

production

non-equivalence,

derived

reproduction

the

400.

for

we have

the Soviet

in

equal

allowing

that

and expanded
for

implicitly

again

sense

deficit

the

had to

sector

would,

tem as a whole
librium,

means that

on the

basis

things,
of

market

and why Preobrazhensky's

of

socialism

in

why particiexchange
main

one country--was

pol-

-333NOTES TO CHAPTER 10
153.

1.

See above,

p.

2.

VKA 22,

29 (Spulber

3.

In the discussion
which follows
we introduce
our
SI and SII for the two departments
of the state
K and P for the capitalist
and petty
production
tively.

4.

Non-productive
consumption,
as Preobrazhensky
points
out, refers
to the relation
type of consumption
strictly
of this
to production.
Marx's
Here he retains
notion
of the term, where productive
conis that
into production
(wearing
sumption
which immediately
enters
the consuming,
i. e., exploitation
out of means of production,
of
distinct
labor power--as
from the consumption
of the laborer,
Against
which is individual
consumption).
this
stands individual
the laborers
consumption,
which sustains
In the
and capitalists.
however,
Preobrazhensky
is linking
sense used here,
the distincfrom non-productive
tion of productive
to that made by
consumption
(that
Marx between productive
which creates
surplus
value)
and
(that
These categories,
non-productive
which does not) labor.
we
should note,
are devoid
of moral connotations,
except to the extent
i. e., those norms of behavior
that we speak of class
morality,
ashistorical
interests
sociated
with the divergent
of conflicting
This is why Preobrazhensky
classes.
emphasizes,
quite
correctly,
be socially
that non-productive
consumption
may still
necessary.
The Soviet
to need some form of state
regime will
continue
apparado not
tus, a military,
etc.,
yet these parts
of the population
but rather
to society's
add material
values
withdraw
values
wealth,
from it.
In theory,
the category
of non-productive
of course,
disappear
just
consumption
will
as our meaning of
under socialism,
labor
be transformed
productive
away from that of Marx to
will
labor
to socially
refer
useful
and nothing
more.

p.

trans.,

p.

126).
own designation
of
sector
and retain
sectors
respec-

in Soviet
Not all
society
was soconsumption
of the non-productive
however.
The values
middlemen
cially
necessary,
which private
in the course
trade were neither
productive
withdrew
of domestic
Nor would many of the privileges
accorded
nor socially
necessary.
bureaucracy,
by
to bourgeois
the
over
specialists
or appropriated
forms of
their
and above what was needed to maintain
particular
labor power or induce
necsocially
them to work, be considered
to
(we are speaking,
prior
essary either
of the period
of course,
the consolidation
and the bureaucracy).
of power by Stalin
5.

From

6.

The above discussion

pp. 29-35.

7.

draw attention
See above, pp. 75-6, Note 5.
We should particularly
in
debate
Larin
to the reference
Preobrazhensky's
with
there
to
Larin's
Preobrazhensky
Ekonomicheskie
attacked
NEP'e.
Krizisy
pri
demand for a blanket
by
lowering
agriculthe
peasantry
of
milking
Preobrazhensky
This,
industry.
tural
those of
prices
and raising
did
had created
the
not
peasantry
maintained,
where
a situation
incentive
even have enough money on hand to pay its taxes,
and its
for
to produce
instead
of raising
He
a poicy
was stifled.
argued

NEP

To

Socialism,

p.

is

81.

drawn

in

large

part

from

that

in

VKA 22,

-334prices,
along with a lowering
But
of industrial
prices.
these could only come about if they were justified
by savindustrial
production
by a rise
costs,
in the
accompanied
of labor,
and by an expansion
productivity
of the foreign
market,
larger
which would open up the prospect
of marketing
sums of peasabroad and hence the possibility
ant produce
the peasof allowing
in part,
to benefit,
from this
at least
improved marketing
antry
situation.
peasant
both of
ings in

8.

The problem
of non-equivalent
exchange was not unique
As early
Union.
as 1920, Gramsci made the following,
observation
prescient
about the tasks of a proletarian
in Italy
towards
the peasantry;
and its policy

to the Soviet
extremely
revolution

has its deepest

"Italian
capitalism
roots
and the seat of its hegein the industrial
Italy,
Italmony in Northern
centers
of Northern
The Communist revolution,
itself
y.
which in Italy
presents
as a
in industrial
technique,
revolution
as a problem of the equalizalabor
tion of the conditions
of agricultural
and the conditions
of
industrial
have its major seat in the North,
labor,
The class
will
be confronted
of factory
workers
will
with the tremendous
problem
how can it succeed in building
produced by the War:
a State orhas the means to industrialize
that
ganization
agriculture
and is
the peasants
able to provide
of labor as
with the same conditions
it will
be possible
to exchange one hour of
the workers,
so that
labor
labor,
so that the
agricultural
with one hour of industrial
is not destroyed
in the exchange of
by the countryside
proletariat
in absolutely
of
conditions
produced
non-comparable
commodities
industrialists
labor?
This problem,
are unwhich the capitalist
if it is not resolved,
smash the
able to solve,
and which,
will
by a workers'
bourgeois
by the workers,
State,
can be resolved
by
State in Italy--as
it has been resolved
and is being resolved
by the urban inbe resolved
State.
It will
the Russian workers'
Comdustrial
become
the
the
of
agents
principal
will
workers
who
"
munist revolution.
Antonio
Gramsci,
Pamphlet Series
9.

Soviets
No. 11,

in
pp.

Italy,
27-8.

for

Institute

Control

Workers'

Throughout
Preobrazhensky
takes the capitalist
and petty-commodity
both because of t he lack of adequate
statistics
sectors
combined,
is
It
for the capitalist
for
simplicity.
a nalytical
sector
and
in
22
VKA
is
he
with
that the main relationship
concerned
clear
is that between state
industry
and peasant production.

10,

VKA 22,

11.

Ibid,

12.

Exchange with peasant

in S's total
the rise
chervontsi.

13.

See From
98-103.

14,

See above,

15,

This,

p.

p.

of

37 (Spulber,

37 (Spulber,

135).

p.
p.

135).

production
product,

NEP To Socialism,

p.

211,

course,

Note

reflects

pp.

Original

emphasis.

with
proportionately
should rise
billion
3,3
10%,
by
is,
to
that

22,52,

and

The

New Economics,

pp,

14.
the

contradictory

nature

of

the

period

of

-335socialist
accumulation.
Momentary growth
primitive
in the peasant
for the inudstrialization
must be sacrificed
sector
of the state
which alone can ensure that agriculture
sector,
expands in the
future
on a new technological
basis.
and social
This case is similar
to that
of the wage fund of the workers
in state
industry,
the expansion
of which must also be retared
in the interests
of
industrial
accumulation--not
devastating
without
equally
political
effects.
39 (Spulber,

16.

VKA 22, p.

17.

Ibid,

18.

From NEP To Socialism,

19.

VKA 22, p. 41 (Spulber,

For Preobrazhensky's
pp. 139-40).
treatthe general
problem
ment of this
within
context
of the accumulation
(in zakat Kapitalizma),
capital
of fixed
under capitalism
see
above, p. 231, and p. 239, Note 11 (the latter
to the
also refers
in capital),
passages
relevant

20.

VKA 22,

21.

Ibid,

22.

figures
For his
for
breakdown
the percentage
between
of the product
departments
I and II,
Preobrazhensky
Perspektivy
Razvertyvancites
iya Narodnogo
Khozyaistva
SSSR na 1926/27-1930/31
gg (Perspectives
for
the Development
Economy of the USSR from
of the National
1926/27-1930/31),
Gosplan
SSSR, pp.
123-24.
Preobrazhensky
also
level
in the state
is very
that
the overall
states
of output
sector
he gives
(14.35
here
billion),
but gives
to the figure
close
no
The same is true
for
figure
source.
the proportion
of his
of the
that
output
of each department
of the state
sector
goes towards
exthe peasant
change with
sector.

23.

Taking
deficit
which

39-40

pp.

p.

p.

(Spulber,

42 (Spulber,

52 (Spulber,

137-39).

pp.
p.

38-39

pp.

pp.
pp.

138).

140-41).

Original

emphasis.

152-53).

for succeeding
accumulation
increase
in absolute
will
it will
to go down.
start

years,
terms

that the
we would find
after
up to year three,

24.

The notion
SI would continue
P with an additional
that
to provide
one third
while
of each year's
means of production,
newly produced
is untenable.
deficit
its own sector
running
a systematic
within
At the very best the burden of the shortage
of means of production
by
both
the allocawould be distributed
primarily
sectors,
over
tion of credits
bank; but in reality
the peasant
through
the state
market for means of production
severly.
would suffer

25.

The question
have
"prices
of production"
of whether
would
or not we
in the Soviet
Industry
difficult
to resolve.
opsystem is quite
But
it
erated
to certain
according
enough.
well
criteria,
profit
would be hard to actually
that there
an average
existed
conclude
distribution
determined
rate of profit,
the
of
and that this
rate
is
in the state
This
social
where we
capital
precisely
sector.
see one of the fundamental
revoluways in which the proletarian
tion undermines
distribution
the law of value--the
of productive
forces
in the state
largely
be
according
out
carried
sector
will
to plan,
even if that plan is not a fully-conscious,
socialist
one,
but is shaped by the
to
production
according
state
need to modify

-336the dictates
of the external
market and the need to reconstruct
industry.
Yet
prices
state
will
We
not be the same as value.
frankly
quite
admit that
know how to
must
we do not at this
point
The deviation
this
from values
problem.
resolve
of prices
within
the state
sector
will
come from two poles simultaneously:
The
(khozrasand cost accounting
of each individual
profit
enterprise
depending
which
will
vary
chet),
on the state
the
of the industry,
its
of
existing
plant
conditions
and equipment,
ability
of individual
labor
discipline,
managers to enforce
etc.,
on the one hand;
deviation
from the increasing
arising
and the planned
that
control
the state
planning
organs are able to exercise
over production
and
The best we can do is make the provisional
allocation.
abstracfrom values
is already
tion that the deviation
of prices
reflected
in the reproduction
schemes, whose figures
reflect
non-equivalent
(an
Preobrazhensky
that
assumption
though
exchange
makes as well,
taking
up the question
of prices
without
of production
and the
from values
that
in the
tendencies
cause the deviation
of prices
What makes this
Soviet
is
economy).
assumption
unsatisfactory
that,
perhaps
giving
while
a fairly
accurate
picture
any
within
it says nothing
about how the year's
given year,
surplus
product
be accumulated
and divided
up between branches
will
of industry.
however,
In terms of tracing
labor,
out the distribtuion
of social
between departments,
the schemes
and the movement of real values
detail
If
the basic
tendencies
of the system.
certainly
all
will
from values
deviations
are planned,
all
of prices
we assume that
for
disposal
that
are
a
vehicle
and
prices
state
procurement
and
in each production
then the esthe social
year,
capital
arranging
does not change--we
the tendencies
sential
can define
problem
the economy and state
of proportionality
what conditions
within
forces
dictate
by way of transfers
and productive
of capital
It is only where the
from one branch or department
to another.
forces
distribution
relations
and price-value
of the productive
by the retention
of proorganization
of capitalist
are determined
in
from
is
it
that,
these
duction
that difficultires
and
arise,
the interests
of simplification,
we must abstract.
26.

(VKA 22, p. 46) is

This argument
The New Economics,
pp. 104-05.

27.

VKA 22,

28.

Ibid,

p.

pp.

47 (Spulber,
47-8.

Original

pp.

dealt

147-48).

emphasis.

with

in

greater

detail

in

-337CHAPTER
THE

CIRCULATION
COMPONENTS

INDIVIDUAL

up the

We now take

but

form

its
changes
the

within

the classical

for

and having

to

tenuated

the

or

We also

of

Trotsky's

state

sector
it

the

have a huge
enter

will

by drawing

of view

of

scope

mutual

to

the

eliminate
the

latter
this

we have
these

into

sphere

"exchanges"

of

contact

middle

examined

in

area
expanded
within

an almost

the

solely
"pure"
the

politic-

apparatus.
and private
Using

the

middle

sector,

an analogy

task

of

the
so do-

In

area.

private

state

re-

and influence

state

say that

at-

state

intervenes

the

this

on the

sale

own trading

exclusively

with

enterprises,

of

each other.

NEP, we might

from

quanti-

exchanges

it

where

influence

its

its

with

freed

distribution

that

in

market

sufficient

can modify

of

inbetween,

the

an increasingly

in

reflect

extent

exchange

in

The

Exchanges

increasingly

extreme,

state

and weight

of

widen

the

of

in

market

capitalism.

exist

other

the

the

writings,

value--through

definitely

to

area

description
is

the

A mixed

amply

and by other

the

which

economy,

argues

goods

to

way to

realm

a market

under

their

begins

very

only

grey

into

form and undermine

So far

this

market

increases

economies

ing,

the

production

At

still

are

of

way in

are reproduced.

regularities

produce

gives

a plan.

In

the

both

which

economy

private

is

goods--and

form,

to

situation.

character

with

market,

according

market

ally

the

and external

sources
within

these

it

SECTORS

and the

other

enterprises

to

BOTH

product

and

of

none

THE

Preobrazhensky

what

branches

other

realize

Here

market.

having

of
in

obey

IN

USSR is

the
as

and state

sense,

use

like

OF

circulation

sector's

from

sector

the complication
ties

each

radically

state

of

PRODUCT

NEP To Socialism,

From

New Economics,

REPRODUCTION

THE

Clearly,

sort.

a modified

of

of

economy

commodity-socialist

OF

question

components

the separate

AND

11

economy,

and,

will

trans-

from

the

as well.
reproduction
the

state

mostly

economy.

point

We have dealt

-338interaction

the

with

we assumed

Preobrazhensky,

because

two sectors
the

mainly

to

analysis

of

both

in

gross

proportions

of

state-produced
in

S and P.

would

affect

arose

reproduction
this

now moves past

examiniation

the

disproportions,

production,

Preobrazhensky

a more specific

between

exchange

means of
turn

Following

terms,

show how certain

to

wanted

and how this

in

terms

constant

of

S itself,

in general

S and P only

we only

famine

goods

from within

level

between

the

of

mutual

ex-

P and S.

change between

The fourth
condition
of equilibrium
of our economic system is proin the distribution
in particular,
portionality
of labor,
proporin exchange between the state
tionality
economy and the entire
priboth with respect
the country,
to the value
vate economy within
levels
to its
exchange
at given
of that
price
and with
respect
Here we assume equilibrium
composition.
of value
exmaterial
in a conditional
is,
in the
to be understood
that
change
sense,
or exchange
sense of an equilibrium
of non-equivalent
exchange,
l
the
as
mechanism
of socialist
accumulation.

Here we move from

we have already

seen

--and,

problem

in
both

P.
to

and to

be able

to use the

first
do,

they

since

expanded
all

the
only

and elemental

of the problem,

but

reproduction

sectors.

We must
what

to

argument

to

(see
mixed
deal

economy
with

level.
not
or

These

the

consider

or

But

153.

reveal

which

exchange

it

is

circulation
We might

show the

nec-

fixed

versus

of

even Preobrazhensky's

reproduction,
schemes

intricacies

2 to

Chapter

131,34),

on page

simple

it.

and exchange

production
pp.

above,

the

show-

which

purposes

from

construct
in

reproduction.

scheme,

about

the

with

complicates

expanded

practical

all

scheme we constructed
the

of

demonstrate

he wanted

deals

and how it

a second

for

say that

he wished

between

capital

scheme of

stract

the

relationship

circulating

introduced

end Preobrazhensky

implications

that

an analysis

USSR, exacerbates--the

process

essary

to

reproduction,

ed production
irrelevant

be immense)

composition

the

To this

to

(whose

analysis

value

of

physical-material
in

a straight

even
and at

all

the

these

will

a fairly

not
ab-

essentials

come when we move on to

between

all

departments

of

-339In order

to

between

lation

the

have
nomy, we

exchange

constructed

have
the
we
ones
of
III

Part

expanded

II
I
and
ments

for

departments

S, and for

in both

departments

for

surplus

in

(i. e.,

ized

the surplus
is

which

of

that

of

the

part

cates

for

the

to

of

S we use

part

the

is

P.

With

that

is

that

non-productive

fund
Ruswith

is

real-

of

product

at

to

for

the

the

pres-

to

indi-

(again,

in

production),

petty

Soviet

by the

part

consumed

(a)

P,

accumulates

term

or

the

the

to

For

S, and s/x(p)

within

the

consumption

both

the

which

importance
refers

sector

expropriated

in

(for

indicate

to

indirect

surplus

we can apply

depart-

confusion

portion

s/x(g)

petty-commodity

(g)

one

pages

consumption

avoid

(a)

realized

the

in

S and P respectively.

subscript

has only

which

to

eco-

on the

capital

subscripts

from)

essentials

down into

and the

that

the

between

broken

being

The notation

with
the

the

Soviet

capital,

and variable

designate

to

and which

sense

fund

(p)

fixed

capital

the

we constructed

we inserted

"state"--this

product

that

the

constant

those

of

constant

and purchased

of

surplus

part

the

analysis.

our

the conditional
and (ex)

to,

exchanged

the

the

and

accumulated,

ent stage
part

value)

product

For

or

in

inter-re-

the

of

combines

with

and is

sectors,

P, we have used

of

sold

along

scheme which

each.

gosudarstevenniy,

sian,
"s"

of

scheme which

reproduction

The scheme has two

305-306.

picture

and reproduction

mentioned,

Preobrazhensky's

hand, with

possible

circuit
another

just

show the

to

fullest

the

present

either

state,
fund

of

socialist

accumulation.
[cg

+ cp]

+ [vg

+ Vp]

+ [s(a)

+ s/xg

+ s/xp]

[c9

+ CpI

+ [vg

+ vp]

+ [s(a)

+ s/xg

+ s/xp]

[cg

+ Cp] + [consg

PII.

[cg

+ [consg

If

we were

SI,
SII.
PI.

reproduction,
matters

+ Cp]

actually

the

somewhat,

+ consp]

+ [s(a)

+ s(ex)]

+ consp]

+ [s(a)

+ s(ex)]

a numerical

performing

existence
We would

of

the

have

to

category
include

Ps(ex)
that

of

analysis
would
part

of

expanded

complicate
it

which

went

-340fund
the
to

of

socialist

similarly,
the fund

in

if

difficulty
the

the

state

absorbs

and disposal

s/x of the
for

those

sector.

portions

of

Unfortunately

our

chapter,

Before

from this
tion

This

would

not,

peasant

we can

discuss
issue

we should
the

other

product

departments.

construction
an abstract

which,

are

the 1920's
lationships

could

issuing

attitude

of

towards

of

no matter
of

vary

it

While

a good
with

different
hoarding

deal

in

changes

types
or

of

of

the

marketing

a greater

of
with
our

and relations

Soviet

propor-

of

economy of

procurement

credit,
or

own

remains

The exchange

state's

agricultural

clear

to

conditions

flexibility.

ex-

reproduc-

still

processes

even the

reality

is

exchange

complexity,

the

proportions

specific

may seem that

in

rigid,

its

later

the

of
It

must

the

of

problem.

become prisoners

social

concrete

the

exhaust

which

without

Ps(ex)

and expanded

the

however,

how great

of

reminder.

simple

account

Although

characteristics

due to

not,

possess

to

or

directly.

complications.
reproduction

pros(ex)

us to

basics

the

vari-

s(a)

any length

establish

each department

of

extremely

would

at

a cautionary

defined

representation

tionality

question

the

We should

between human beings.

alienated

general

conditions

are much more narrowly

the

are

introduce

the

either

that

first

about

planned

allow

by no means be able

we go on to

of

this

of

eliminate

in

appear

this
as

P via

however,

product

with

we could

such

from

policy

the

of

around

payments,

its

support

fund

get

alienated

extent
already

observations

scheme that

each part

its

To this

we must

we will

change circuit,

mainly

would

before

few
a
make

in this

exchange,

to

goes

consumption

direct

it

analysis;

process

circulation

product

deal

we cannot

overstepping

we will

the

which

We can partially

the

SI and SII;

new c and v of

the

from

much of

since

state

to

aside

that,

prices.

from our calculation,

the

remainder,

sector,

non-equivalent

of

curement

add the

consumption,

we remember

state

forms
ous

to

non-productive

of

two departments

taxes,

have

we would

in

accumulation

the
lesser

re-

policy,

peasantry's
share

of

its

-341the

harvest,

opening
range

any of a whole
transition

flexibility

this

to

thoughts

and actions

ically

and the

Therefore

way people

which help

and as such

ideas
are

en moment.
limits

will

to

of

any analysis

help

exist

direction.

Under

ied consciousness

it

in the most minute

contradictory
transition

degree.

of economics

form parts
contradictory
In the
of our

of

of

to

this

of

the

and at

the

level

the
to

in

the

discussion

scheme we will

of

of

Soviet

is

This

development
the

two are

reif-

except
the

relief

the

of

without

nature
true

class

of

which

society

and the

possible,

of

then

a purpose-

impossibility

control

Such

act.
that

into

any giv-

at

people

not

and the

proletariat.
the

are

them in

throws

conscious

production.

reproduction

anarchy

is

this

analysis

Union

nature.

relations

key difference

innate

Both

we keep

of

the

which

histor-

elements

social

and alter

Introduction,

our

totality

our

this

of

constraints

the

people,

Soviet

Western

As we argued

ness,

Here

the

leading

period

the intervention

upon

is

control.

relations

within

its

their

which

of

like

these

with

capitalism,
imposes

nature

the

something

bounds

that

else--providing

with

with

but

parts

form

them consciously

can confront

the

people

as much material

a specific

socialism,

under

are

bit

every

some of

us the

tell

influence,

us that

their

under

society

of

what

tells
way,

as anything

are

the

about
its

by nature,

place

connected

demonstrate

They

human beings
ful

themselves

inextricably

The purpose
schemes is

are

human action

determine

in mind that

that

and ideology

thought

Marxism

to

or

currency,

come more and more under

constrained

view

thing

a purposeful

attempt

the

of

increases

sector

class.

always

they

and which

state

and in

are

stability

variables

working

consciously

act

given

society

the

of

free
are

as the

and the

the

The significnat

variables.

that,

grows

control

conscious

of

is

period

new lands,

up of

level

the

at

conscious-

inseparable

was--and

and

remains-",

extreme.
of
stick

the

reproduction

fairly

closely

individual

of

the

to

Preobrazhensky's

elements
argu-

-342In a few

ment.
will

peating

In

theory.
own
our
of
this

for

of circulation
departments
ist

of
the

within
for

detail
in order

other

and in

system

do this

and to us this
article.

But,

obviously

hasty

in

the

constitutes
on the

Volume

in

nature

it
all

and the political

climate

of

from his

without

adequately

just

premises

as we saw in
his

properly

apply

famine.

So once

we think

is

construct

in

Two cases

again

exchange

these

add further

exchange
bined

of

constant

them in

the

of

ements of

means of

capital

Let

department

in

in

break

spend

such

new ground,

this

section

VKA articles

the

given
were written

infer

conclusions

analysis
some time,

them,

failed

he generally
of

the

to

fill

to

goods
in what
to

point

as a starting

of the problem

picture

the

of

how he reached

his

ex-

Preobrazhensky,

of

where

the

that

Marx did

he was to

between
consumption
of

especially
us now turn
the

of

SI and PI;

of

to

II,

the

is

in-

the
I for

and we will

reproduction

petty-commodity

ex-

and PII.

implications

their

internal

second

departments

departments

as regards

the

the

beyond

equilibrium
of

is

SII

between

fund

consumption
portion

The first

note.

conditions

I of

process

new economy,

production

combined

the

meant--particularly

the

In

possible.

reproduction

had to

a more coherent

exceptional

major

some detail,

goods famine.

of

Capital.

Preobrazhensky

an historically
are

of

VKA 17 to
to

completeness

out

what

elaborating

have

use

is

just

re-

views,

inter-relations

is

time--that

from

and to

of

chapter,

we will

we think

change of means of
ternal

preceding

findings

needed,

what

circulation

the

the

of

the

also

not

trace

importance

great

which

to

economy,

hand,

other

II

his

the

of
is

this

parts

This

Soviet

the

sake

attempted

as a whole,

for

the

way revealed

and we

summary of

however,

component

this

capitalism

for

only

cases,

the

each of

P,

pure
to

said

straightforward,

critical

VKA 22 Preobrazhensky

of

part

fairly

a brief,

Preobrazhensky

what

is

analysis

more than

nothing

offer

the

cases

sector.

of

the

the
Both

of

central
the

com-

go into
for

material

the
el-

-343The Reproduction
I of

department

of

reproduction
that

lished

the

peasant

its

constant

a crisis
of

the sphere

of

conditions

the

of

reproduction
in

material

We will

show that

and SI,

that

circuit

which

if

if

less
the

only

it

and if

sells,

the latter
ment II
fact

in

which

that

in

of circulation,
been produced,
famine
find

of

that

access

to

traced

is,

that

all

and that
we will

deficit

four

departments.

we assume that

the
apply

the

disproportionality

the

world

of

path

means of
our

the

PI must acIt

production.
from

less

more from

SI than
PI than

same departis

due to

the

specific

under

the

is

"ideal"

strictly

one

PI needs

have

actually

conditions

of

problem

We will

production.
system

complex

then

materially

the

PI

SI has actu-

circulation

to

means of
in

the

between

Specifically,

PI and SI

production

findings

proportions.

be the

must

between
to

demanded for

and if

purchases
it

that

first

realiza-

a very

purchases

then

conform

the

this

sectors.

means of

II

material

we will

exchange

through

simple

the

correct

PI needs,

of

if

goods

return,

that

must

industrially-produced

Preobrazhensky

in

the

the

all

departments

out

where

in

of

section

the

place

transaction

exchange

we have

conditions,

the

in

of

The fact

return.

needs of production
After

take

requires

its

the

of

within

study

can prevent

produced

same department

mediates

now all

circuit

estab-

strictly

ensue

In this

met.

production

our

can

an imbalance

it

of

one of
this

buys

fact

than

means of

if

not

in

seen

the

at

clearly

economy

a crisis

departments

all

a money equivalent

does this

that

can only

SI

to

also

even when all

is

there

as soon as we look

any market

in

reproduciton

By now we have

exchange

in

are

involves

produced

quire

the

reproduction

PI sells

ally

are

product,

production

continued

in

economy

expanded

emerges

We have

a mixed

of

capital.

can result

breakdown
how
a
see
tion

sector

circulation.
in

reproduction

The difficulty

PIc:

of

can only

a goods
again

be relieved

by

market.
notes

that

a substantial

part

of

PIc

will

be repro-

'-344-

of PIc

part
(e. g.,

considerably
in means of
sector

from

in

duction.

The very

difficult

to

its

which goes to
carries
replace

its

variable

the

quire

means of

non-productive

the

wrong
is

How then
al means of

production

would be for

PI to

also

If

in means of
purchase
This

natural

form.

it

and other
more
it

means of

from

other

for

from

SI.

gainst

purchases
the

difficulty

that

surplus

in

have

would

said,

the

it
is

not

could
quite

As far

as our

Preobrazhensky

its

PI's

the

equal

analysis
worked

of

industri-

which

as means of

directly

and demands
the

ac-

solution

money with

obtain

to

product

departments,

of

money it
goes,

none of

SI

that

surplus

subsequently

complex

departments

product

PI cannot

products
it

can

appara-

possible

other

a hoard

SI's

and get

only

than

it

more,

consumption

since

PIc

be

can obtain

exchange

words,

SIs/x,

of

of

pro-

will

administrative

other

Clearly

and PH

production

as we have

means of

agricultural

SII

to

money PI receives
its

its

of

or

it

other

the

it

that

by exchanging

surplus

needs?

dispose

sold

In

SIv

its

realize

consumption,

the

circuit,

it

for

sustain

needs

either

use raw materials

duction,

it

against

PI to

is,

workers.

production

production

that

less

means of

part

All

capital.

and to

capital

means of

in

exists

constant

SI buys

petty-commodity

What is

that

SIc,

against

PII,

the

production

them.

sector

SI requires

dictates

produces

state

a problem:

than

means of

another

fertilizers,

way around.

imbalance

which

with

the

artificial

origin,

PI needs

SI,

I of

we have

animal

same token

industrially-produced

this

of

its

P is

with

other

and other

If

replace

and other

the

own products

out

tus

agricultural

from

only

exchange

only

of

nature

department

And here

feed,

cattle,

By the

etc.

machines,

than

overcome.

them directly

from

PI

machines

seeds,

wool,

etc. ).

production

needs

of

agricultural

transport,
less

e. g.,

be obtained

and coal,

metal

itself,

production

can only

and water

rail

for

sheep

products,

department

the

duced within

pro-

purchased
to

which
from
that

SI.

the

requires

we come up athis

out,

but

-345-

merely

is a crucial

this

at

arrived

aspect

conclusion,
the

of

seemingly

goods

famine

out

thin

of

Yet

air.

be examined

and must

in

this

more

detail.
In order

ine

is

other

but

that

PI

between

PI

what

show how the

out

is

that

disproportion

this

the

a physical

case

PI.
PII.

upon

partments
famine
tion

this

a market

means

our

means

of

the

goods

PI

imbalance

this

way we can

of

Then,

after

showing

when

production

of

circulation,

place,

SI

of

how

then

we can

production

places

PI.

us fill

let

of

process

take

in

reproduction
easily,

In

asfam-

goods

specific

conditions,
cannot

of

the

other.

economy.

exchange

the

produced

the

of

have to

output

of

each

"ideal"

shortage

more

in

some figures--which

scheme on page 339.

reproduction

+ 2000p)v

+ [2000a

+ (1000g

+ 1500p)c

+ (12508 + 1250p)v

+ [1250a

+(

(1000g

+ 2000p)c

+ (1000g

+ 1000p)cons.

fund

+ surplus

product

(3000g

+ 1000p)c

+ (17508

+ 2000p)cons.

fund

+ surplus

product

+ 500p)c

(25008

of

the

the

figures

Our first

system
at

the

for

down into

scheme without

The means of
SI also

the

c and v.
its

changing
scheme

equals

(p.

the

Thus

6500.

would

part

of

in

other

there

is

we do not

de-

no goods
accumulahave

each department's

unnecessarily

500p)Is

one form

three

assume that

so that

year,

accumulated
This

production

+ 1000p)]s

750g +

exchange
the

We further

as a whole.
end of

SI must

which

production

6500.
from

require

taking

+ (2000g

means of

equals

place

product

out

hypothetical--for

takes

break

arise

expanded

(50008

The quantity
or another

the

actually

because

from

but

physical

has

buy

under

sides,

where

limit

are completely

SII.

is

operates

To illustrate

Si.

can

that

remarks,

them

to

we first

exchange

society's
SI

that

need

this

on both

adequate

analyze

SI

of

obtain

famine

goods

fact

the

of

terms

cannot

of

introductory

words,

and

circuit

our

in

in

production,
needs,

in

a problem

not

this

analyze

we mentioned

as

surre,

to

complicate

to
surplus
our

essence.
339,

above)

showed

that

SIc(p)

must equal

-346In

PIC(g).

our

present

in means of

production

in
the
step

exchange
from

production

PI for

its

a hoard

accumulated

money to

this

it

that

short

still

In

production.

How is
cannot

it

exist

in

SI if

exchange

the

wrong

SI must

first

through

the

Second,

it

quantity
however,

means of

must

the medium of

terms.
and the

take

its

has all

money it

in

of

on the

place

As things

variable
the
would

capital,

means of
have

stand

SIv

advanced

to

of

out

raw ma-

what

means of

origin.

It

does this

This

PIT has returned

the

same

exchange,
transacted

therefore

workers

SII

money,

for

PII

physical
its

with

resources.

of

SI has obtained
in

from

needs

without

with

they

it

production

directly,

PI

above,

because

capital.

and is

consumption

P is

means of

500 worth

acquire

peasant

both

all

while

industrial

or SIs/x

production

now,

we

production.

this

market,

So far

again,

and allocation

means of

consumption

money.

renew
It

2000

does

use

exchanged

As we pointed

2000 in
It

SI.

then

SI has obtained

of

variable

accounting

state

exchanges
of

needs to

of

its

exchanges

consumption.

system

stocks

PI could

realize

from

and other

against

as follows:

it

PI will

production

be realized?

surplus

all

the

agricultural

place

First,

2000 means of

of

more difficult,

now stand,

tractors,

presume

something

can be mutually

what

Gos-

of

money would

case,

SI

assume that

resources

the

production

begin

to

physical

of

being

of

form.

took

in two ways.

to

its

any of

years,

The first

S.

to

has the

advance

has unsold

goods

shortage

exchange

of

As things

machines,

addition,

this

to

means of

capital

and intermediate

terials

for

constant

500 in

of

PI

accounts"

SI and Pl.

in

needs

the

it

500

only

500 in means of

more reasonable

This

500 in

purchase

between

directly

a period

unrealistic.

"cleared

have merely

for

whereas

1000 from

SI purchases

because

exchange,

over

not

though clearly

is

It

SI requires

true.

not

P needs

be if

will

money.

disposal,

bank at

P, while

circuit

money for

the

advances

from

is

this

example

all

via

that

it

and monetary
consume,

must
to

it

as soon

-347-

as PII

concerned,
2000c(g).

in

2000

purchased
it

has renewed

It

must

2000c(g)
ed

part

to

1000c(g)

balances

outstanding

non-productive

consumption

of

enough.

It

sells

consumption

worth

money it

receives

ized

the

remainder

buys

1000 in means of

its

of

demand for

to 1000c(g)],

and SI has obtained

ty production

its

and SII
tion

means of

produced
for
only

by state

produced

500 for

further

SII

us that

will

exchange
sell

exchange
does

actually

but to do it SII
for

would

with

1000 in

left

all

2500 of

its
left

chervontsi

But where

means of

change of
chases

a credit

from

It
for

PI to

1000 for

consumption.
SII

(1000).

into

the

at

SII
has

exchange
find

the

production

did

to
the

SII

is

not

still

aside

aside
SII

out.

for

SI,

to

sell

work

500 in

500 chervon-

worth

500 in

has

means of

has now realized

SII

consumption

means of

500

plus

PI.

means of

PI has received

bank

state-

leaving

had set

exchange

need.

all

as well

to

production

a fairly

and PI then

money,

to

will

in

SI

but

1000 in

is

this

state

not

with

products

set

SIv,

SI

scheme tells

our

it

pet-

consump-

500 in

only

against
at

of

means of

consumption

now,

stand

500 in money,

IIc(g).
over

dip

means of

[equal

between

2500 SIIc

the

One look

consumption

which

1000 means of

these

means of
form

plus

unsold

is

to

Exchange

needs

of

the

SI

of

consumption

1000 in

SII

easy

and with

production

exchanged

SI.

the

As things

SI has now advanced

production

already

with

have

have

PI.

means of production
tsi.

2000 have

SI,

against

PIT has real-

required.

but

is

this

production.

Furthermore,

production.
SI,

with

exchange

industry,

light

1000 to

SI needs

however.

a problem,

has realiz-

exchanged

PIT

1000 means of

workers

is

to

equal
PII

are

For

means of

the

non-productive

presents

SI.

as SII

l000c(p).

plus

of

it

capital

and 1S00c(p).

the fund

means of

As far

SI.

constant

500c(g)

renew

these

of

its

of

realize
has

from

production

a part

still

and still

The major

means of

uses
that
off.

simple
the

The ex-

sell?

SII

matter.

latter

1000 in

to

buy

in

physical

it

needs

It

has disposed

pur-

of

the

-348equivalent

physical

entire

in money left

to

500 in peasant
from
these
likely,

exchange;

- produced
it

what

for

is

no reason

that

of consumption
how eventually

be able

to

So,

let

constant

SII,

exchange with
it

sumption
tion

needs

from
in

1000,

worth

the

its

its

fund

of

non-productive

of

500 in

500 in means of

production

SII

has realized

money reserve

all

of

it

did

PH

is

the

disposed of all
Things

them to

SII.

from PI.
500 in

means of

that,

work

exchange
SH

if

with

means of
PII's

of

con-

produc-

means of

left

in

but

on its

pro-

and has

hands.
It

has a

production

from

1000 IIc(p).

which

has

the

back,

get

must

fund.

It

capital.

500 in means of

it

However,
it

still

not

could

PI.

exchange

from SI

PI

its

both from SI and P1, and it

has

the
which

will
then

have

500 in

all

that

right.

all

It

means of consumption.

takes

SI--but

has realized

is

that

have

production

its

buy.

then

means of

some-

means of

needs 500 in means of production

exchangeable
out

it

plus

production

it

the

acquire

and sitting

means of production,

of its

PI will

but

which

consumption

department

only

will
for

set aside

entire

have money to

not

demand for

entire

its

peasant

with SI; not only

a need

means

peasant-produced

consumption

IIc(g)
for

PI the

completing

and variable

unsold

its

of

500 plus

PI has realized
has 500 in

left

not

now?

constant

money,

is

PI would

in

be selling

up till

stand

take

This

off

same quantity

of

all

PI holds

this

all

advance

the

does

for

exchange

cess has had to

which

o It

PII.

PI could

that

needs

away to

right

SI has realized
acquired

PII

needs

issue

then

anticipation
that

still

PII.

with

would

us assume that

How do things

consumption.

PII

all

and proceeds

needs

exchange

in

on credit,
supply

Perhaps

has 500

still

it

more serious,

production.

earmarked

but

capital,

is

what

means of

it

capital.

and,

constant

has

there

since

its

of

the

means of

production

it

not

could

means of

money which
SI

still

it

can use

it
to

hands.

has
sells

sell--and

production

has on its

it

needs

purchase
PI will

-349. full

constant

capital

SI
advanced,
which

when it

purchased

its

then have

it,

to

returned

The only
because:

sells

a)SII

is

are equal.

It

equal SIIc

plus

must equal

PIc(g)

the surplus
deficit

of

of

means of

of these
If

what

PI

+ 1000p),

Now, however,

it

is

with

PI, and then sell

only

2500 in means of

left

over.

tion
all

the

part

of

sells

SII,

and if

in

this

two amounts
fund

SIc(p)
then

not,

SI

to

turn

Our present

exchange

these

and purchase
the means of

have only

500 of

in money.

Only

What about

If

we can
equals
PI's

equals

scheme satisfies

So do all

IIc,

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its

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exchange

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than

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PI requires

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of

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PH

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circulation

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+ PIT for

SII

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=

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2).

figures

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to

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to

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the

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sumption

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PH = (25008

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industrial

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-350by exchanging

of production
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only

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change
fund(g)

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tion,

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than

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partment

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in

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of

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if

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buy.

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Circulation
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greater

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to

sell

PI does

available.

for

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advances

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Now we have
but two.

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before.

and PI has

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purchases

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the

plus

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consumption

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requires

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back

intricate
discrete
each

from
path

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department

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is

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it.
here.

purchase

As Marx
and sale

-351-

an additional

creates

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of

true

if

into

then PI could
SI;

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SI

conversely

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would

have

our second

case,

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break down somewhere

the petty-commodity

sector

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and making

up certain

peasant
duction

terms, " so to
the natural
the proper

speak,

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ment had them,

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of

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of

forget

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system

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departments

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of

by hoarding

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In

process

circuit

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serve

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line,

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needed

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least

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This

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of

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this

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money at

proportions.

lem by exporting

ficulties

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consumption).

components

In such

type

commodities

interrupt
its

products

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agricultural

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a failure

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consumption

by cutting

conditions

We have

else.

describ-

necessary

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realize

exchanges,

we are

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had unsaleable

PI

although

equally

all

into

in

is

This

commodity-socialism

where

or

as "over-production"

appeared

tion

of

had been

commodities

disruption.

potential

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of

system

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were satisfied,
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market

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Even in

ing.

point

way out
in
PI's

a shortage
surplus

of

the
of

means

-352-

and exported

of production

pl,

issued
or

have
would

PI

arise

centralized
SI's
making

surplus

production
from SI,

to

SI.
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capital,

We can

illustrate

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PI could

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directly

out

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place

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realize

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arises
PI

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Conversely,

stocks

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famine

exchanges

essential

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"over-production"

of

goods

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economy.

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a capitalist

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latter

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at

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for

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capitalism.

ically

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out

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alities

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production;

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ditional

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tions

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exchange

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production
tion.

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In

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that

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fund

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internal

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of

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necessary
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unsold

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+ 1000p).

except

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case

2,

Chapter

departments

means of

(3000g + 1500p).
sumption

were

(3000g

to

in

derived

respective

we kept

is

+ 1500p)

reproduction

the

very

case

(25008

we first

by adding

capital

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All

briefly.

quantity
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means of

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conof

means of
produc-

production

in

-353-

P without

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sumption

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of consumption
it

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has

PI

to sell.

SII,

accumulation

In

this

PI's

of

output

partments
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the

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duction

PI

goods
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the

is

It

persist
demanded

level

exchange here.
porducts

quantity

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atively

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cheaply,
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gets
diction

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abandon

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production

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deepen
It

aggravates

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to

to

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exacerbate
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gives

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goods

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famine

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supply

of
If
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as we noted

be-

all

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then

of

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the

its

output

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in

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reproduction
discontent

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prices

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comes from
high

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purchase

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development.

the

entire

It

It

mechanism
to

the

the

peasant

amont

those

of

subordinate
exchange

non-equivalent
of

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a contra-

certainly

effort

of

com-

prices.

its

position
in

non-equivalent

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latter's

same token,

of

PI to

This

period

and weaken

and political

for

relatively

at

exchange.

By the

expanded

effect

consumption

exchange,
sector,

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three

of

raise

crisis,

from

products
in

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accumulation.

the

can

means that

non-productive

it

of

we can,

PI

to

use

inadequate,

easier

production

its

or

the

note

Non-equivalence

Soviet

social

SI

production

SII's

acquiring

are

500

of

departments.

other

means of

P than

the

state:

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and sells

in

accumulation

until
by

it

own commodities.

ponent

ian

tends

lowered,

were

greater
its

It

surpluses

of

realize

production,

demands

then

a means

these

back

con-

1000 means

of

cannot

cut

the

surpluses,
as

it

demands

the

means

production.

exceeds

interesting

extremely

to

of

not

purchase

the

which

have

with

production

If

money

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pace

have

not

means

market

have.

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PI

exportable

world

must

famine

of

has

of

case

keep

not

means

does

industrial

of
will

raw materials

SI

could

PI's

same money hoard

the

with

1000g of

it

capital

money and would

it

time

buy the

merely

constant

leaving

this

to an insufficiency

its

1500 in

an

anything.

chase

have

Only

would

500 of

the

plus

Then PI would

in SI.

It

much trouble.

proletarsector

class

and
forces

-354interestes
whose

be better

would

by the

served

overthrow

Soviet

the

of

3
regime.

The Reproduction

of

the

The reproduction

of

both

tions,

we will

and

matter.
means of

production--and

If

(see
at

sumption

fund

the

PI

more

our

own

of means of

its
of

discussion
it
it

need not

dwell

on this

if

the

or

into

three

part

productive

at

the

form

of

of

all

30S and
of

the

306).

the

conthat

maintaining

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in

it

easier

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acquisition
from

obvious

allow

PI to

more to PIT

thus

enabling

sell

PI to

to

except
are

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of

SI.

We
it

add that
E. g.,

satisfied:

foreign

through

the

acquire

from

production

process

roundabout

on

be sufficiently

prerequisites
production,

say

the

encounters

length,

great

that
trade

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circulation

is

char-

economy.
is

PI

of

Non-productive
the
for
within

consumption

as means of

while

means of

purchase

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product

expropriated

of accumulation

exists

via

parts:

goes to maintain

to

return,

to

is
This/simply

exchange,

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would

complica-

aspect

mention.

for

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in

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The surplus

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of

IIc

pages
one

PI:

of

physical

between
we see

produces

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against

consumption,

this

point

the

of

these

and Vneshtorg,
acterizes

needs

all

PI can obtain

that

purchased

hoard

only

339,

does

SI.

free

the

these

scheme

it

fairly

in

exists

on page

what

product

Preobrazhensky

exchange

personal

from

monetary

true

PI

Surplus

and
is

make up any deficits

to

than

of
must

scheme

production

our previous

what

Preobrazhensky

volume

it

to

reproduction

contracts

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which

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will

it

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categories

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consumption

sectors

we look

these
little

add

The

three

Consumption

state
the

a little

fund

of

production,

(taxes,

PI's

product

cannot

in

which
direct

divides
that

portion

etc. );

goes
form,

be personally

towards
since

the

fund

and the

accumulation;

be alienated
which

the

on trade,

expenditures

socialist

PI proper.
cannot

more complex.

consumption

apparatus,

It

nonit

consumed--the

-355being

one exception
industry
of the

which

product

sectors.

In

product

through

non-equivalent
in

to

exchange
is

interest

the

each of

these

exchange

to

correct

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in

expropriated

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end of

The Reproduction

its

ing livestock,
it
ties

was PH
might

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tion

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in

arise

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it

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ob-

It

fund

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of

must
PI,

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variegated

go

and

circuit

of

reproduction

in

of

the

PIs(ex),

most

process
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the

reproduction
separately

would

things

insulated
of

its
less

for

4
demand.

This

breedthat

claimed

i-

technologically

the

difficulties

by altering

its

consump-

own production

for

its

production
its

consumption

disproportional

Being

many of

natural

feed,

manure,

Preobrazhensky

within
of

means of

from whatever

constant

largely

consists

of

reproduction.

upon

it

Seeds,

as:

VKA 17,

the

reproduced

so much of

compensate

more or

Preobrazhensky

production

in

in marketing

situation

instance.

because

Earlier,

and relying

as the

the

question

question

being

of

agricultural

was the

encounter

fund

is

enumerates

which

for

other
product.

product,

to

peculiarity

This

the most backward,

it

the

peasant

(Preobrazhensky

surplus

way

indirectly

elements

up the

According

Plic:

of

of

a quite
these

take

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of

surplus

as means

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state

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of

product

The only

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enter

consumption
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surplus

various

most

and in

sector,

and consumption

all

We will

own department.

by-products

of

necessitate

obtain

would

means of

PI's

the

portion

chapter.

PIT has

of

part

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part

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of

capital

form.

natural

of

it

in

this

obtain

alternatively,

constant

PI to

where

departments.

other

turn

allow

of the

capital

part

accumulated

both

to augment

or

would

state

production

this

with

the

of

workers;
for

an equivalent

through

II

latter's

the

non-productive

state's

exchange,

department

IIc

against

the state

course,

military-related

Therefore

production.

be exchanged

of

for

raw materials

enter

must

terms,

real

of production

tain

immedately

can

surplus

contribute

peasant-produced

is

no less

true

in

the

-356may in

This

turn
of

of the products
directly

pose

indirectly,

or

those departments

that
PIIc.

which must renew

part

in

respectively,
the

of

depends
which
SII

tance

inating

means of

strict

consumption
duction,

part

PIIc

of

funds

SI

of

the

of

exchange
take

sharply

increased

that

the

if

produced

of

peasant

petty

fund,
origin.
PIc(g),

of

the

demands of

one hand,

and PI Is
impor-

we see the

other,

industrialize

progressively

by elim-

Only

production.

agriculture

on a collectivized,

free

from

itself

dependence

department

the

fund
PIc(g).
between
place
the

respective

means of

of

little

II

upon

the

of

discussion

the

There

we saw that
I of

an intricate
of

possibility
demands

production

of

were

shape

the

P11:

the

against

of means of

pro-

albeit

with,

of

reproduction

The reproduction

same theoretical

departments
through

of

Fund of

Consumption

it

exchange

the

It

analytically.

have been dealt

process

our

presents

have

which

this
of

trouble

and PIT must

and PI,

course

of

consumption

only

be SI and PI,

on the

common to

presents

consumption

The Reproduction

mutual

of

sector

means of

in

reproduction

state

would

through

sector.

The mechanics

indirectly,

basis

the

product

between

to

either
is,

reproduction

on the

state

and irregularities

The other
of

SI,

and placing

the

could

petty-commodity

consists

from
Soviet

the

the

PI,

PIIc,

upon

their

consumption

from

production

realization

and consumption

proportionality

production
of

of

capital

for

the

exchange--that

affected

we derived

production,

the fluctuations

could

for

means of

modern footing

PII's

exchange

failure

petty

part

variable

and undermine

agriculture

realize

their

on rather

the

of

mutual

immediately

Most

in

depend

which

their

of

means of

of

difficulties

sectors

first

must

relationship

and PIT for

deficit

other

to mediate

exchange against

In view

the

all

definite

very

PIc.

of

as the

problems

introduced
we
as
as soon
S and P, reproduction

both

series
in

crisis

SIT

and PH

not

of

the

the
for

of

exchanges,

economy,
state-

appropriate

This

so much so,

and peasantproportions,

-357exchange could

not

money and a stock

we have

that

unsold
the

have an interruption
one of

A glance

fund

of the

consumption

self.

Nevertheless,

In the

scheme we produced

PIT

exactly

what

that

instead

of

between SII

SI.
SII.
PI.
PII.

latter

cess of
SII

will

purchase

crucial

we

is

limited

in

SII--1750

between
look

but

that,

only

surplus

internal

with

from

Suppose

cases.

scheme showed one

(we eliminate

for

simplicity):

+ (1000g

+ 1000p)s/x

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-362-

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-364-

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Thus,

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As with
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sector

give

would

the

lat-

soon under-

the

first

place,

-365it

ialist

accumulation,

rate

the

of

of

expand,
Now, if

P's

then

the

plus

to

petty

goods famine.
entarily

It

the

stifle

This

result

with

the

economy's
productive

is
need

to

stock

The Reproduction

would

blunt

accumulation

of

capital,
in

the

Part

for

the

Ps(ex),

our

of

the

in

the

Surplus

of

of
339,

the

its

of

its

own

non-produc-

II,

in

the

and to

towards

the

while

short

of

of

this
run.

Along
the

restore

non-

reducing
is

mom-

long

the

found.

we have

necessary

term.

the

Peasant

Accumulation
process

circulation

we stated

surplus

to-

part

But all

I.

Socialist
the

it

of

department

Product

Primitive

discussion

part

boost

society9--which
crisis

Fund of

not

share

exchange

the

same.

sur-

put

lose

as a whole

tendency

P would

temporarily--ease

others

with

scheme on page
the

the

vital

increased

will

own

industry,

be unmarketable.

department

post-capitalist

heightens

reproduction

will

sector

state

its

state

their

in

econo-

in

and will

in

non-equivalent

When we began

category

the

of

state

much the

of

would--again

consistent

fixed

only

of

fund

exchange

maintain

Expropriated

drew our
of the

sector

consumption

and progressive-..

[Ps(ex)];

state

perfectly

products

would

stimu-

equally

very

The state

the

of

remain

increase

only

production

production,

output

an actual

growth

another,

and agriculture

increased

the

raising

of

could

by increasing

devoting

stop

soc-

be doomed

by the

be that

for

primitive

would
it

gained

S would

soon

fund,

in

consumption

state

consumption.

natura

same token,

economy

accumulation

would

and expansion

its

since

By the

Sector

will

of

Second,

be exchanged

producers

policy

by reducing

in

that

while

accumulation

production,

lose

would

cannot

own in

state

of

The result

accumulation

socialist

expense

What the

it

enough,

wards their

would

the

countryside.

output

the

which

the

of

disintegration.

accumulation.

well

tive

P at

accumulation

of

source

without

in

expansion

my off

abandonment

and eventual

to stagnation
late

de facto

meand the

would

that

product

the
of

and

inclusion

the

petty-

-366sector

commodity

deal

add a great

of

We did

duct

into

taken

by our

we must

disposal
and
ment
of

use this

abstraction,

of

prices
ready

is

not

reflected

in

entirely

are

applicable

problems

involved

of

in

use

to

the

state's

procure-

any concrete

numerical

We must
it

Soviet

this

to

mean hav-

would

what

extent

We have al-

system.

regard,

non-

continue

and to

or not,

the

in

that

go beyond

whether

assump-

presumption

valid.
to

pro-

and was already

a simplifying

the

because

question

only

all,

we would

the

production
the

of

surplus

exchange,

is

a later

until

alienated

we

and will

not

repeat

10

them.

Secondly,

surplus

fact

to

this

in

order

the circulation
to drop

part

of

Ps(ex)

will

have

we look

at

will

be divided

original

the

expanded

up into
S.

tive

workers

S,

i. e.,

tion

in

the

surplus

form of means
of

directly.

demonstrate
done

this

will

product

production,

now in

a position
to

the

this

of

of

extent
portion

reproduction.
339
we see that
page
on
scheme
the

for

equations

basic

three

extent

alienated
and that

S.

to

we have

from

PI,

obtained

the
our

which
from

prin-

reproduction
the

maintain

into

can in

It

of

categories

go immediately

To this

tendencies

inclusion

the

effect

We ignored

least

at

abstraction,

some of

basic

the

we are

Some can go directly

each department.
the

to

the subject,

mentioning
alienated

reproduction

be added

of

of

what

upon

each department

between

Having

our

actually

is

more clearly

describing

of qualitatively

If

product

process.

this

of Ps(ex)

when first

as we stated

the expropriated

ciple

which

however,

develop

stated

First

it

of

the

of

This

can be perfectly

reproduction,

ing to fully

all

figures.

prices,

analysis

consideration

would

As such

analysis.

non-equivalent

now abandon.

exchange

equivalent

any
that

through

accumulation,

any numerical

from

by assuming

this

account

that

tion

to

abstract

P was obtained

of

the

complexity

had to momentarily
stage.

for

alienated

of
fund/socialist

fund
usual

non-producconsump-

of

distinction

has the
PII,

in

material

which

exists

-367in the

shape

of

in

natura

--either

to

of consumption
state

sector.

fund,

s/x;

for

form

by the

SI

SIT

they

they
can

alienated

for

for

consumption

Once again,

the

have them exported

and the

The part

that

Ps(ex)

of

uses

different

results

bring

productive

the

relieve

SIs/x.

This

of Ps(ex)

is

is

another

and between

then this
while

the

other

hand,

exchange

fund

thus

that

cept

at

means of
If

the
the

This
goods

expense

puts
famine

of

production,
the

accumulated

goods

stay

as a whole

famine

of

in

the

means of
the

aggravating

and vice
share

for

directboth

of

aspect

of

in

the

form

each
the

non-

short

run

portion

be divided

up between

fund

this

the

same.
it

rises,

will

famine

rise

will

On the
raise

produced

industrially-produced
same old

in

Ps(ex)

primarily

the
PII

means

contradiction--the
cannot
of

be solved

state-produced

versa.
of

SII,

goes to

SIIc

because

consumption

is

we

by increasing

commodities

goods

SI

The accumulated

of

relatively

us back
of

bulk

phys-

means of

product

will

have to

famine,

department

that

it

here.

the

proper

more interesting,

production,

will

To

physical

alienated

goods

SIIv

that

the

mollify

of consumption.
fact

in

the
SI will

of

extent

demand among workers

If

far

to

case
It

c and v.

exacerbate

the

our

exchange

imported.

any other

means of

story.

can only

to

of
in

true

clearly

Like

any increment

famine

goods

quite

SI and SII,

and will

fund,

the

the

usable

is

of

them.

with

consumption

portion

the

workers

goods

accumulated

the

of

PIT can function

be in

required

is

this

of

from

all

of means

goods--probably

non-productive
not

--can

production.

in

exist

needed

received

they

should

the possible

help

and the

The goods

to

as means of
do not

products

output

workers

an addition

directly

serve

PIs(ex)

as taxes)

the

expand

non-productive

represent

can be exported,

ly as means of

will

will

to

from

received

(e. g.,

equivalent

be consumed

production--imported.

and SII.

a monetary

production

the

they

The goods

as means of

For

that

the extent

consumption.

or via

directly

function

ical

means of

devoted

to

SI,

ex-

-368just

then we have

of peasant
production

ues will

go to

increase

that

way towards

alleviating

ive quantity

We should
the previous

tion

Ps(ex).

of

surplus

product

famine

of means of

exchange

latter

fund,

automatic

rise

iginating

in

tween these
SIc produced

is
if

to

that
in

only

that

part

the

that

PI--which

went

absolute

department's
will

help

two departments:
within

so that

it

fund
short

if

that
will

have

to

at

that
one

and a mass-

this

replacement

we detailed

of

the

of

to

SIv.

increase

SIc

demand for
the

relieve
of

will
purchase

the

were

is

bring

means of
imbalance

the

additional

consist

of

goods

accumulatinto

enter

This
will

peasant

consumption

overcome

would

of

reproduc-

alienated

same amount

of

the

non-productive

fraction

growth

in

in

fund

the

of

exactly

run

a small

The bulk

department

is,

process,

reproduction

this

to

that

go a long

theory,

renewed

in

quantity

the

than

production

this

almost

a given

more in

instance

the

the

the

fact

the

contradiction

mirrored

increase

in

val-

term.

short

fundamental

the

is

least

be invested

to

the

in

when we outlined

do far

will

when we consider

capital,

that

goes

this

In the

in

Obviously

in SI,

ed.

have

accumulated

be completely

be a discontinuity

consumption,

non-productive

at

pro-

advanced

we saw earlier--that

had to

capital

would

section,

can,

the

of

the

exporting

important

more

contradiction

any output
note

part

famine

goods

technologically

since

SIc

augment

the

ease

by first

only

Perhaps

the

values

yielding

without

to

would

of

West),

the

constant

there

(again,

SIv.

goes

SI's

that

SI

will

and importing

from

the portion

time,

from

It

result.

agriculture

means of

so much of

opposite

production

of means of
ducts

the

SI's

true

even

with

it

or-

production
of

exchange
increment

industrial

an

bein

fixed
etc.,

more raw materials,

from PI,

By the same token,

used mainly
raise

if

to expand that

the wages of its

the portion
department's

workers

of Ps(ex)

consumption

increase
to
or

goes into

that

fund,

the fund

e. g.,

SII

is

to

on non-productive

-369this

consumption,
for
mand

by purely

will,

new state-produced

tion

in

this

will,

constant

has priority

SII

over

as already

negative

noted,

only

in

its

the

worsen

down SII's

Conversely,

capital.
increase

any

hold

means,

fund

if

of

shortage

of

de-

accumula-

consumption
state

means of

production.
It

is

when we look
in

reproduction

for

the

P that
If

most sharply.
fund

of

this

part

socialist
in

that

of

for

S,

a dangerous

of

as regards

for

state-produced

that
the

confronts
expense

schemes

of

completely

tion.

The

state

alienate

values

category

Ps(ex)

of the
lation,

This,
size

the

Soviet

on the

which

of
of

capital
this

is

described

as

the

from
can

the
serve

Ps(ex)

and its

one hand,

of

production.

law

division

and between

what

at

reproduction
had
accumulado

it

order

to

sector.

In

our

schemes

it

need

not

necessarily

and

but

present
between
the

dilemma

except

socialist

in

in

general

the

consumption
of

so

is

discussion,

production

coun-

demand

increase

no

mean

situa-

Preobrazhensky

primitive

of

function,

the

of

aspect

the

expand

cannot

the

P's

of the

symptom

economic

an expansion

worsen

with

go up

the

terms,

that

only

aim of
we found

within

would

form

accumulate,

in
shown

fact

this

petty-commodity
this

in

the

in

go

outstrip

political

forces

one

such

balance
in

would

a basic

P does not

of

Industry

algebraic

must

SI

it

Yet

social

means

only

summarizes

sector

agriculture.

would

economy:
As

of

system

alienated

of

is

This

would,

expression

famine

P.

the

of

deal

a great

growth

Soviet

were not

of

upset

in

as we have
of

this

balance

the

agriculture.

merely

more

do so,

sectors

constant
But

if

growth

goods

it.

growth

and expanded

the

of

product

then

greatly

economic

the

match

the

true

a simultaneous

tion

to

two
in

its

surplus

departments

would

the

finds

P without

supply

it

disruption

This

try.

only

then

between

relations

both

promote

is

this

P's

of

Ps(ex)

contradictions

accumulation

system--to

that

earlier

between

relation

we see the

to expand production
the Soviet

the

at

must
the

a function

and accumu-

means of

con-

-370. and means of

sumption

demands an emphasis

upon
for

Here,

production.

as a means of

serve

means of
large

is

this

it,

of

part

precisely
for

vehicle
Yet

were

exported,

what

we would

in

ing short-term

consumption
a "solution"

present
needs of

and social

the

have.
from

of

industrial

peasantry

the

P to

S.

to

an accent

it

condemn

the

serves

must

or

as a

be conscious-

means forego-

this

Ps(ex)

consumption

dictated

of

imported,

upon using

means of

famine

permanent

below,

can

PIIs(ex),

production
cases

means of

product

If

accumulation

of

goods

and would

development

all

Conversely,

and production
to

In

of

production

production.

show in more detail

remedies.

from

and means of

solution

surplus

capital

means of

values
favor

As we will

ly adopted.

of

production

expropriated

social

that

A long-term

other.

and the

the

transferring

transferring

a policy

increase

accumulation

instance,

to

consumption

on the

production

by the

would

re-

immediate

overall

country's

to

economic

"

distortion.

Conclusion
Preobrazhensky
culation

and reproduction
in

sector
If

summarized

the

following

of

the
the

results

component

of

his

parts

analysis
of

the

of
product

the
of

cireach

relationships:

in the Soviet
plus IIc of the
sector
economy IIc of the state
department
II
the
private
which
sector,
minus
means of production
department,
its
own
of the combined private
within
sector
obtains
department
I
is equal to v plus the non-productive
of
consumption
fund and the non-producof the state
sector,
plus the consumption
tive
fund of department
I of the combined private
consumption
sector,
then:
1)When department
I of the combined private
sector
I
department
deficit
of the
suffers
of
a
of means of production
basthe
be
on
state
the disproportion
only
sector,
eliminated
may
is of ties
part
of the consumption
with the world economy; 2)that
fund of department
II of the combined private
sector
which conindustry
light
from state
must equal
sists
of means of consumption
II of the state
the part of the wages fund of department
sector
department
from
which consists
of means of consumption
purchased
II of the private
is,
to
that
the
a
part
wages--that
sector
with
proof peasant
very great
extent
consists
of means of consumption
departduction;
fund
3)if
internal
the
of
consumption
exchange of
ment II of the combined private
a corresponding
against
sector
demand
IIv
portion
on
of
an excess
of
reveals
of the state
sector
be
the part
disproportion
solved
the
may
of the private
sector,

-371with the aid of ties

either
with the foreign
market,
or by redisincome in such a way as to
the national
tributing
provide
resourcdevelopment
es for additional
II of the state
of department
sechowever,
tor--a
solution
which,
would require
an even more rapid
development
4)if
of heavy industry;
the disproportion
in the ecoin any of these ways, a goods famine
nomy cannot be solved
arises
the private
throughout
both means of production
economy, affecting
l
in the state
and means of consumption
produced
economy.
We should

first

is

conclusion

in

[(v+s/x)

Marx's

(i. e.,

PIc(g)

the

I of

Preobrazhensky
the sphere

from

more

the

amount

PI

it

production

production

SI,

it

trade

if

adequate

exportable

In

words,

sector.

the

within

other
realm

between

exchange

from PI so that
though
for
take

of

the

SI may have

the

society

considerably
through
His

the

produced

easier
planned

second

deficit
for

the

right

all

of

will
the

use of

conclusion

not

hoard

that,

of

necessary

II

of
foreign

the peasant
solely
mediates

which

means of

of

famine

goods

originate

money,

means of

production
then,

will

case,

however,

and eliminate

even

production

exchanges

this

intervene

not

the

credit.

agricultural
is

in

exist

differ-

this

through

enough

In

than

one depart-

an insufficiency

the

world

within

from

quantity
the

the

If

need not

persist.

state

and if

in

the

terms

of

our

def-

the

to

SI.

purchase

to

then

if

than

means of

solely

only

department

the

less

fewer

arises

already

has a sufficient

latter

as a whole,

and PI's

place

If

is

-that

even more precise

be liquidated

famine

goods

PI and SI does

SIc(p)

return,

stems

surpluses

production.

in

with

can only

the

consumption

way around),

is

deficit

means of
then

of

can be overcome

of state-produced
within

equilibrium-

economy has access

PI buys

than

PI's

of

other

of

requires

disproportion

the

then

circulation,

of

the

relationship

If

specified.

ment purchases
ence equals

the

sector

Soviet

the

We now know that

market.

and if

state

than

origin

fund

aggregate

the

Preobrazhensky's

condition

satisfied,

be made up if

can only

its

schemes]--is

peasant

more detail.

general

equals

department

of

production
icit

IIc

in

passage

if

that

aggregate

society's

this

examine

reproduction

it
crisis

is

-372scheme on page

357,

from SII,

equal

and that

exist,
PII

the

from PIT than

the
from

of production

of means of

departments
lion,

the

its

access
Related

the
to

Foreign

contingent.
in

the

cess means of
inantly-.

The foreign

will

have to

tion

for

We should

non-equivalent

also

from

of

if

with

as the

de-

the

and buys more

differentials

confront

of
I,

then

unsold

means
def-

a corresponding

department

other

circulation.

one department

I,

the

consumption

one of
it,

to

various

money will

obtains

circulation

means of

process

sells

within
of

of

only

I in
is

problem

a judicious

via

is

not

the

one of

one of

circula-

and through

policy

credit

third

a viable

it

exports

will

currency

I of

the

both
the

of accumulation

is

because

fully--or

import

role

contradictory

from

consumption

from
of

any ex-

even predom-

such exports

means of produc-

in

found

both

The

to play.

of non-productive

of the state's

the goods famine

we have

consumption

diminution
the
and

are two of the bedrocks

nor an artifact

This

particular

S and P.

exchange and non-productive

Yet each aggravates

this

obtains

the

towards

mention

of

means of

state

historically

way out

not

industrially-produced

is

conclusion

circumstances.

present

expenditure

The process

the

so long

of non-equivalence

no accident,

If

the

maintenance

tion.

it

departments

the

go overwhelmingly

departments

than

it

market.

consumption

go to

the West.

a hoard

trade

USSR's

import

SII

Preobrazhensky's

this,

the

consumption

system

world

same rules

in

which

comes from

which

necessary

only

concentrated

intervene

can

the

not

one of

the

back.

buys

Once again,

state
to

from

production

II.

that

means of

less

are

somewhere within

dilemma

needed

SII(v+s/x)

then

arises

fund

consumption

of

not,

problem

latter

the

and sale

purchase

portion

does

I purchases

PII's

of

providing

the

can obtain

partments

icit

it

PI-SI,

as with

part

the

If

sector.

peasant
apply

must

the

policy

the short

of accumularun.

This

is

reproduction.
expanded
of
schemes
of our
involves

a great

difficulties
of
number

and

-373for

contradictions
the

foundations

of

petty

of

weight

that

economy--mean

of

We have

proper

the

to apply

backwardness

to

we have

of

change under

tradict

the

immediate

of

so far,

discovered

and the

both

the

different

and to

our

previous

analysis

see that

the

of

at

reinforcing

the

to

overcome.

ex-

Our analysis
conditions
political

of
advance

What remains
terms

movements

of

basic
goods

of
of

the
the

the

elements
of

accumulation

conditions
famine

is

general

an analysis

sectors--to

Soviet

be attained

period.

in

spontane-

accumulation

constant

specific

the

by

of

of

we will

only

impossible.

society--is

dominant

commodity-socialist

under

the

on

adequate

would

trying

industrialization

circumstances

the conditions

the

place

the

plus

and

is

state

to mention

There

capital.

can

takes

possess

a mixed

growth

the

not

itself,

which the process

in

itself,

capital

expanded reproduction
of fixed

ways in

accumulation

industrial

future

it

fact,

to
in

than

that

crisis

left

equilibrium

sector's

socialization

what

tendencies

This

lines

proportionality--not

towards

of the

state

left

does

which

if

short-term

economic

that

suggests

economy

different

seen other

the

acerbates

because

precisely

industrialization,

any

the

of

legacy

entire

a backward

along

expense

sector

production--which,

develop

the

state

for

resources

material

ously

the

of

directly

excon-

of accumulation.
NOTES TO CHAPTER 11

1.

VKA 22,

2.

"For
following:
the
the
About this
Preobrazhensky
noted
problem,
redisregard
of how to calculate
time being we will
the question
the
surplus
by
of
the
is
alienation
production
which
complicated
the
petof
the
product
surplus
the
and
value of
sector
capitalist
is
fund.
This
into
ty bourgeois
accumulation
the socialist
sector
brings
Its
importance.
solution
a methodological
of major
problem
domestic
and
between
prices
the
the
up
question
of
relationship
have
fn).
We
32,
given
22,
(VKA
those on the world market. "
p.
below.
365-70,
detailed
discussion
on pp.
a
problem
of this

3.

There is a diffence
means of probetween offering
state-produced
duction
agriculof
us
planned
via
to
sector,
the
cheaply
peasant
former
The
tural
exchange.
credit,
non-equivalent
and abandoning
is essential
and modernization
to any policy
of industrialization

p.

48 (Spulber,

p.

148).

Emphasis

added.

-374
but would only be possible
of agriculture,
basis
if
on a sustained
the general
structure
of non-equivalence
is preserved
as a source
of primitive
socialist
accumulation.
For an earlier
discussion
of
how the elimination
of non-equivalent
exchange could relieve
the
goods famine in the short
run,
see "Ekonomicheskie
Zametki
III, "
p. 76.
4.

VKA 17,

5.

Suppose we alter
the
but it is
it sells,
versa:

p.

43,
PI purchases
scheme so that
more from
SI which purchases
less from SIT than

Si.
SII.

(50008
(3000g

+ 1000p)c
+ 1000p)c

+ (2000g
+ (12508

+ 2000p)v
+ 1250p)v

PI.
PII.

(1000g
(3000g

+ 2000p)c
+ 1000p)c

+ (1000g
+ (1750g

+ 1250p)
+ 2000p)

PIT than
vice

750g + 1000p)s/x
+(
+ (1000g + 250p)s/x
consumption
consumption

fund
fund

PIT has 250 unsold

means of consumption
which it must exchange for
it can then purchase
250
money somewhere in the economy, so that
in means of consumption
from SII,
through
which it cannot obtain
direct
This much is the same as before.
Only this
exchange.
time
SII has a deficit
but of those
not of peasant
means of production,
industry.
It sells
3000 IIc(g)
to SI,
of state
only 2750 of its
from
since the latter
needs only that many means of consumption
SII.
SII cannot make these up, let's
say, by selling
more means
in means of proto PI than the latter
of consumption
provide
will
duction,
because exchange between the two is now in balance.
Similarly,
demand for means of consumption
PIT can meet PI's
of
PI has a hoard of money it
peasant origin
only if we assume that
it will
buy 1250 from PH but sell
only 1000
can advance,
since
have 250
back to it.
But then PI will
still
means of production
from
PII can use the money it obtains
unsold means of production.
from
it
SII,
PI to purchase
the extra
needs
of
consumption
means
in
its
imbalance
the
exwhich has them available
of
as a result
has
SH
is
that
What we have left
money
change with SI.
over
worth 250 and a shortage
of the same amount of means of producindustry.
PI has 250 unsold means of production
tion
and
of state
Reproduction
has advanced
250 in money which it cannot get back.
have
the
to alter
SIT
the
cannot continue
would
on
old scale.
for
indusdemand
its
lessen
its
technical
makeup of
production,
its
increase
trial
consumption
productive
means of production
and
have
to assume a
SIT
i.
from
PI,
would
of means of production
e.,
form of production.
relatively
more backward
6.

VKA 22,

7.

level
lower
to
a
transition
the
Ibid,
p. 59
p. 161).
level
higher
accumulaof
to
a
of non-productive
and
consumption
debetween
tion...
inevitably
of exchange
the proportions
alters
for
demand
II's
means
department
I and II,
increasing
partments
In
that
temporary
supply.
decreasing
their
of production
and
from
the
the
becomes
progressive
case,
more
country's
economy
the
forces,
surthe
development
standpoint
productive
the
of
of
net
and
gross
the
aggregate
plus
throughout
product
society,
grows
rapmore
grows
faster,
output
accumulation
and
of society
grows
of
idly;
growth
the
but
path--the
new
the actual
transition
onto

p.

56 (Spulber,
(Spulber,

pp.

156-57).
"...

-375the

relative
proportion

share
of
throughout

department
I--has
to cause
a temporary
the economy. "
(Original
emphasis).

dis-

8,

This case is identical

to the growth
in the peasant
budget after
the Revolution
and the elimination
of the peasantry's
old oblito the state
gations
and the landowning
The peasantry
class,
had more monetary
resources,
the supply of commodities
while
on
this
whose purchase
money could be spent declined
with the war
War.
Thus there
for the peasand the Civil
was less incentive
its
to increase
For Preobrazhensky's
antry
output.
analysis
of
this
phenomenon as a major source of the goods famine,
see "EkoZametki
I--O Tovarnom Golode"
("Economic
Notes I--On
nomicheskie
in Pravda,
December 15,1925,
the Goods Famine"),

9.

In reality
in the assumption
we must make certain
modifications
fall
that non-productive
consumption
will
with the overthrow
of
Preobrazhensky
the capitalist
that
regime.
the Soviet
cautions
to have considerable
state
will
continue
non-productive
expenses,
these will
tend to decline
although
over time as the administration becomes more efficient
and the needs of defense go down with
But these points
an end to the country's
capitalist
encirclement.
into
the future,
were well
even hypothetically--and
as we know
historical
development
they remained
as such in the real
of the
Preobrazhensky
had .. covered
USSR. Nevertheless,
an important
in the economy.
declines
If non-productive
tendency
consumption
demand a
level,
this
as compared with the pre-revolutionary
will
(independent
from before
labor
of those
new division
of social
from
factors
for
kind
a
new
of
proportionality
which also call
is no denying
Yet there
that
what pertained
under capitalism).
definite
had quite
in non-productive
the fall
politiconsumption
the defeat
and the
of the bureaucracy
cal prerequisites--primarily
democracy.
evolution
of proletarian

10.

Pages 335-36,

11,

If

12.

Note

25.

Stalin-Bukharin
drift
the
the
that
which
of
policy
we recognize
to the shortin the 1920's,
concessions
group followed
with its
better
(in
the
off
term interests
the
particular,
peasantry
of
famine;
that
the
and
the
goods
peasantry),
of
persistence
meant
foredislocations
the
and
this
period
the economic
of
perpetuated
backhelped
the
have
overcome
those actions
stalled
which could
both
have
been
Soviet
Union--policies
which would
wardness of the
Stalin's
see
must
we
an economic and political
character--then
just
USSR
such a
history
"solution"
the
as
of
and the consequent
distortion.
permanent

VKA 22,

pp.

56-7

(Spulber,

p.

158).

of

-376CHAPTER
OF FIXED

ACCUMULATION

THE

When Preobrazhensky
under
tration

of

the

ability

to

overcome

from

abstracted
tors

it

the

this

strictly

fact

that

22, he took

up this

question

but only

a fairly

simple

at

is

There

tionalities
particular

way.

duction

fixed

of

proceed

analysis

product

both

of
in

specific

the

replacement

discussion
the

various

solving

concrete

the USSR, all

of

the

of
the

capitalism
departments

if

into,

fixed

of

and in
of

in.

both

the

context

of

to

ex-

reconstruct
Preo-

that

under
and the

from

simple

accumulation

affected,

to

level

of
in

manner

the

processes
in

part,

our

reproduction
of

the

see further

fixed

a commodity-socialist

reprois

reproduction

of

the

in

We will

11.

the

its

that

done

capital

in

reproduction

and emerge
also

in

occurs

extent

we have

sectors

dispropor-

be reproduced

permit--for

are

Preobra-

Material

and will

the

Chapter

in

VKA

sectors,

just

expanded

famine

goods

sectors,
problem

fill

to

relations

This

in

between

analysis--not

account--to

enter

sec-

Later,

conclusions

seen one way this

social

and consumption.

of

and in our

must

use values

of production

the

Conversely,

society

and

reach.

somewhere

already

capital.

and its

which particular

that,

We have

smoothly,

technique

originate

commodity

completely

and deriving

from

the

within

economic
analysis,

products.

we had almost

to

a greater

a value

exchange

and not

we have

own--that

of

of

pene-

towards

and petty

material

gap in

one major

our

must

stage,

had been unable

still

but

zhensky's,

the

of

level

kinds

reproduction

former

the

capitalist

own tools

our

using
himself

brazhensky

the

expanded

tendencies

the

at

Even here

panded reproduction.
the analysis,

inherent

CAPITALISM

see how capitalist

afforded

different

qualitatively

produce

its

CONCRETE

of

to

order

sector

some of

UNDER

analysis

was in

petty-commodity

He did

stagnation.

CAPITAL

up his

took

capitalism

concrete

12

capital

economy

like

and that

under
the
not

-377-

only

their

stantly

adapt

whole.

Out

between
now
one hand,

to
of

tion,

maintain

the

of

the

of

the

of

of

if

the

as a

system

on the

reproduction,
on the

exchange,

process

con-

must

we have made up to

expanded

aspects
on the

conditions

in

separation

volume

material

composition,

equilibrium

be met simultaneously

must

this

of

expanded

economic

other:

reproducis

activity

to

go on

KI.

KII.

PI.
PII.

capital:
+ 1500c)c

3000 fixed
1200(300f

capital:
+ 900c)c

the

we have
is

capital
the

to

have

would

fixed

in

tive
PII.

As for
will

the

arisen

KI and PI,
both
only

the

the

of

com-

in

those

the

III.

Part

KII,

disproporof

compositions

organic
of

in

capital

eliminate

will

= 6150

production

examples

our

effects

out

account

of
This

means of

we assume that

as fixed

= 2000

and circulating

composition

unequal

= 3000

accumulation

capof

form.

and PII.

KII

Total

fixed

their
as in

KI.

trace

"pure"

their

between

PI produces

= 3000
= 3150

This

from

moment we leave

serve

fund
fund

organic

in

that

us to

allow

and PI and between

difference

above,

= 5000

sector

capitalist

same proportions

raised

equal

the

down into

and KIIc

KIc

assuming

and will

For

in

+ 1500 consumption
+ 2100 consumption

ital,

VKA 17 (see

+ 150s(a)

+ 150s/x

+ 300v

1500c
1050c

that

Preo-

modified

+ 250s(a)

+ 250s/x

+ 500v

production

it

slightly

from

capitalism

Total

Similarly,
so that

"concrete"

5000 fixed
2000(500f

We have broken
ponents,

we have

investigation

our

194).

5, p.

Chapter

of

part

scheme for

brazhensky's

while

material

we abandon

analyses

certain

its

disruption.

For

that

to

need

necessity

and that

which

without

tions

the

our

Each imposes

but

production,

gross

assumes

there

that

produced

consumption

capital,

is

constant
at

least

no qualita-

by KII

means of

KI produces

and as circulating

circulating

exchange

mutual

KI

between

so far

and

production

capital,
as its

ex-

-378K is

change with
stant
It

i. e.,

capital,

be noticed

will

capital

wear out

"fixed"

fixed

capital

labor

will

i. e.,

produce,

of

process

a longer
their

basis

over

in

capital
are

in

P to acquire
some of
than

one year.

no distinction

be fixed

will

There

changes

to

than

labor

of

speak

of

entirely

condi-

We can speak
implements

as certain

at

the

of

they

as their

the

outside

commodities.

fixed

between

of
of

commodities

in part,

least

circulation

and creates

and KI

(or

SI)

on the

constitute

of
very

a striking

each
crux

the

and circuturn-

of

periods

to

to

out
its

and PI on the

These

mutual

sector

upon

of

will

be greater

in

how,

the

the

process
P's

own imbalances,

of
of

products

material

famine,

Preobrazhensky's

PI

and between

one hand,

goods

depart-

between

inter-relationships

Soviet
of

confirmation

(K or S),

interdependence

a growing

the

sector

lifetime

trace

overcome

and allow

assumptions,

industrial

and whose

be able

sector
other.

departments
the

from

ability

these

modify

capital

we will

the

provide

we assume that

is

se,

sector.

sector,

we will

production

of

sults

we have

13,

industrial

other

immediate

Chapter

ment II

different

fixed,

and the

K or S greater

technique

per

turnover

remains

Thus

a year.

insofar

petty-commodity

means of

which

of giving

implements

fixed

fixed

of

its

petty-commodity
sense,

any stocks
if

and that

production.

down into

realistic

"capital"

of

and PIIc

con-

1
same.

the

Later,

the

own means of

Plc

is

within
of

period

value

production

But on a yearly
lating

the

with

a contingent

have

This

in

self-sufficient

we assumed

backward

any form

as of

in

P.

their

of
broken

not

be replaced

and must

when dealing

tional

of

relatively

capital,

all

have

nor

department

is

KI and PI are

produce
we have

that

either

P's technique
all

they

components,

and circulating
in

Both

concerned.

and our

the
each
rein

analysis

VKA 22.
Returning
troduced

into

to

our

scheme on the

Preobrazhensky's

preceding

original

figures

page,

the

do not

changes
change

we inthe

basic

-379of

conditions
deficit
a

of

means of

surplus

of

if
way,

we carry

get the

same problem

balance

the

means of

rising

KII

the

At the

as in

in

KI will
to

fund

has grown
in

example
PI.
PII.

II's

562.3.

If

VKA 17,

then

1530c
1071c

P's balance

for

way short
if

of

we follow

in P go to
PI.
PII.

KII

the

this

of

would

better

than

growth

in

KIIv.

to

+ 259s/x

+ 310.7v

+ 155.4s/x

+ 155.4s(a)

means of

production

and I(v+s/x)

by two per

fund
fund

+ 259s(a)

in

rise

is

K's

not

that

Preobrazhensky's

PI's

nine,

to

production

= 6273

459,

falls

and let

further,

which

Even

production.

means of

of

fund
fund

= 3123
= 3150

PI would

production

in

Total

the

of

all

rise

enough:

nearly

only

= 3060
= 3213

deficit

example

equal

shortage

as in

cent,

by only

K rises

with

The rise

recall

In

capital,

+ 517.9v

+ 1561.5 consumption
2100 consumption
+

still

KIv.

fixed

addition

new

we have:

means of

50.

KII's

We will

P grows

exchange

1561.5c
1050c

The quantity
with

demand for

Preobrazhensky's
PI,

increase

go for

for

go to

gives:

+ 1530 consumption
+ 2142 consumption

even

= 250,178.6
to

to

enough
K.

KIs(a)

and 17.9

same

K and P we

not

within

and 10.7

+ 932.13c)c

between
to

in

the

capital:

1242.8(310.7f
The deficit

In

P is

and so 107.1

capital,

capital:
+ 1553.6c)c

fixed

3107.1

KII.

in

by a

offset

production

is

K there

exactly

production

of

150,

is

same amount.

KIc(c),

equals

this

5178.6 fixed
2071.4(5l7.8f

KI.

out

additional

year

the

The growth

see,

constant

the

which

of means of

Within

sectors.

and extend

VKA 17:

shortage

circulating
end of

P of

accumulation

accumulation

for

32.1

in

two

450,

of

production

53.6

capital,

the

production

out

Accumulation
fixed

between

equilibrium

511.5,

of

means of

at

this

point

have available

to

an overall

shortage

leaving

exchange

fund

production

= 6273

Total

is

from

Preobrazhensky

half

only

exchange

of

of

the

KI.
solved

the

prob. -

-380in

lemof under-accumulation
resources

within

to offset

the

rearrangement
brazhensky

P,

under-production

of

in

this

decrease

comes from

will

be a rearrangement
in

would

permit
it

means of production
Suppose

that

is

KIs/x

stant

In

in

er that

the

on the

position

of

its

some of

KII,

per

KII's

to

of its

constant

being

enter

KII's

will

serve

Therefore,
about

we add up these

13.4
figures

will

capital,

and

production

of

the

as the
26.85

be fixed
we find

that

for

112.5

or-

advance

com-

material
per

of

cent

means

and other
as fixed

capital,

products

(e. g.,

circulating

part

which

makes up the
and 13.4

capital
at

is

Assume furth-

fifty

etc.,

KII

terms

the

adapt

con-

circulating

is

intermediate
for

the

of

in

KIv

capital.

buildings,

all

pro-

consists

say,

needs,

raw materials,

capital.

KI(v+s/x),
If

will

into

to

with

377,

in material

begins

along

proportions.

production

actual

machines,

etc. ) which

cloth,

additional

cent

it

so that

there

material

and 187.5

constant
KI's

obtain

if

capital

production

constant

capital
deficit

But what

that,

means of
to

can al-

Then perhaps

P alone

correct

circulating

period

output

which

steel,

lating.

of

fixed

PI that

circulating

scheme on page

KII's

case

constituting

of production
and fifty

next

part

new I(v+s/x)

62.5

capital,

constant

sector

the

in

the

We must

form.

the

as Preo-

inside

fixed

PI?

simple

which,

material

and 375 circulating

and 337.5

capital

and in

of

suffice.

one of

from

of

capitalist

initial

capital

this

sector,

within

use forms

sort

as we stayed

it

of

more

productive

PI was sufficient

This

no increase

its

of

production

needs
our

is

specific

share

the

KI.

no longer

will

its

the

made up of

capital.

in fixed

ders

125 fixed

of

natura

in

that

in

of

in

growth

overwhelmingly

KI and purchase
of

the

so long

There

the

alteration

duced by KI,

KI.

given

that

a parallel

is

come from

to

do only

deficit

a transfer

petty-commodity

analysis,

value

shortage,

KII

the

would

KII's

which can only

we allow

capital

a simple

remember that

a way that

such

persistent

cautioned,

bounds of

leviate

in

KI by effecting

the

end of

circuthe

-381first

fixed
ment
of

supply

fixed

is

capital

575.9.

and 356.2

capital

this

the 459 that

PI

has available

103 in

latter

then the

in

the moment let

deal

that
to

the circulating
of fixed

constant
It

capital.

exchange

103.2,

or

KII.

with

in

overall

PII,

in raw materials
determine
(1)
(2)
PI must

the

then

in

relative

P must

the

reof

production
available

capital

be reduced

would

these

with

can exchange

sizes

of

a marketable
KI,

in

increases

two conditions:
is

2%, and b)there

PI

it

so that

shift,

satisfying

P of
that

3183.6

equal

1591.8c
1029.8c

replace

PI will

and PH

+ 1591.8
+ 2059.6
fund

consumption

KIT to

we will

equivalent

PI to

deficit

For

KI has the

fixed

103 in

KIc.

of

assumption

value

from

con-

to

or

is

a)There
of

surplus

562 in

these

PI and PIT with

PI and

all.

an

206

We can

two equations:

PI + PII = 6273
1/2 PI - 1/3PII
= 562

PI.
PII.
PI's

this

of

way KII's

this

KI,

difficulty

of

obtains

have

then

In

while
in

growth

it

103 to

as part

this

of

of

much circulating

own department,

implications

approx-

as elements
this

sells

this

reproduce

leaves

of

103.

about

Thus production
declines

If

PI

come out

This

KII.

capital
would

K.

with

production

of

206.2

equals

capital

KI or

its

switch

circulating

a modicum

supply

capital.

can function

with

replaceKI's

and its

then,

which

its

new or

capital.

etc.,

within
(the

either

200.9,

deficit

exchange

has to

us assume

necessary

serves

for

natura

presently)

with

either

no longer

capital

stant

in

is

constant

for

raw materials,

capital

circulating

The total

in

in

constant

hand,

other

deficit

356.2

of

imately

circulating

circulating

all

Let

in

on the

capital,

some 407.1

requires

and 932.1

capital

circulating
fixed

II

production

year's

all
have

of

3089.4,

consumption
consumption

exceeds
the

206 left

giving:

PIIc

constant
over

to

fund
fund

by 562.

= 3183.6
= 3089.4
If

portion

of

sell

KI.

to

Total

PI sells
its

= 6273

356 of

circulating
KI would

then

this

to

capital,
have

this

-382of

same volume
up the

newly

To see how exchange

into

the

in

along

would

various

Chapter

out,

11,

and the

break

we must

thus

making

This

process

of

that

product

scheme is

to

similar

in

exchange

scheme down

our

each department's

of

sectors.

2071.4(517.8f_k

+ 1347.6c_k

+ 206c_p)c

+ 259(67f
1242.8(310.7f_k

KII.

KII,

to

sell

fact

those

proceeds

lines.

similar
KI.

work

components

different

with

are exchanged
we used

to

capital

deficit.

entire

further

fixed

produced

+ 576c-k

+ 517.9(133.9f

+ 191.9c)s/x

+ 356c_p)c

+ 384c)v

+ 259s(a)

+ 310.7v

+ 155.4s/x

+ 155.4s(a)
PI.
PII.

1591.8c

+ 1591.8(1029.8p

1029.8c

+ 2059.6

We have introduced

the

those

product

parts

more than

its

value
into

96.4

make up its
its

needs

same amount
chase
sale
of

it
(it

of

to

407.1

acquire

means of

has not
to

realize

in

it),

neither
nor

KI(v+s/x).

on the

is

an addi-

but

whose

all

entered
its

of

own
that

consumption

has all

hand,

other

and has

capital,
of

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it

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annual

require
of

that

course,

set

product

fixed
much

has that
does

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PI.

has not

stock)

to

P.

fixed
out

there

means of

PII,

KII.

from

it

reproduces

those

within

consumption

however,

produced

although

from

entirely

with.

consumption

fund

it

capital

equal

by KII,

fixed

the

562 of

reproduced

KI,

to

own fixed

its

that

remember

from

on purchases

to purchase

able

indicate

to

however,

was accumulated

PI,

purchase

consumption

product
KII

must

P,

of

Ic(c),

of

we must

addition

As for

capital,

is

KI

that

capital

initial

the

depends
all

portion

if
here

except

product.

constant

KI reproduces

Another

fixed

in

(90% of
its

of

KII,

with

tional

Ic(c).

k and p,

subscripts,

whose reproduction

be reproduced

can only

ilarly,

additional

fund

consumption

fund

consumption

Thus

one sector.

and 1347 of
206,

the

of

+ 562k)

aside
to

the

pur-

capital

for

much in

means

was the

basic

._,
:
`

-383we set

problem

200.9 fixed

capital.

they

can do the

With

these

exchanges

ital

destined

hands,

the

same amount

same for

its

576 in

workers

has

still
for

can make straight

all

exchanges

means of

the

its

of

means of

fixed

consump-

means of

and consumption

against

of

circulating

of

206 and 356 in

exchange

of

constant

KI has obtained

both

however,

KII,

con-

cap-

consumption

and circulating

cap-

respectively.
Looking

tion

fund

tion

fund,

at

562,

in

PI can reproduce

must

responding
means of

sale

to buy the
means of

means of

consumption

circulation

change

for

that
KI.

with
not
is

just

on the

part

it

come from?

be realized

meant
unless

PI now proceeds

that

amount.
we have

KI which

needs

that

to

from

do,

as it

has realized

of

its

own
forms

and other

But where

at

the

it

it

means of
of

all

of

its

do these

to

aside

P bought

I(v+s/x)

ex-

only

consumption

means of

requires

uses

beginning

exchange

could

departments

very
set

consumption

had 206 in
the

206

a cor-

without
all

KIT.

that

Of this

one of

following

206 in money which

means of

it

the

The other

raw materials,

We recall

capital.

a problem,

and PI can use

in

KIc(c).

PI produces

more

consumption.

fund

a purchase

PI receives

consumption

much fixed

of

consump-

KIT makes the

that

consumption

since

sale

capital,

what

So far

of

KI,

PI,

356 in means of

however,

the

of

be a little

from

1553.6

consump-

be much of

(assuming

its

of

KIT had 407 in

This

its

is,

This

not

buy

to

From this

constant

of the

This

PI.

562 will

purpose

1347.6

only

and will

its

of

part

KII,

raw materials

206 of

other

production.

of circulating

could

the

from

obtain

this

exchange)

KI produces

manner:

200.9

for

the

this

much in

that

The other

from

356 of

1029.8

realizes

PII.

with

be purchased

must

advances

purchase

obviously

exchange

purchase

must

the money KIT

it

quite

to reproduce.

as KII

first

it

PI,

mutual

via

difficult

of

for

requires

italists.
on its

KI against

KII;

it

sumption

KI and KII

solve.

from

capital

from

tion

to

out

that

them.

consumption

and has

;:'

-384managed to

acquire

all

terms

of

the

year,

it

has reproduced

use

it

the process

values

production

no return

purchase
left

not

purchase.

but

this

was to

it

its

sold

It

surplus

funds

leaves

us with
it

production

that

sell

the means of
replaced
means of
receive

needed only
to

PI,

KII

that

it

KII

with

sold

identical
In

from

its

constant

consumption

were

a portion

required
to
of

to

206 in

it

fixed

roundabout
it

for

circuit

This

sale

it

to

200.9.

The other

of means of

could

as we saw,
206 were

consumption
This

production.

and a hoard

these

KII

so that
KI,

of

all

new and
of

all

only

capital,

to replace

for

needed;

means of

has man-

has sold

it

it

value
in

the means of

fund

KI,

con-

and has no

of

was that
to

sale,

had pro-

had produced
more,

raw

in means of

all

exchange
here

a greater
sell

for

has realized

exchanges,

What is

equal

it

it

conversely,

consumption

capital

these,

of

was able

a shortage

KIIc(c);

made up its

fixed

the

of

its

intended

fixed

consumption

PI,

needs

has obtained

The difficulty

capital.

PI made

sales-without-purchases.

capital.

that

of

a subsequent

production

the

any of

in

need and hence

not

means of

it

that

all

department

means of

because

As for

means of

one-way

reproduce

the

of

which

the

of

back

by a somewhat

although

But

purchase

without

return.

next

be exchanged

to

206 more in

in

again

the

PI did

that

In

KI has 206 in

this

made a purchase

all

get

these

then,

no money for

to

needs

all

had produced

sold

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not

pj.

as well.

money for

with

bought

production
capital

did

Parallel

it

over

consumption
back

KI.

fund,

KII.

fixed

it

which

and has acquired

left

of

206 in

from

needed

begin

to

constant

production

advanced

all

portion

PI,

too,

has

It

its

advance

when it

exchange

sumption.

aged to

PI,
KII,

have

capital,

means of

of exchanges.
duced for

of

for

consumption

entire

all

PI--fixed

did

than

from

unsold,

from

materials

must

from

it

raw materials

it

has had to

means of

capital

the

of

of

from
leaves

money of

an

amount.
sum, after

all

the

exchanges

so far

we are

left

with

KI,

which

-385has 206 unsold

to get
it
what

fixed

206 in

age of
purchase

its

of

ed all

KI

while

of

requirements

back

gets

yet
its

plus

capital

money it

the

has not

been able
and above

KII

this

uses

Then KII

sold.

stock

of

money to
has reproducfixed

accumulated
All

advanced.

short-

other

cap-

material

satisfied.

are

reproduction

it

and a simultaneous

enough,

KI has not

as fixed

only

206 in money over

of

exchanges

Clearly

capital

constant

a hoard

various

capital.

fixed

the

its

towards

advanced

has

which

can function

which

206 in money which

advanced

and KII,

back;

production

has

and which

capital,

ital,

means of

Observations

tirely

historical

accurate
in

tion

the

growth

sumed parallel
made our

in

i. e.,

was falling,

ing upon petty-commodity

nature

of

or

its

our

example

is

he did

for

the

constructing
the

figures

realities

of

problem

tural

upon that

of

In reality
social
tions
then

There

and industrial

ter-connection

capital
in

our

we would

Russian

VKA 17 because

problem

each

out

this
of

would
and
other, /how the

encroach-

in

one's

the

changed
this

way of
took
the

reflected
the

which

one of

was precisely
grow

production

with
the

the

sense

P's

that

Preobrazhensky

important.

capitalism,

have

not

another

it

was because

this

would
In

solution.

K and P in

specifically

economy had come.

this

extremely

K, and we pre-

was constantly

capitalism

production,

Produc-

If we had presumed

simpler:
that

in

than

In part

sectors.

a good deal

exposition

production

both

an en-

course,

capitalism,

was greater

sector

of

not,

developing

of

picture

petty-commodity

is

investigated

just

we have

The example

Soviet

how agricul-

tandem

and in

growth

was conditioned

mutual

in-

other.
we would

taking
schemes
have

not

had all

of

within

P.

If

solely

place
had not

needed

have

the

to

worked
transfer

out

exactly

capital

rearrangements
the

physical

as technically
and productive

of

the

propordemanded,
resources

-386from

both

PIT
to

been able

to

means of

production
its

have boosted

the next

of

its

of

off

in
of

sorts

italism

its

raw

we would

economic
Thus

we will

of

could
This

capital,

was
in

examine

production

see

with

its

with

a chronic,

rors

the

if

future

and

production

towards

but

production

inability

of

in

events

that

the

below.

altogether,

or

To the

them

and

it-

capitalism

of

extent

processnecessary

the

state

at

while
greater

ever-greater

growth

as

case,

an

we will

the

this

within

Union

on mutual
later

and brought

adjustments

do so.

Soviet

There

based
sooner

to

requircap-

demanded

place

demands

equilibrium

petty

take

the

be no stable
sectors,

to

onto

course,

extracting

the

of

more

comes

course

of

by

only

increasingly

that

development

more detail

and state

and

have

growing

capital

economy,

of

capital-

constant

petty-commodity
technique

the
Not

And in

capitalism's

not

I of

capital:

it

and

by other

produced

production

new methods

more

up in

take

of

would

fixed

relations.

the

a level

that

petty

of

of

raw materials

Eventually,

as well.

of

materials

are

own production

areas

more

that

for

tendency

growing

upon

demand for

total
its

the

dependence

demand for

these

equilibrium

to structure

to oust

peas-

a shift

latter

the

way was department

this

raw materials

achieving

of

them,

could

of

required

which

is

reflect
its

latter's

absorb

would

quantities

we will

have

constant

capital

in

expanding

own sphere

same time

self.

famine,

KII's

the

subordinated

capitalism

for

goods

circulating

satisfy

some of

because

but

ed these

ing

of

PI had not

capital

KI so that

types

increase

Only

to

able

sector

pushing

the

Soviet

to

capitalism

elements

within

both

of

into

power

instance,

circulating

we would

do accurately

schemes

modes of production.

PI,

labor

the

with

by KI,

for

If,

356 in

the

206 needed
and

KI.

to

chapter.

developing

ist

all

output

case

What our

other

for

the

plus

the

KII

provide

ant origin

indeed

PI and from

need

future,

This

in

turn

see that
the

sector
that

mir-

NEP, which

under

of

along

the

there
peasant
would

have

dispropor-

-387we have

tions
has not

uncovered
freed

completely
new methods

entirely

bear

would

have

to

ments

that

had

a transition
this

can

tion

of

economic

as

highly

one

thing:

of

expanded

without

By starting

from

an analysis

of that

of the

capital

produced

there

the

i. e.,

realized

the capitalist

sector

that,

exchange
PI than

vice

the right

versa,

kinds

required

it

mediated

this

the

of

it

could

much less
tal--as

expand
it

was for

it

have
in
KII

worked

state

sector

economic

adjustthe

within

in
USSR--

the

of

spontaneous

It

in

regula-

last

they
it

Here

The

our

was department

were

II

to

able

acquire
they

one department
for

as important
have

even on the

increased
capital

need
of

KI to

PI--and

from

from

production

II,

and only

of

an unequal

consumption

production

fixed

of

be-

of

capable

as mediator

hav-

constant

and means of

had to

KII's

problem
to

addition

more means of

bit

was every

derived

components

solve

were

two departments

the

fact

chapter.

in

of

exchange.

we in

because,

acted

effect,

production

have

their

of

We could

KI purchased

with

elements

material

our

the

solve

make up each department's

as money.

continued

to

problem

proportions,

capital

line

material

different

only

that

it

to

reproduction

here,

capital

impossible

the

one department

constant
not

out

that

was

various

the

of

these

means of

exchange.

circulating

which

and if

was because

the

apply

in

PI and KI.
3

and

proletariat--even

of

is

expanded

correct

ing exchanged,

between

as

solving

use values

in

that

the

the

the

of

we investigated

fixed

of

discreet

the

all

production

reproduction

replacement

of

exchange

at

accumulation

value

of

expanded

how it

of

that

we arrived

of

power,

contradictory
The

of

weight

dictatorship

also

the

reproduction

same rules

ing

for

law
labor

larger

reproduction

capital

schemes

system

by planning.

productive

the very

its

demonstrate

also

any

the

maintain

the

events

Our schemes
problem

to

Under

mean

from

and

be made

to

in

allocating

a larger

period
only

itself

of

as a whole.

system

inherent

are

for

which

old

obtain

without
scale,

fixed
it

II,

capi-

was short.

-388it

If

had been

from

terials

PI

from PI it
PI's

KI

could

still

rest

with

KII

would

had a hoard
KII.

money on to
of

because
in

place
this

the

is,

an "exchange"

where KII

required

them because
present

it

problem

of
is

there

tion,

the

example

of

shift

means of

the

ital

was identical

that

went

culating
fixed

into

KI but

a product

within

the

production

Not

that
For

take

not

mediated
the

at

KI and KII,

constant

capitals,

could

not

obtain

KI could

not

use in

the

it,

i. e.,
At

the

each and every

have

to

year
exceed

on the

value

one fourth
end this

overall

the

and,

it

of
form

use

relations
fixed

its

be solved

fixed
of

change

obtain

if
the

that

producAt

capital.

KI Is constant

cap-

means of production

had to

even

only
towards

product
within

the

and three-fourths

capital

This

could

the

of

proportion

accumulation,

what

social

production

capital.
of

could

capital

that

conclusion

previous

as a whole,

we saw that

process
with

our

fixed

emphasis

capital.

not

exchange

of

and 67.5% circulating

KI did

from

KI:

KII

between
their

of

had

could

problem.

our

have

still

from

exchange

"exchange"

production

have

would

this

a certain

and would

have been

of

have passed
short

needed

elements

reaffirms

accumulation

an increasing
start

KII

PI

form.
our

of

the

had for

only

a growing

production

between

down.

type

because

nature

have broken

have been

should

an unequal

means of

physical

Finally,

the

production

not

desperately

it

means of

would

while

but

exchange,

it

a particular

it

in

and even though

KI)

spend;

That

PI was mediating

same time

of

raw ma-

balance,

PI would

capital

was in

would

in

fewer

consumption

the

obtained

(from

not

circuit.

means of

been

been produced,

exchange

unequal

that

right

had needed

that

circuit

have

money

could

had not

they

the

contrary,

fixed

the

to go without

have

consumption

money it

KII

of

needed

of

of

On the

means of

had a sum of

with

latter

the

have
would

the

the

needed,

exchange

quantity

instead

than

even though

then

PII,

change

would

if

total

off

its

to

cir32.5%

be demanded
production

in

own accumulated

-389value.

surplus

these

types

however,
in

period

every
of

of

means of

of primitive

leave
of

even more

of

capital
the

the
the

realm

goods

socialist

from

the

emanates

the

of

concrete

famine

in

the

just

our

secfrom

KII,

must purchase

analysis

of

capitalism
Soviet

industrial
not

economy which

For

production.

when we drop

strikingly

capital

fixed

department

other

context

seen

no fixed

deficit

the

we will

the

is

this

P purchases

and where

but from

it

But

that

assumption
tor,

this

question,

and deal

economy during

with
the

accumulation.

NOTES TO CHAPTER 12
1.

"On the average,

in proportion
the larger
the fixed
to the
capital
is its relative
(not absolute)
total
the longer
capital,
period
of
it is,
its relative
the shorter
and the smaller
reproduction;
period of reproduction.
form a much smaller
Implements
part of handidoes of machine-production
than machinery
capital
craft
capital.
implements
But handicraft
than machinwear out much more quickly
I, p. 243, Original
Theories
value,
ery. "
of surplus
emphasis.

2.

The marketable
the remaining
for
available
562.

3.

11, when
This is the reverse
of the situation
we had in Chapter
I of
discussing
There department
system.
exchange in the Soviet
from
fewer
the
the state
purchased
means of production
sector
We will
than vice versa.
show in our next chapter
countryside
is a basic
the Soviet
that this
economy.
within
contradiction

4.

Again we must caution

of
the value composition
confusing
against
be noit will
Also,
form of its product.
Ic with the material
products
ticed
that we tailored
the distribution
of the different
for
This
KIs/x.
between
KI
KIc,
KIv,
simwas
and
of
unevenly
32.5%
fixed
in
407
know
We
KI
or
capital,
plicity.
must produce
this
accordingly
If we had distributed
ratio
of its total
output.
difhave
it
no
I's
made
would
the categories
over all
product
of
have
it
ference
renin the solution
though
would
to the problem,
have
take
to
dered the explanation
place
how
would
exchange
of
is.
it
difficult
than
already
unnecessarily
more

surplus
of PI = 459.
103 to KI, there must
sale to KI, since the

356 to KII,
If it sells
and
be a further
103 also made
deficit
K is
within
overall

-390-

THE

last

In the

that

In doing

capitalist

Whether

petty

had,

the

affect

the

lowed P to
ductive

in

grow

the

resources

within

that

course

of

its

means of

had to

the

be less

would

own output

expansion.
did

not

The fact

that

meant

merely

it

its
of

solution.

much

production.

a leeway

grew

KI.

so as to

production

actually

and

from

was very

preconditions

its

year,

production

restructure

in

capital

a single

production

to

sector

sector

constant

capitalism
it

or

the

needed

material

problem

example

of

adjusted

allowed

our

all

any means of

afforded

the

of

USSR

vitally

petty-commodity
of

nature

with

which

all

the

THE

two modes of

production

satisfy

or not

in

sector

sector

not have otherwise

and thereby

the

petty-commodity

this

that

P purchased

of

between

the

the

provide

IN

was reproduced

The inter-relation
one where

GOODS FAMINE

we assumed

department

neither

13

chapter

sector

the peasant

CHAPTER

really

that

transfers

we alof
if

than

severe

prowe

in
had assumed production/P
must now be dropped.
its

to extend
non-capitalist
produced,

areas
and then

itive
these

methods
social

had originally
tronics

of

these

plant

in our

schemes,

society

where

this,

where
that

of

production

Brazil,

we must

even though
are

by those

subordinated
If

that

large,

did

they

British
include
factory

penetrate

those

could

capitalist

in

pure

into

not

its

product

will

exist
vestiges

be
methods

form.

Capprim-

essentially

the

become

themselves

powers

under
the
of

that
an elec-

establishes

in

of

coherence

capitalist

capital

even dominant

had

to

and although

down,

them.

occurred

be introduced

formations,

to

capitalism

raw materials

production

course,

would

be broken

dominated

there

world

subordinate

remained

in

had first

the

would

but

capitalist,

of

course

It

and economic

societies

real

and

unrealistic

development

raw materials.

to

of

its

is

condition

of

None of

and technique,
italist

In

supply

This

contracted.

K and not
midst

petty

of

produc-

-391The workers

tion.

and the

of consumption,
of its

will

will
with

them habits

two

one or

proletarianization.

form all

production
or

itself

development

In the

period

problem

in

following

the

of

portion

the

workers
bringing

down in
is

capitalism
not

phenomenon

the

to

course

trans-

capitalist

Trotsky's

same type.

a Russian

by the

state

prevailed

but

More to

portance.
the state

of means of

for

pro-

combined

an imperialist

and the

table

commodities
it

10, this

both

growth

in

difficulty

In

base,

society
primarily

in
the

the

of

peasant

in

if

weight

the

of

standard
rise,

could

Union

Soviet

But,

produce.

c)as

of

as we elaboraded

agriculture

also

had preconditions,

industrial

sector.

The state

dilemma.
it
economic

For

had to

terms--and

as we have
faced
its

cease

argued

was the
poverty

being
this

plant

the

working
of

expor-

means of proin Chapter

economy was
to rise

agriculture

and

was by no means a strict-

throughout--the

poverty
of

peasant

of

primarily

production

agricultural

in

a source

a source
obtain

could

im-

a source
b)as

living

in

growth

economic

sector,

state

pro-

agricul-

not

a)as

agriculture

petty

superiority

contrary,

of

confronted

over

economic

condition
of

as a whole

the

of

question,
the

very

so that

in

be transformed;

economic

the

itself

not

become socialist.

least

which

an insoluble

had to

at

departments

with

development

the prior

industry,

development

population

could

by any sort
the

Union

dominance

Its

to

point,

consumption,

class

duction

the

was the

sector

raw materials

caught

state

Soviet

the

form.

Quite

sector.

over

Revolution

different

a rather

enjoyed

dustrial

break

will

production--but

the

no way guaranteed

ly

countryside,

means

was in

it

the

that

of

was not

duction

ture

Many of

of

thinking

all

one.

this

farms.

The tendency

relations

their

much of

may need a substantial

off

capitalist

for

peasantry

non-capitalist

generations

into

social

and uneven

factory

and ways of

of their

duction

on the

from

raw materials
be only

depend

most pressing

and narrowness
and equipment.

of

its

in-

Here

the

-392of

problems

accumulation

tion

the

of

perpetual

branches

various

initial

the

devoted

Preobrazhensky

structure.

and demonstrating

West and massive

to

aid

inevitable

the

Soviet

laid

panded reproduction-actually

last

the

It

so far,

nor

new in

is

terms

or

to

of

and social
proving

this

a revolution

in

interesting

that

that

the

none

follows--all

which

the

of

through

except

articles

Union.

obviates

between

economic

necessity

out

be quite

to

we consider

of which

the

we have

exposition

his

a ques-

disproportionalities

the

of

take

not

be established

equilibrium
could not
the
in/whole
fabric
transformation

a radical

of the

for

production;

"equilibrium"

of

so far

is

reproduction

that

were so great

point

Expanded

re-establishment

of

we have outlined

capital

form,

extreme

on a particularly

fixed

of

analysis

of

ex-

Preobrazhensky's

contradicts

conclusions.
Let
tinction
those

between

those

means of

production

purchases

from

state

capital,
will

ital,

it

PI's

times

of

then,

that

it

those

all

be implements
that

the

or

fixed

as any other

capital

This

being

the

years.
PI.

PII.

If

we again

1000 fixed
1500(100f
500 fixed
1050(50f
let

total

types

of

to

PI's

are

purchased

produced

within

P would

capital:
+ 1400c)c
capital:
+ 1000c)c

SI

look

of

fixed

capital.

is

total

circu-

cap-

constant

by PI,

state

the

relative

We assume,
they

whether
within

the

same lifetime

sector,

i, e.,

ten

Total

= 6150

follows:
as

+ 2100 consumption
grow

sim-

entirely

SI has the

from

and

sake of

production.

+ 1500 consumption

production

the

reproduced

the

itself

between

produced

raw materials,

case,

from

means of

production

capital

fixed

consists

we now distinguish

means of

labor

of

two

For

sector.

obtains

now we make a dis-

P produces

that

much relative

that

the

of

it

Only

P.

own production

very

necessitates

turnover

but

to

amount

the

that

all

while

not

but

year,

original

we assume that

lating
This

our

which

plicity

scheme for

us take

by two per

fund

fund
cent

= 3000

= 3150
and distribute

it

-393between

proportionately
60 and PII's

PI's

simple,

are quite

for

the

that

that

portion
for

goes
(1)
(2)

And for

t,

PI.

PII.

figures
capital

and y the

for

then

x
part

PI

=t

t,

its

not

constant
in

1017.5

only

means of

This

SI,

not

PII's

in

an "internal"
We now have

to

PIIc(f),

leaves

another

means of
For

the

that

of

capital
the

= 3205.2

less

PIIc.

fund

fixed

the

means of

now falls
previous

chapter,

production--at

as a whole

production
Tak-

we have

for

last

So the

far
as
there

of

SI and SII.

between

has accumulated.
least

exchange

upon SI.

as a replacement

PH

re-

shortage

aggregate

those

capi-

has to
for

available

production

capital

economy

fund

additional

505.5

means of

= 3046

PI therefore

overcome

same as K in

8.8

its

SI(v+s/x).

up fixed

50 fixed

620.8.

of

production

562 in

consumption

consumption
all

help

this

demand on SI for

concerned--is

used

of

add to
plus

This

the

S as the

deficit

of

really

since

replace

ing production

PIIc.

of

does

plus

as part

fund

+ 1523 consumption

equal

capital,

production,

will

then:

simply

does

realized

SI.

P is

t.

+ 2136.8

PII's

produce

27.8% of

and y=
in

=t

capital:
+ 1017,5c)c

of
are

+ y)

508.8 fixed
1068.4(50.9f

Part

is

cap-

in production,

capital,

capital,

capital:
+ 1421.5c)c

surplus

year's

variable

growth
fixed

of

fixed

of
these

between

1015.4 fixed
1523(101.5f

PI's

that

stocks

determine

to

total

stocks

35.8% of

2(. lx

production

with

the

the

constant

+ y)

and y=

x+y+
2x -y=0

13.9% of

Total

lx

x+y+(.
l. 4x -y=0

their

PH

(3)
(4)
x=

to

new circulating

25.6% of

x=

for

t stands

goes

go to

we need

how much of

now calculate

no distinction

we've

If

we must

must

equations

since

value.

and surplus

total

63 new product

The simultaneous

ital.

tal

PI and PII,

as SI(v+s/x)
is

a shortage

-394in means of
in

tion

P,

to S to

to

values

in

include

working

towards increased
If

x is

to increase

the
its

value

for

PH by the

following

PII,

PI = 2[. 1(x

(6)

PIT

SII's

fund

from

This

gives

us:

(7)
which

PH

(1,5x

3.9x,

and PII's

cumulation
(8)
Solving

occur

within

that

product
SI,

total

and if
products

must go

x'

is

of

PI and

the

+ 2(x'

the

+ 1000)

= 3(2.1x'

PI's

that

means of

plus

(2x'

+ 500)]

is

of

= 2(1. Sx + 1500)

+ 1000)]

+ 1050)
fund

consumption

new fixed

in

capital

deprecia-

the

plus

production

less

(x'),

PIT

= 562 + 50 + x'

= 112

(1)

our

through

7.2x'.

additional

(4)

we know that
another

in

product
PI's

share
for

equation

123.

P equals
of

this

the

equals

total

ac-

of x and x':

+ 7.2x'

= 123

equations

add to the fixed

capital

surprising

total

So we have

(7-a)

a somewhat

from
the

express

satisfy

[PIIc(f)]

3x'
-

in terms
3.9x

annual

capital

+ 1.4(x

deficit

know that

From equations

we have

a new constraint
to

pass-

into:

1.5x

Now, we also

to

+ 1500)

rearranges
(7-a)

we can

+ 500)

we have

tion

fixed

+ 1000)

= 3[. 1(x'

equals

has not

equations:

(5)

PIIc(c)

two depart-

that

have

will

additional

of

then

that

is

PI and

that

these

capital

This

to meet

capital

remember
of

can sell

in PI.
PI's

purchases

fixed

of

shift

to

produc-

it

that

fixed

of

products

and PIIc.

the

of

annual

rearrange

production

now we have

value

production

same value

The condition

the

PIc

out

we must

own production

the

into

means of

Only

of

include

and tear

ed as wear

its

demand.

the

Once again

enough

adapt

increased

and do not

ments,

to

SI

represent

115.3.

of

PI has

so that

allow

society's
PII

production

and

(8)

stock

result;

we get

in Pl.
x'

x=

Solving

= -11.2.

This

52.2.

for

That

x',
is,

is

what

we must

however,
we must

cut

we get
pro-

-395in

duction

does

This

inishes.
it

PIT by so much that

under

would

ialist

or

even

food stuffs

workshops,

the

same meaning

capitalism

or

for

the

socialist

to

ital

falls

by 11.2,

that

er goods

are

introduces

of

new fixed
that

to

amount,

which

it

between

left

we have
hand

(7),

does

difference

actual

side

us to

determine

capital

due to

SI,

not

value

social
to

only
of

its

do,

by SI

recognize
(7)

reduced

for

fixed

technical

application

does

not

have

to
any

require
to produce

any
least

at

by that

these

means of

would

be that

would

for

negative

value

economic

meaning--it
for

the

underestithis

To eliminate

capital;

x'

marketable

over

production

fixed

for

to PII's

can cut

requirements
of

the

implies,

do unless

consum-

result

however,

capital.

has a real

expense

production.

shifted

and PIIc(c)

the

the

and other

The result

fund

total.

production

at

addition

does not

itself.

that

the

actually

not

the

that

states

obviously

and would

demand for

smaller

(7)

actually

consumption

equation

PII's

SI

that

re-employed
PIts

negative

x',

the

cap,

The same agricultural

up this

for

fixed

of

has risen

means of

latter

and the

PII's

to

of

are

farm,

modifica-

out

crops

allow

PII

production

A negative

were

tifact

means of

that

food

Equation

production

production

mate the

set

must

If

devoted

power

production

If

equation

more than

produce

are

little

very

and

same handicraft

the

commodity.

production

artifact.

from

require

of

fund

purpose.

according

the

in

not

consumption.

to

used

equations

means of

if

would

consumption

capital

r,

for

as our

capital.

production

same peasant

means of

to

now applied

PI's

on one and the

labor

means of

were

a serious
in

fixed

produce

before

Even so,

raw materials

out,

of

sector

economy as

of

type

amount

a peasant

The production

means nothing

the

for

dim-

actually

a commodity-soc-

which

other

and other
to

going

machines

the

capital

of

place

those

this

day

of raw materials
of that

take

in

one or

working

peasant

surplus

economy.

state

can be carried

least

handle

tion

fixed

of

have

processing
at

stock

not

can and will

and their

its

x'

on the
allows

circulating
but

ar-

on the

-396hand

right

fixed
al

side

PIT

capital
because

production
means of

to

rise

still

product

fixed

that

of the

petty-commodity
from

and no longer

(7-b)
is

(1.5x
the

(7-c)
Solving

2.
lx'
-

and 13.1

the

are

43.2

will

see its

own stock

Knowing

the

in PI and PIT

we

department

covered

out

SIc,
into

considerations

+ 500)

fixed

of

and its

of

in

over

us to

capital

accumulation

from

the

producPH

Conversely,
same 13.1.

by this

decline

allows

fixed

of

course

Depart-

= -13.1.
its

to

consumption.

capital

material

the

taken

capital

x and x'

and x'

add 56.3

will

means of

fixed

56.3

determine

production

composition:

capital:
+ 1478.4c)c

+ 1584 consumption

fund

= 3168

486.9 fixed
1022.5(48.7f

capital:
+ 973.8c)c

+ 2045 consumption

fund

= 3067.5

the

In

each part

to be realized,

figures

gross

above.

a consequence

of

1056.3 fixed
1584(105.6f

We can take

that

Finally,

= 562 + . 1(x'

x=

acquired

newly

and other

values

we get

sector

already-existing

food-stuffs

page 382,

an even

as follows:

+ 1000)

(8)

and

are

of

PII.

petty-commodity

tion

PI.

(7)

these

of

will

= 112

(7-c)

equations

Of this

stock.

(2x'

all

employment

within
is

These
agricultural

forth

fall

its

cut

same as
1.5x

ment I of

cuit

Taking

of

future.

depreciation

equation

+ 1500)

PI.

call

production

their

SI(v+s/x).

to

and their

the

addition-

not

sphere

will
in

all--the

capital

time,

SI

at

SI does

another

that

from

sector

we can reformulate

account

in

PI

means of

zero.

fixed

over

in

capital

as these

note

is

but

exist,

a surplus
of

Si

transferred

be replaced

should

which

has

PH

makes no sense

from

They must

output

greater

it

equation

requires

production

production.
give

the

of

order
of

the

we will
of

the

fact

for
to

reveal

that

to

the

process

of

production

separate

have

in

the

state

department

the

travels

in

some critical
I of

the

sector

exchange,

commodity-capitals

introduce

from

state

cirorder

modifications-sector

is

no

-397longer

fixed

producing

just

capital

for

SII,

but

for

both

departments

P
as well.
of
SI.

5178.6 fixed
2071.4(517.8f_g
+ 32.5f_p

One look

capital

portion

sumed that

for

ital,

part

is

up for

SI(v+s/x)

arranged

fund

means of

against

quantity

Conversely,
vation
16.2
it

of
of

either

It

of

of

of

out

worn

means of

SI has produced
food

SIs/x.
cannot

crops,
In

return

or need

Because

any of

its

of

fixed

This

is

in

for

SI receives
obtain

fixed

its
not
for

capital,

consumption

represent

not

(plus

from

the

exchange

the

form

Since

the

against

for
fund)

use

in

PII
aside

SI(v+s/x).

against

of

PII.

with

has set

it

for

part

material

case

in means of

SII.

In

accumulation

an equivalent
48,7

cap-

production

which

capital

fixed

capital

means of

PIc

sit-

we have re-

the

of

fixed

exchange

require-

like

Therefore

SI.

As a

be replaced.

which,

capital

SI,

of

stock

and has to

fact.

SIc.

48.7

which

a small

we as-

Now the

capital.

all

Take

capitalism

material

constant

can only
a part

e.,
a portion

48.7

must replace
a like

of

production--i.

exchanges

realize

SI.

concrete

come from

fund

circulation.

the

new fixed

PI cannot

of

satisfying

accumulated

entire

and accumulation

from

each have

this

the

realize

process

fd

fund

capital

each year

to reflect

product,

consumption

towards

can only

+ 610.2c_g)cons

fixed

out

renewal,

to

for

we set

and circulating

wears

have

the

purchased

PI and PIT

which

they

addition

its

of

PH

SII

capital

in

example

went

fixed

has changed.

uation

that

SI(v+s/x)

of
SII

of

ments

the

PI nor

neither

all

result

In

for

constant

be involved

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first.

its

of

+ 155.4s/x

+ 2045 consumption

us that

+ 191,9c_g)s/x

+ 310.7v

+ 1584(973.8c^p

+ 973.8c_p)c

scheme tells

departments

SI(v+s/x)

of

the

at

+ S17.9(101.4f_g

+ 16.2f_p

+ 356c. p)c

+ 1478.4c_p)c

1022. S(48.7f_g

PII.

+ 399.2c_p)c

+ 259(50.8f_g

capital;
+ 576c-g

1584(105.6f_g

PI.

four

+ 384c_g)v

3107.1 fixed
1242.8(310.7f_g

SII.

fixed

capital:
+ 1154.5c_g

in

32.5

the
of

culti-

SIv

consumption
the

present

and
that

-398P11's

example
ing

stock

transferred

fixed

of

fixed

capital

the

production

to

over

accumulation

SI(v+s/x)

152.2,

is

exchanged

The part

of

SIc(c)

to

to

capital

of

fraction
ing

of

that

has declined,
of

worry

exists

left

as fixed

amountit

with

no

that

of

capital,

deal

and we will

be-

is

there

What is

about.

it

some of

raw materials,

physically
SII,

with

with

in

moment.

Although

tention.

we must

view,
254.8,
that

department

are

indistinguishable

it

into

two distinct

its

means of

production

latter's

raw materials,

PI did

follow

not

The other

of

part

go to

which

will

fixed

capital
capital

tion,

and in

divisions

get

which

PI's

They

accumulation
in

role
SIc(c-p)

within

exchange
of

the

up fixed

of

process

for

the

to

144.4,

worth

production,

and add to

its
and

capital

constant

in

func-

their

two sub-

these

circulation

SIT when

purchase.

a compensating

the

as conceptually,

as well

economically,

are

are

sale

Thus we see that

PI.

These

exchange
for

which
SI(v+s/x);

above.

capital

against

SII,

of
to

equal

against

in

PI,

means of

of

used

fund

to

SI with

to

in

exchange
382-85,

point

One,

capital

became available

consists

replace

their

be sold

to

own sale

SIc(c-p)

fixed

some at-

a material

components.

through

and which

up its

from

on pages

were

PI deserves

within

of

directly

circulation

stock.

fixed

deficit

make up the

cannot

described
have
we

reproduced

they

divide

go to

will

is

that

discreet.
All
fixed

capital
that

ital,

needs

end falls

instead

conditions:

of
a)PI

around,

and b)PI

from

in

PI

unexpectedly--that

means--not

has risen

capital

fixed
from

this

of

on SII.

raw materials

of

254.8

so that
SII

As a result

254.8
less

and other

SIT
more
from

lacks

the

SI

in

means of

let

SIT
fixed

in

up only

than

the

production

deficit
fixed

cap-

under

two

other
than

capital
that

PII's

of

all

entire

254.8

can make this

from

demand for

total

we have

stands,

SI(v+s/x),

as before.

purchases
buys

As it

sharply.

come out

206,

the

way
SI buys

replace

-399-

SIc(c).

of

part

in

of production
thing

else

would

actually

not

solve

sale.

they

farms,

they

or becoming

out-dated,

intermediate
fixed

of

output

--and

be planned

poses

the

ital

and will

kinds

case they

could

is,

that

expanded

tremely

of
PI,

SIT

not

greater
of

capitalism,

under

take

must

this

place

presupcap-

and circulating

dealt

is

the

fact
the

that
present

economy had to
least

at
in

stagnation,

the
in

for

capital

before

this

with

here

after

to

feasibility

were possible,

fixed

up is

and no fixed

in
out

circuit

254.8

Otherwise

how we distribute

and PH

200.9

complex

must contain
PI.

of

only

deficit

this

fixed

utility

production

know that

important

for

means

of

over

they

and that

fact,

if

down its

place

We also

the

in

for

etc.,

loss

without

take

We have

254.8

superfluous

moment the

adjustments

bottleneck,

these

cut

of

Any-

and buildings

the

reserves

of

have

and switch

way,

What is

shortages

easily

period

constantly

after

occur

capital.

ploughs,

If

could

for

capacity.

rapid

fixed

means

the

a year,
of

process

reproduction.

that
is

there

of

a real

Regardless
remains

next

ample

below.

serious

after

SI

unsold

a purchase-without-

tractors,

of

socialism.
of

only

through

the

they

of

be stored

and turbulent

it

to

these

suffer

capital.

We ignore

productive

return

even if

in

pre-existence

could

much use.

perhaps

for--under

and excess

or

materials

a haphazard

in

though

SI

of

these

as machinery

and could

We know that

such shifts.

SII,

then

form

use

as a result

be of

not

durable

of production

the

physically

in

that

condition

problem.

around

exist

will

were

of

the

enterprises

manufacturing
state

have

lying

But unless

further

the

SI

production

means of

is

There

fixed
there
capital

together

all

of

of

SIc,

of

their

which

just

in

The only

involving

over

capital

would

455.8

be a mutual

be freed

for

sale

the

way to

with

it

own needs

exchange
to

the

between

make

an exSIc

departments,

its

fact

while

capital

possible

all

and above

fixed

brings

necessarily

exchanges

would

respective

require

SI(v+s/x).

demands,

and those
SI and

departments

-400that

produce
does

however,
fixed

means of

it

capital
exchange

mutual
in

tion

1.3

stock

43.1

that

to

in

fixed

if

SIc

means of

speak

the

about

fixed,

capital

production

its

it

can function

as fixed

own demand for

circulating

means.

capital

The value

It

terials.
modity

so that

All

we have

total

product

Under pure

it

with

I's

product

75% in
and c(c)
change,

that
in
in

This

favor

of

I's

II
total

to

With
of
298,

the

it

was under

II

to

each year

of

we see that,

rises

I,
to

the

after
share

29.5%.

fixed

I,

capital.

Contrast

in

capitalism.
the

solved

by

this,

of

was 25% and

of

c(f)

percentage

would

If

we take

the

from

de-

capital
capital

prob-

breakdown

the

this

fixed

of

capital

composition

transferring
of

that

capital

value

fixed

petty-com-

internally,

accumulation
of

production

the

the

fixed

strictly

25%

at

own raw ma-

to

capitalism

constant
to

corresponded

Its

stays

its

from

of

department

of

by any

and concrete

pure

capital

SIc

of

else,

share

that

we assumed
fixed

in

production

the

and circulating

department

product

this

decline

less

somewhere

share

departments.

capital
produce

compare

department

order.

scheme on page
partment

of

fixed

must

composition

a greater

does not

capital

when

can have these

three

other

its

remains

material

so that

the

can transfer

what

between

IIc.

now it

where

from

fund,
in

the

alters

sense

SI

re-

add to

production

way that

it

to

(remembering

a conditional

and circulating

do is

to

capitalism,

capital

if

produc-

capital,

and to

total

254.8

the

means of

PII,

This,

do go for

which

fixed

of

SI's

only

them from

lem of under-accumulation
shifting

the

constant

acquire

sector,

capital.
SI's

must

If

capital

But

these

from

in

replacement

and 75% respectively.

144.4

to

has been accumulated

is

fixed

of

stock

over

sector).

available

of

constant

taken

2071.4,

at

old

accumulation

peasant

stays

its

SII).

example,

In addition

have

must

which

of

present

SIc.

with

The latter

capital

the

on hand another

100 of

fixed

we can only

talking

PI.

story

have

also

replace

the

of

the

must
with

order

store

finish

not

(in

consumption

in

the

however,

value
with

the

-401-

did

duction

not

its

adjusted

There

the

peasant

tion

through

the

that

SI's

SI,

this

proceed

must

of

sector,

between

socialist

ty-commodity

on the

production

of

mean for

grow,

in

upon PI for
that

In
our

its

if

the

we see
to

sole

part
PI,

of

fix-

is

to

have dic-

and petty

state

the

within

prostate
on

capital,

and circulating

the

and PH

production

and,

over

of

reproduction

between

one hand,

fixed

moderniza-

reproduction

expanded

ac-

any capital

SII,

expanded

their
petty

that

both

its

period

the

state

is

the

of

problems

true

prim-

and pet-

Soviet

describes
this

of

con-

only

Soviet

geneco-

up.

of

dependence

mutual

departments
supplies

economy

in

Still,

specific

interdependence

both

assuming

outlines,

certain

now take

Soviet

scheme accurately

basic

from

a situation
This

that

the

accumulation?

we must

partments,

sumption

is

of

and SI's

labor

of

production

abstracts

We have

true

of

this

least

at

nomy that

is

The requirements

the

transfer

one department,

requirements,

division

gradual

even further,

rise

capital

them

sectors

it

erally;

Fixed

into

machinery,

the

without

of

means of

What would

ditions,

must

only

all

of

Now, in

'

the other.

itive

to

conform

specific

duction

S,

technical

smoothly.
a highly

tated

P to

comes from

each have different

ed capital

place

process

agricultural

capital

took

from

or

the

to

capital.

we take

where

it

that

32,5%.

to

pro-

production

fixed

of

rose

economy,

heavy

of

but

means of

product

in

petty

own production,

manufacture

KI's

is

fixed

of

that

product

in

latter

that

we assumed

and other

increased

the

acquisition

Once again,

social

its

raw materials

agriculture

production

from SIT to

in

a commodity-socialist

that

39%.

where

capital

to
the

of

of

our analysis
count

of

go over

share

capitalism,

fixed

use

output

KI to

permit

concrete

under

situation

is
of

of

production

the

not

state

to

the

hierarchy,

without

raw materials.
begins

between

sector
But
purchase

rely

de-

various

increasingly

when we made the

fixed

It

however.

capital

as-

from

-402a fundamental

we introduced

SI,

For

nomy.

brings

this

agriculture

peasant

the

of dependence

as when SI

petty-commodity

sector.

so as to

breadth
lating

fixed
own

of

production
on trade--the
in

markets

S, or

rely

To acquire

venture.

If

must

others.

This

the

demand greater

In VKA 22 Preobrazhensky

that,

if

it

not

than

reproduction

ticular
not

(given

social

relations)

keep pace

SIT

duction
celerating
ized

which

SII,

from

with

department

movement

agriculture.

in

its

hamper

would

the

without
I of

the

prior

state

mechanized,

clearly

the

power

on tech-

in

the

is

no one-time

with

each passing

the

to

continue

of

and sooner
precondition

is,

that

or
of

develop,

mode of

its
and

without

this

par-

PI could

means of

later,

the
of

conditions

growth.

acquisition
sector,

a tem-

I of

department

technology
of

year.

he stated

There

USSR.

a more backward

rate

now,

production

had different

of

coun-

was actually

i, e.,

its

of

certain

its

there

level
its

vital

into

represented

existing

find

sector

was to

however,
it

that

labor

based

not

a dependence

all

base,

raw materials

towards
Quite

in

sell

state

that

sector

state

department,

This

the

quantities

concluded

the

of
its

outstrip

sector,

production,

II

of

capital

reproduction

expanded

department

could

peasant

to

to

its

of

is

lab-

of

character

P must

organization

some fixed

the

its

produce

own implements

that

above

circu-

own existence

industry

organs

from

and other

on state
not

is

capital

its

the

its

extend

its

not,

transforms

certainly

in

raw materials

PI can never

replace

dependence
is

fixed

inevitably

sequence

to

does

of

same kind

the

not

eco-

part

can eventually

true.

not

on state

P introduces

poral

is

it

trading

recast

will

tryside.

it

if

entire

on the

is

their

the

own raw materials

this

Its
thing

crucial

which

nique,

fact,

roots.

and purchase

products

In

industry,

state

its

to

economy

Once P starts

capital.
those

or with

of

This
find

to

its

most

The reverse

be threatened.

will

The state

capital.

dependence

sector.

have

SII

into

change

a growing
state

or

provide

constant

it

with

upon

structural

proan ac-

collectivdevelopment

-403is

the

primary

For

the

purposes

in PI

expansion

of

state

production

of means of

produc-

accumulation

and

tion.

for

production
its

replace

in

that

mind

but

of machines,

solely

from
seeds

require

no new outlays

of this

knowledge

habits

of

affect

the

raise

is

product

ital,

55.5

with

to

its

fund

SIIv.

In P, we assume

and that

through

divides

How this

ments.
kinds

it

of

means of
(4)

259,

all,

to

so that

it

new "capital"

short

production

is

393,

Our total

easily

SI's

sur-

fixed

cap-

of
its

and 18.5

to

SII,

SIv.

111 to

as follows:

and 11.1

capital,
by five

grows

they

run.

add 185 to

constant

break

them,

part

accumulated

and

and,

agriculture

in

it

farms

can deeply

reflect

divide

to

intervention
their

possibly
the

per

to

cent,

of

the

two depart-

up between

the

different

the

size

calculated
is
scheme

then:

from

dissemination

the

to

also
that

cultivation

reorganize

will

are

political

applied

production

will

and improved

rather

capital,

will

total

consist

The latter

is

sector,

circulating

that

to

the

155.4,

use does not

of

and the

production

up proportionally

on page

but

cannot

constant

is

33.3

capital,

of

state

circulating

whose accumulation
new fixed

level

to

equal

at

it
when

There

methods

peasantry

schemes

the

the

human labor

which

the

in

new techniques,

apply

reproduction

Beginning
plus

in

manner

greatly

will

the

into

SI,

to

unrealistic

fertilizers

agronomists

encourage

and to

work,

the

although

by trained

to

cadre

of party

capital

not

laboratories.

agricultural

of

is

P puts

include

improvements

elementary

number of

or

ones from

modern
This

capital
also

will

farms

state

fixed

the

as P begins

us say that

with

by five.

but

us take

now let

tools

more primitive
cent,

let

Only

year.

by two per

grows not
keep
we

another

own,

illustration,

of

equations

(1)

-404-

SI.

SII.

PI.

5363,6 fixed
2145.5(536.4f

capital:
+ 1609.1c)c

3218.1 fixed
1287,2(321.8f

capital:
+ 96S. 4c)c

1096.9 fixed
1645.5(109.7f

capital:
+ 1535.8c)c

508.2 fixed
1066.8(50.8f

PII.

Total
SI(v+s/x)

means of

is

the

PI must

PII.
duction
48.7

only

PII,
if

it

this
to

part

duction,

it

in

This

In

terms

PIIc(c)--can

of
cover

to

the picture

the
is

sector

is

to

production

the

a minor

quite

of

fixed

the

its

leave

aside

final

the

of

fund

Once again
larger

PI and

year's

pro-

has to

in

into

from

replace
via

time

other

ex-

being.

it

capital

needs
words

and so we have
means of pro-

of

is

629.5

point

P to

within
of

portion

of

We

I of
its

PI's

raise

use values

of

view

department

more than

in fact).

(96.5%,

production

From the

take

652.5.

to

shortage

of

also

the

same value;

consumption
SI's

582.5.

capital

for

deficit

shortage

of

last

fixed

general

an even

demand for

PH

70 fixed

the

acquire

of

total

from

capital

that

1242,8

production

PI obtains

SI's

different.
devote

means of

for

level.

= 3200.4

in means

we must

against

of

= 3291

144.3

a deficit

Likewise,

reordering

to

is

SI(v+s/x)

all

requisite

obliged

To calculate

nearly

makes SII's

directly

PI--whose

values

entire

year.

coming

total

the

its

replace

up fixed

consumption

figure

brings

need only

surplus

our

fund

capital,

particular
used

exchanges

consumption

There

fixed

of

the

fund

consumption

and add another

1387.1.

can only

means of
PIIc

must

This

and so we can
hand,

other

of

include

would

for

SIc,

can sell

before

and add 21.3.

capital

on the

year

105.6

+ 160,9s(a)

6491.4
SII

these

replace

change against

P=

supplier

and add 40.6

fixed

+ 2133.6

+ 268.2s(a)

+ 160.9s/x

+ 1645.5

while

to

equal

+ 268,2s/x

+ 321.8v

accumulation.

demand for

the

account

the

through

production

SI

Since

804.6,

from

capital

of production

in

production

comes to

constant

capital:
+ 1016c)c

+ 536.4v

the

working

state
year

capital.
arrangement

of

production

in

P we adjust

-405-

(S)

equations

in

accumulation

year's
p,

(8)

through

PI's

production

of means of
in
added

PI

(6')

PH

which

we get

(7')

(1.5x

PIIc(c)

must

S plus

fixed

the

per

cent

capital

in

growth

internal

the

equal

by another

deficit

replaced

and

+ 1.4(x
+ 2(x'

+ 486.9)

+ 1584.5)

(2x'

= 2(1. Sx + 1584.5)

+ 486.9)]

+ (2x'

+ 48.7)

1x'

+ 1056.3)]

+ 973.8)]

= 582.5

+ 973.8)

+ 48.7

+ x'

gives

which

As total

year

previous

per
for

So we have

311.8.

to

equal

a new product

yield

would

the

five
a

was 6235.5,

(8')

equation
(8')

= 311.8

+ 7.2x'

3.9x
for

solving

P from

in

production

growth

= 20.5

3x'
-

1.5x

(7-a')

cent

five

corresponding

+ 1056.3)

= 3[. 1(x'
= 3[(.

from

imposed

conditions

we have:

= 2[. l(x

(S')

less

within

Thus

PII.

the

S and the

fund

consumption

fit

to

we find

x and x'

that

48.1

x=

and x'

= 17.2,

P is

so that

then:
PI.

PII.

1104.4 fixed
1656(110.4f

capital:
+ 1545.6c)c

504.1 fixed
1058.4(50.4f

capital:
+ 1008c)c

Total
This

shift

in PI to
tion

rise

it,

In order

to

follow

scheme down into

in

has dropped
the

the
its

course

various

to

does

with

not

PI has caused

pass

parts.

the
that

capital

exchange

material

to

by just

fall

comparison

of

3312

3175.2
=

fund

consumption

PH

from
PIT

value

6487.2

fixed

extra

and whose full

stock,

P=

in

by 21 and that

due to

+ 2116.8

resources

productive

as a whole

arranging
its

of

in

production

fund

+ 1656 consumption

into

we must

25.

over

production
Produc-

before

figures

PI has had to
the

annual

break

the

readd to

product.
total

-406214S. S(536.4f_g

SI,

+ 393.2c_g)v

+43,9f_p

1287.2(321.8f_g

SII.
PI.
PII,

which

is

PII's

entire

1058.4(50.4f_g

+ 1008c_p)c

first,

fixed

capital

PI in

turn

alized

via

of this
the

for
in

of

sale

to

to

ceeds

the

and with
form part
turn

of

out

153.7

fixed

sion),

for
brings

804.6,

which

fixed

capital

272.8

fixed

fixed

of

PI sells

SIT

to

expanded

the

fixed

is

it

buys
renewal

capital

the

purchase

must

sell

capital

our

a like

a bit

easier.
capital

in

If

sector.

state

272.3,

means of

or virtually

number
of

SIc

48.1

for

raw materials
to

that

fund.

itself

426.5.

SI,

to

etc.,

capital

PI must

of

pro-

consumption

fixed

stock,

375.7

Circulation

over.

PI.

must be re-

which

and accumulation
of

and

must now come from

fund

the

Thus

raw materials

raw materials,

the

con-

SIIc(c).

reproduce

then

existing

component

change

scheme on page 404,

the

Finally,

reproduction.
worn

rest

does not

circulating

left

own

whole

is

that

in

PII's

and 589.7

the

fund.

its

cover

fixed

SIIc(c),

272.3

these

(105.6

which

of

to

is

to

in

we let

148.9

consumption

capital,

receives

fixed

it

rest

because

exposition

capital

its

648 of

SII,

consumption

off

and 375,7

capital

two departments

the

capital

and 965.4

constant

aside

PII,

to

fund

allowing

right

as we know from

SII,

SHIIs

permits

to carry

its

going

is

fd

cons

with

SI's

but

possible,

of

+ 648c_g)

be disposed

and makes

SII.

money it

of

problem

make up the

as before.

come out

be disposed

capital

shortage

This

of

+ 160.9s/x

exchange

before.

probably

extent

+ 321.8v

for

+ 196.5c_g)s/x

consumption

to

circulating
set

+ 2116.8

capital

the

+ 22f_p

+ 1656(1008c_p

year

would

+ 436.4(99.3f_g

+ 375.7c_p)c

available

the

totals

of

has

goes

entire

the

fixed

has a deficit
forms

to

SI(v+s/x)

421.7

other

sector

least

of

65.9

requires

This

state

requirement

capital

stant

in

fixed

at

In any case,

it

demand for

essentials

SII,

capital
than

the

needs

fixed
lower

actually

In reality

for

+ 589.7c_g
+ 1545.6c_p)c

148.9

+ 426. Sc_p)c

+ 268.2(49.6f_g

1656(110.4f_g

has

SI(v+s/x)

the

+ 1182.6c_g

This
it

needs

obtain
its
to

expanSI.

-407Once again,
has risen,

SIs(a)]

had stayed

ital

This

different

all

a form

in

exist

SIT

raw materials

sell

must
SI's

atively
basic

condition

of

as the

it

agricultural

from

the

circulating

essary

to

alleviate
surplus
pace with
continually

some of

the

production,
the

demands

transform

fixed

the

its

be sold

fixed

capital

the
in

which
SII.

to

That

must relis

This

rise,

the
eco-

to

increasing

not

its

production

over

the
base.

state

thus

have

still

would
this
to

sufficient

No matter

ac-

This

abroad.

sector,

nec-

excess

currency

PI must
rate

the

PI's

acquired

the

in

or

enough,

foreign

all.

in

of

supply

shift

capital

and at

re-

depart-

the

fixed

this

grow at

instance,

could

and used

to

for

have

technological

from

obtain
SI,

PI Is

If,

capital

accumulation

Some of

back

sector

fast

do this,

does

1920's.

able

but

PI's

a commodity-socialist

industry.

of

to

PII,

capital

must

in

for

to

constant

values

able

SII.

must

the

Only

cannot

a constantly

state

elements

problem,

of

to

was not

and to

it

accel-

economy

of

produce

for

petty-commodity

export

these

must

capital

the

state

to

for

purchase

in

access

from

then

it

of

fixed

of

the

have

capital

production

production.

reproduction

sector

proportions,

means of
quired

I of

state

of

own circulating

Union

machinery

ment I of

means

however,

output

Soviet

must

quantitatively

cap-

sector

terms

an

20.

the

is

suitable

amount

peasant

in

fixed
of

technique,

to make up what

need

its

the

of

as steep

of

PI

what

entirely

expanded

For department
rate

is

of

and its

quired

that

above

an equivalent

fall,

nomy such

and

not

been a shortage

growth

of

is

proportion

agricultural

deficit

over

will

production

have

[excluding

product

this

self-sufficient

The remainder,

sector.

state

of

the

departments.

SII's

of

if

that

as the

SI's

Although

would

increasingly

production,

surplus

is,

same there

in

capital

39.9%.

enough

modernization

the

nearly

is

shows that

becomes

by

produced

fixed

of

39% to

it

the

the

as a whole

turn

from

example

with

erates

cover

share

as before,

increase

not

the

it

keep

has to

how we approach

-408the
entire
fixed

problem
process
capital

we cannot
of
and

escape

economic
the

prior

the

that

conclusion

development
expansion

in
of

the
state

the

lynch

USSR is
production

the

pin

of

abundance
of

means

the
of
of

production.

NOTES TO CHAPTER 13
1.

describe
For the sake of clarity,
let us quickly
how circulation
SI has a balanced
exchange with PII,
would take place.
as well
It has a deficit
of fixed
as with SIIc(c).
capital
with SII =
it immediately
254.8.
Imagine
144.4 with PI to
that
exchanges
fixed
This leaves,
requirements.
cover the latter's
capital
out
for exchange
of the total
means of production
worth 399.2 destined
These exchange exactly
as in our previous
example.
with PI, 254.8.
from PI.
PI effects
SI buys this
an
much additional
raw materials
(= 356) with SII.
It takes the 254.8 in money reequal exchange
from SI and buys an additional,
equal amount of means of
ceived
fund.
SI,
from SII,
to cover its
entire
consumption
consumption
for sale due to the imbalas we know, had these 254.8 available
deficit
in fixed
caporiginal
exchange with SI (its
ance in its
ital).
Thus SII takes the money--initially
advanced by SI-I-and
from
SI,
latter
fixed
it
the
the
which
needs
capital
purchases
for sale to PI, but which PI did not need, and hence
had produced
did not purchase.

-409-

CONCLUSION

At

the

considered

close
the

not

see these

but

rather

in

primary

the

as simply

of

all

the transition

of

in

contradictions
conclusions
final

as Preobrazhensky's

light

the

VKA 22 Preobrazhensky

of

his

previous

gave

a summary of

the

Soviet

drawn

from

this

of

the

assessment
analysis

of

We should

system.

the

single

article,
of USSR

state

various

he

what

aspects

of

period.

We have only to present

the very broadest
outlines
of the foundain the economic system of the USSR in
tions
of dynamic
equilibrium
to show the totality
order
of economic and social
contradictions
by our development
towards socialism
that
are inevitably
revealed
of our isolation.
under the conditions
based on non-equivalent
exchange
this
non-equivalence--together
in time.
of these processes

Accumulation
of eliminating
correspondence
Accumulation
the
versus

at the expense
inevitability
of

the necessity
versus
with the lack of

product
of the surplus
growth of
a systematic

of the
wages.

workers

in the interests
the "birth
pains of
The necessity,
of reducing
into
integration
the
industrialization,
" of the fastest
possible
foreign
in
increase
division
labor
versus
credit
an
of
and
world
by
USSR
the entire
hostility
the
capitowards
the growing
shown
talist
world.
Accumulation
materials
stimulating
as possible.

industrial
raw
produce
who
at the expense of peasants
the
in
of
necessity
the
versus
general
peasantry
and of
as
much
these
materials
raw
of
reproduction
expanded

conof
articles
of
Accumulation
exports
the
peasant
of
at
expense
these
under
exports
the
stimulating
of
necessity
sumption
versus
industrial
prices.
of
reduction
slow
conditions
of an extremely
more
produce
having
the
economy
peasant
The economic necessity
of
maintainof materially
for the market versus
the social
necessity
for
the
least
market-ing the part
that
produces
the
peasantry
of
the
countryside.
of
the
groups
the
weak
and
namely
poor peasants
The necessity
of
tion
of production
Aside
in
the
ing

from

the

course

transition
at

the

lowering
versus

Preobrazhensky

contradictions
of

our

period

two different

analysis,
in

the
basis
rationalizathe
of
on
prices
with growing unemployment.
the struggle

the

levels.

uncovered
USSR, which
First,

enumerates

further

here,

those

within

contradictions

distinguish
can
we

we have

we have,

tendencies

as operatat

work

-410the

within

process

1.

Because

all
labor

with

years

in

in

to

expanded

fixed

the

fairly

totally

one-way
and labor

not
isting

from

power,
for

to circulation

just

of

withdrawal

of
to

new plant

means of

the

out

fixed

and above

as Preobrazhensky

described

the

to

of

fixed

come.

capital

and equipment,

production

which

War,

had

to

to

of

Union

when the

into

the

fixed

of

its

was complete,
of

from

necessitated

way beyond

back

the
it

since
renewal

of

in

the

production

values

of

now

were now

capital

means of

its

temporal

whole

it,

be replaced

on

operation,

additions

went

at

concentrated

the

construction,
but

it

back

any return
This

serious

normal

both

without

economy

Civil

period

of

over

resources,

replace-

reconstruction

blocks

Entire

productive

Soviet

capital,

must

threat

the

transition
the

of

rate

replenishment

major

run.

on the

product

cause

where

undertake

and worn

some time

gestation

of

phase

replacement,

This,

accumulation.

the

short

the moment.

the

and equipment

and without

was disrupted.

demanding

situation

plant

had to

in

after

the

either

sector

the

at

will

restoration,

of

rapidly

economy

it

with

noted,

period

amortized

proportionality
used up,

bringing

Once this

and the

departments

the

state

social

in

several

depend

just

the

of

variation

already

in

elements

Any major
any of

department
not

social

for

the

material
parts

abandoned

stocks.

however,

its

of

I of

does

What was the

its

that

component

process,

As we have

grow

capital

problem

in

capital

previously

could

almost

time.

moved from

bringing

these

stagnation.

time?

country

it

in

in

disruptions

this

its

be replaced

must

capital

department

reproduction

between
of

correspond

crisis

in

process

investment

fixed

this

in

under-production

capital

a great

accumulation

proportionality

or

requires

future,

leads

ment of

this

from

The reproduction
also

that

affect

fixed

country's

production

We know that
proper

and which

no ensuing
the

actually

the

so much of

and because

once,

at

accumulation

dimensions.

general

most

of

in-

normal

applied
already-exhere

and now,

-411-

lest

be a total

there
Taking

our

scheme the

state

5000 to

4000.

creased

the

of

could

Chapter

9,

into

capital

and tear

of

fund

in

imagine

in

argued

the

state

that

this

fixed

have

would

absorb

In our

1000 in

placed

in,

say,

out

the

250 accumulation

fund

200 right

away,

of

we must withdraw
This

place.
culating

leaves

being

776.9,

it

would

would

make itself

felt

exchange

production
2.
goods

Soviet

by this

famine

department
II.

All

both

in

example,

of

instance,
both

as Preo-

accumulation
we could

easily

must be re-

200 per

year.

the

Thus,

state

sector,

accumulation

takes

fixed

to
in SI.

capital

and cir-

Instead

instead

1510,7;

SI's

wear

capital

I of

only

of

the

of

The deficit

terms

for

all

normal

could,

additions

variable
total

the

reserves

depleted

this

to

any other

normal

755.4,

as drawing

of

SI(v+s/x)

of

of means of production

exchange

now be 386.7,

would

be short

together--would

and its

SII,

with

so that
means of

amount.

of

is

I of

be only

probably

in

other

fact

state

that
sector

conditions

the

means of

phenomenon

the

the

I of

department

state-produced

One economic
economy

the

would

SIc(c-p),

Accumulation

reason.

ment

PI.

PI or SII--and

either

the

with

it

1553.6,

as we

department

before

and to

capital,

equalling

in

in-

This,

This

rate

it

existed.

fixed

the

at

if

supplies

hypothetical

e.,

50 for

only

constant

SIc(c)

years--i.

from

ample

addition

totally-consumed

level

some point

virtually

initial

provided

depreciation.

year's

sector.

in

our

capital

old

same effect

Now, at

be replaced,

VKA 22,

five

capital,

the

fixed

the

at

in

that

of

capital

production.
must

stock

circulating

any particular

brazhensky

its

suppose

production

its

of

and other

13,

deplete

maintain

amortization

and equipment

plant

Chapter

had had to

raw materials

fixed

from

example

It

have shown in
of

collapse.

that
the
is

being

organic
actually
equal,

for

production

expresses

the

this

another

backwardness

composition
lower

exacerbates

sector

state

than
would

of

the

of

capital

in

that

in depart-

produce

a ten-

-412-

dency

towards

isting

shortage

by the
in

ent

tal,

which

at

lead

will

the

state

All

a severe

already

transfer

rise

to

in

the

forces

is

of

mom-

SI automat-

of

of

capi-

in department
of

an economy

means of

on it

the

of

composition

deficit

difficult

extremely

department,

an artifact

means of

I from

producis

there

where

production,

department

into

ex-

demands placed

organic

in

place

shortage

productive

by that

"over-accumulation"

take

will

the

given

The growth

and a corresponding

structural

of

is

analysis.

a relative

this

which,

the

up with

however,

a rapid

departments

and other

This,

I,

produced

catch

our

sector,

SI.

to

we began
it

with

department

production

it

time

from

tion

and where
other
in

and produces

sectors
its

turn

dislocations.

further
3.

Regardless

duction

in

exists

could

still

take

place

in

form,

physical

the

proper

ability

with
0

SH

to
(or
it

production
production

to

available

SII.

still
In

difficult

for

causing

PH

boycott

of

Yet
the

Soviet

the

fact

the
PH

to
the

go over

the

in

internal

natura

does not
of

all

hoard

exchange

purchase
state

via
the

means of

made its

means of
ex-

non-equivalent
its

by affecting

difficulties

its

sector

by reducing

credit,

non-equivalent

overcome
to

if

through

cheaply

same way,
to

Even

PI great

cause

exchange

makes it

exchange

imbalance

of

consumption

its

exchange

extremely

products

SII,

with

and a

market.

non-equivalent
system,
that

PI

SI.

pro-

situation

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use to

then

peasant

departments

monetary

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circulation

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aggravates

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from

requires

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exchange
the

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products

proportions

famine

goods

department

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accumulate

PII),

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or not

whether

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PI's

change

of

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suffer

sectors.

with

for

as a whole.

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of

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means of

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brings

ically

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mean a tendency

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in

over-accumulation

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exchange

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production

a sine
role

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for
qua non
highly

demanded

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contradictory.

by the

of

survival

peasant

Given
sector

-413do not

genuinely
of

SI,

and thereby

ply

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retarding
from

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in most

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the

point

need

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exchange

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sector,
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put,

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ing

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must

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per

output

of

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stressed
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the

sector,

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sector
is

relations,

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in

the

of

SI

in

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must

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to

se and from

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runs

for

supply
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state
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in

that

fund.

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SH

dur-

and

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needs

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to

from

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to

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cultivation

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to

raw materials,
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line

suppress

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is

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vehicle

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of

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peasant

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the groundwork

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productive

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our previous

down peasant

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sector.

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addition

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sector.

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be an everthe

peasant

supplants

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In the examples we used in the preceding

what would happen if,

assuming these

chapter,

of

we see readily

based
on non-equivaare
schemes

-414-

lent

exchange,

both

SI

and SII,

would

ance,

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dustrial

suddenly

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allow

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only

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in

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filled

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4.

the

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sumption.
production

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on the
its
tend

These

tions,

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four

points

historical
depleted
and the

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by the

capital

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the
down.
to

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production,

if

Or,

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fixed

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constraints
plant
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sector
for

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sector's

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specific
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terms

concrete

backwardness:

peasant

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famine.

in

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commodi-

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and the

Union's

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general

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means of

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backward

between

predominance

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on

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deficit

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and the

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accumulation

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of

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means of

share

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demand
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of

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reduction

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tasks

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fixed

shortage

constitute

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In Chapter
of

break

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material

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ty-socialist

would

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demand first

To do this,

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of

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persist.

One of

product

supply

scheme on page 406,

production,

department

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the

raw materials

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prices

the

of

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tal

suffer

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in-

-415dustrial

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of

partments
sector

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sector

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must

than

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for

expanded

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tion--and

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to

simple

one another,

of

If

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fixed

and PI

cannot

or declining
the

will

is

so that

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meet
will
either

the

mere

fall

short

slow

down markedly

as

What is

more,

what

of

balance--

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latter

This

of

existence

fixed

demand for

reverse

premise

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of

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exchanges

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contradicts

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tight

amount

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famine.

a relatively
correct

SI and PI,

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reproduction

We see that

SI

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produce

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all

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purchase

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industrial

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them.

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industrially

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ences must

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age of

sector

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ed only

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ant

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demands more means of

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conditions

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exchange,

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a shortage

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state-

-416means of

produced
change

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it

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the

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2)With
than

it

tion

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sells
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fixed

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icit

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the

italism--namely
II

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tor.

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different

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tion,
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back

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show,

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basic

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take

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place

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economy--only

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and the

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real

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The fact

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domination,

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in means of

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in

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production

colonial

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still

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disfigurement

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mirrors

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of means of production,

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symmetry

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1)With

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primarily

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sector

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-417the

countryside

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is

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"normal"

state

important:
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tion
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If
SI,

ment

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society,

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production
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obtain

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capital

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of

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PI

nor

constant

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of

Therefore,

SII

means

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production

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of

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means

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expense

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sector's
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the

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But

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II").

production,

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would

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In

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repeatedly,

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would

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("Eco-

Zametki

two possible

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In

state's

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value.

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demand on the

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There

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Preobrazhen-

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-418Revolution

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which
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iate

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On the

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scheme)

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italism.

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ing

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minerals,
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only

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capital

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share

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1920's,

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ments.

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one Preobrazhensky

How?

remains:

if

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solution,

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state

-419department

to

sector

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production

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means of

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process
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backwardness
expanded
of

supplies

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for

within

contradiction

portion

of

ital).

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society's

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dition

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opment of

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proportionality

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undertaken

terms

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indicates

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must

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and
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The extension

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solution

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agriculture,

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icies

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part

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agriculture

reproduction.

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capitalism

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tions,

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out

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production

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smoothing

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demands of
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necessary
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tor,

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ly

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Soviet

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of

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Union

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of

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secbut

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all

-420Our analysis

accumulation.
in

Soviet

the

simultaneously

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credits

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primitive
political.

Yet

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of

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Thus

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in

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ecoform,
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prices.

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we said

must

to

goods

production

--peasant
imally

the

There
they

market

of

department
exchangeable

foreign

one of

even here

lever

ostensible

world

this

can-

in both

sector's

fund,

the

sector

production

acquired

with

reproduction

state

unsaleable

export

Here
that

noted

the

were

considered

the

peasant

state

accumulation.

economy made this

in the

the

expanded

means of

if

be imported

could

of
I of

and the

sector

means for

Preobrazhensky
socialist

of

that

petty-commodity

production

acquired.

II

we had concluded

Previously

means of

a shortage

department

sector's

conditions

department

shows that

economy

not

the

of

the

in

the

poverty

and in

the

particularly
the

present

means of

Soviet

future.

essential

production

raw materials

of

during

economy requires

to

subsequent
a radical

421-

rearrangement
weight

specific

for

Although
it

es,

development
quate

What is

the

of

is

needed

order.
We have

shown that

value

extending

sufficient

reserves

dustrialization
and sharpen

simple

to

Soviet

the

of

not

in

material

of

drift

the

within

in

the

society

the

law of

The demands of
goods

famine.
over

into

this

detriment

the

to

1927.

perpet-

and uncertainty

deeper
economy
it

first

from
of

between

that

reality

the

of

the

itself

accumulation.

of

market.

of

nature

in

the
ade-

own conclusion

contradictory

A policy

A pol-

itself

world

problem

fixed

of

assistance

extract

cannot

the

drive

the

through-

for

and of

the

socialist

conflicts

class

is

embodied

contradict

only

precondition

to

the

place.

the

is apolitical

Union

take

is

access

into

resources

to

Preobrazhensky's

primitive

would
the

is

This

be reconciled.

two cannot

it

but

contradiction

reproduction

transfers

and simple,

because

law of

and the

not

these

allow

sector,

back

the

economy--a

expanded

disruptions

pure

thrown

crisis

economic

and the

severe

countries.

We are

ual

I without

are

the

of

enough

there

forc-

productive

departments

other

Introduc-

ones.

transfer

Nor

aid,

the

of

the

our

as economic

rearrangement

accumulation

task.

in

as we showed

to

to

state

the

meet

this

increase

to

order

as well

because

poor

socialist

socialist

other

both

too

capital

primitive

to

reasons,

and because

economy,

of

This,

department

and circulating
icy

industry.

it,

achieve

sector's
the

out

capital,

may need

themselves

economy are
state

state

in

social

political

the

cannot

total

heavy

of

was true

tion,

the

of

of

The
in-

dead end
the

proletariat.

The victory
would
of

not

its

itself

impasse.

country's
intimated,
fines

in

of

of the Left
have
It

difficulties,
the
the

but

solution

USSR.

Opposition

been

was the

in the struggle
to bring

sufficient

necessary
it

condition

was not

was also

Preobrazhensky

the

political,
wrote:

the
for

but
"The

it

lay

sum of

Stalin
Union

Soviet

a solution
itself.

answer

against

to

out
the

As we have
outside
these

the

con-

contradic-

-422shows how closely

tions

the

with

necessity

political

but

on the

material

that

Today

disaster.

in many circles
in

to

by which
It

is

that

be equated
is
it

it

with

has

into

from

time

been done

we must

the

to
are

of

struggles

of

part
if

was then

history

the

we are

to

has come

argument

against

Politics

and as an acti1920's.

the
is

This

that

for

question.

be rediscovered,

time

task

thinker

weapons.

understand

a living

and the

as a technical

future

one country

Socialism

problem.

was as a political

entered

in

socialism

was a presecription

economics,

seen

the

presupposed

Preobrazhensky's
theory

for

only

"3

It
of

a different

remain--political

a history

and turn

have

Yet

must

this

the

in

relying

significant.

connected

not

countries.

impossibility

economically

one country

were--and

and of

socialist
is

is

socialism
isolation,

socialist

among Marxists.

Preobrazhensky

that

other

the

Marxists

has been forgotten.

Marxism

for

towards

reasons,

sentence

understood

to demonstrate

socialism

of

this

reasons

were already

our

economic

resources

the political

ideas

for

of

development

breaching

of

also

The syntax

vist

our

Economic

a principle

of

and the

processes

of

revitalize

our

movement.
socialism

reality.

NOTES TO CONCLUSION
1.

VKA 22,

2.

"Ekonomicheskie
Zametki
6, March 31,1926,
pp.

("Economic
II"
60-61.

3.

VKA 22,

p.

p.

p.

70 (Spulber,

70 (Spulber,

pp.

172-73).

173).

Notes

II"),

Bolshevik,

No.

-423BIBLIOGRAPHY

The Bibliography
is divided
into two parts.
This first
lists
all major
that
works by Preobrazhensky
in Western libraries.
we know to exist
Those of Preobrazhensky's
writings
not actually
in the prepconsulted
thesis
of this
aration
are noted by an asterisk
(*).
So far as we know,
list
no exhaustive
of Preobrazhensky's
in any of the
writings
exists
sources dealing
is the first
with this
period,
this
so that
BibliograWe hope it will
phy of his works to be compiled.
to others
prove useful
doing research
in the Soviet
twenties.
The second section
includes
all
(except
those by Preobrazhensky)
in the Notes or whose
sources
cited
to the preparation
contributed
use directly
of the research
that went
into the thesis.
References
of a secondary
nature,
e. g., those used to
historical
facts,
certain
verify
or whose subject
matter
proved only tanto our topic,
related
gentially
are not included.

WORKS BY PREOBRAZHENSKY

Anarkhizm

London:

Communism.

The ABC of
i

Moscow:

Kommunizm.

Den'gi
Bumazhnye
1921.

Penguin,

(see

Gosudarstvennoe

Proletarskoi

v Epokhu

1969

also,

Bukharin,

Izdatel'stvo,

1921.

Tiflis:

Diktatury.

Gos.

Politika
Proletariata
Strane"
"Ekonomicheskaya
v Krest'yanskoi
in a Peasant Country"),
Economic Policy
of the Proletariat
No. 25 (Nov. 1922).
Internatsional,
munistichesky
Krizisy
Ekonomicheskie
Akademii,
cheskoi

pri NEP'e.
1924.

"Ekonomicheskie
Zametki
the Goods Famine"),

I--O Tovarnom Golode"

15 December
Pravda,

"Ekonomicheskie

II,

Zametki

" Bolshevik,

No.

Izdat.:

("The
Kom-

Sotsialisti-

Izdatellstvo

Moscow:

N. ).

("Economic
1925.

Notes

6 (31 March

1926).

I--On

SovetIzucheniya
Pol'ze
Teoreticheskogo
"Ekonomicheskie
III--O
Zametki
Advantage
("Economic
III--On
the
Notes
of a
Khozyaystva"
skogo
No. 15-16
Economy"),
Study of the Soviet
Bo1'shevik,
Theoretical
(Aug. 31,1926).
Ekonomika i Finansy
munistichesko'i
Finansy

i Novaya

Sovremennoi
Frantsii.
1926.
Akademii,

Ekonomicheskaya

Finansy
v Epokhu Diktatury
Finansov,
1921.
From NEP To Socialism,
lications,
1973.
*Itogi

trans.

Politika.

Proletariata.

by Brian

Moscow:

Moscow:
Moscow:

Pearce.

Kom-

Izdatel'stvo

Izdat.,

Gos.
Narodniy

London:

1921.

Komissariat

New Park

Evropy
Perspektivy
Genuezskoi
i Khozyaystvennie
Konferentsii
Perspectives
Results
Economic
the
of the Genoa Conference
and
Moscow:
Europe).
1922.
Gos.
Izdat.,

Pub-

(The
for

-424"Khozyaystvennoe
the System
22 (1927),

Ravnovesie
v Sisteme
of the USSR, " Vestnik

"Khozyaystvennoe
Ravnovesie
("Economic
Equilibrium
of the USSR, " Vestnik

SSSR"

("Economic
Kommunisticheskoi

Konkretnom
pri
Under Concrete
Kommunisticheskoi

Equilibrium
Akademii,

Kapitalizme
Capitalism
Akademii,

in
No,

iv

Sisteme SSSR"
and in the System
No, 18 (1926).

*Krest'yanskaya

Rossiya
i Sotsializm
(k Peresmotru
Nashei
Agrarnoi
[Peasant
grammy)
Russia
and Socialism
(Towards
a Reconsideration
Petrograd:
Program)].
of Our Agrarian
Priboi.,
1918.

The New Economics,

Press,
1965.
Novaya

trans.

by Brian

Pearce.

Ekonomika.
Opyt
Teoreticheskogo
(The New Economics.
An Attempt
Soviet
Economy),
second
edition.
Akademii,
1926.
cheskoi

*Nuzhna

1i

sary?
itet,

Khlebnaya
Monopoliya?
).
Moscow:
Vserossissky
1918.

(Is

London:

Oxford

Pro-

University

Analiza
Sovetskogo
Khozyaystva
at a Theoretical
Analysis
of the
Moscow:
Izdatel'stvo
Kommunisti-

the Grain
Tsentral'niy

"0 Dvukh Spornykh Voprosakh

Marksovoi
Teorii
Questions
in Marx's
Theory of Money"),
1930.
gel'sa,

Monopoly
Really
Dopolnitel'niy

Deneg"
Arkhiv

NecesKom-

("On Two Contentious

K. Marksa i F. En-

*0 Krest'yanskikh

(Razgovor
Kommunakh
Kommunista-Bol'shevika
s Krest'[On the Peasant
Communes (A Conversation
yaninom)
of a CommunistKiev:
Narodniy
Komissariat
Bolshevik
With a Peasant)].
po Voen1919.
nym Delam Ukrainy,

*0 Material'noi
Material

Baze Kultury
Basis
of Culture

"0 Metodologii
odology
Plan").
lished.
0 Morali

Obshchestve
v Sotsialisticheskom
in Socialist
Moscow:
Society).

(On the
1923.

("On the Methi Vtoroi

Sostavleniya
Genpiana
Pyatiletki"
Plan and the Second Five-Year
of Drawing Up the General
in 1931, but never pubSubmitted
to Problemy
Ekonomiki
G. K., etc.
Several
passages
are quoted in Roginsky,

Klassovykh

Normakh.

Moscow:

Gos.

Ot NEP'a k Sotsializmu:
Vzglyad
v Budushchee
To Socialism:
the Future
A Glimpse
Into
Moscow:
Moskovsky
1922.
Rabochy,

"Perspektivy
Novoi Ekonomicheskoi
Economic Policy"),
Krasnaya

Politiki"
No.
Nov',

1923.

Izdat.,
i
Rossii
of Russia

Evropy

("The outlook
3 (Sept. -Oct.

Prichiny
(The Reasons
Padeniya
Kursa Nashego Rublya
Narodniy
Exchange Rate of Our Ruble).
Moscow:
1922.
ansov,

and

(From

NEP

Europe).

for the
1921).

for the Fall

Komissariat

New

in the
Fin-

"Problema
iv
Khozyaystvennogo
Kapitalizme
Konkretnom
Ravnovesiya
pri
Sovetskoi
Under
Sisteme"
("The Problem of Economic Equilibrium
Concrete
Capitalism
KommunistiSystem"),
vestnik
and in the Soviet
Akademii,
No. 17 (1926).
cheskoi

-425Reply

by Preobrazhensky
to critics
during
the debate
in the Communist
Academy
his
over
theory
of primitive
socialist
Printaccumulation.
ed in Vestnik
Kommunisticheskoi
Akademii,
No. 15 (1926).

Russkie

Finansy
i Evropeiskaya
Birzha
Moscow:
Moskovsky
v 1904-1906.
Rabochy,
1926.
Preobrazhensky
this
edited
volume
the
and provided
Introduction.
Material
for
the book compiled
by B. A. Romanov.

*Social

A collection
and Finances.
for
of articles
the Third
the Communist
International,
by the People's
edited
Moscow:
First
of Finances.
Moscow Factory
for
the
[Currency]
of Government
Notes,
1921.
Preobrazhensky
the contributors
to this
Also published
in
volume.
Sotsial'naya
Revoliutsia
i Finansy.

Revolution
Congress
of
Commissariat
Manufacture
was one
Russian

of
as

"Sotsialisticheskie
("Socialist

Kommunisticheskie
Predstavleniya
Sotsializma"
and Communist Conceptions
" usually
of Socialism,
to as "Socialist
and Communist Ideas About Socialism,
"
not sufficiently
vestnik
Kommunisticheskoi
accurate),
Nos. 12 & 13 (1925).

referred
which is
Akademii,

Speech given at the

munisticheskoi
Teoriya

Padaiushchei
Valiuty
Gos.
Izdat.,
1930.
cow:

Oktyabr'skoi

Trekhletie

Zakat

(A Theory

Moscow:

(Questions

(The Decline
Kapitalizma
noe Sotsial'no-Ekonomicheskoe

Printed

Gos.

Financial

of

Kom-

Mos-

Currency).

Izdat.,

1920.
Moscow;

Policy).

Gosudarstven-

Moscow:
1931.

Capitalism).
Izdatel'stvo,

of

in Vestnik

Depreciating

of

Revoliutsii.

Politiki
1921.

Voprosy
Finansovoi
Gos.
Izdat.,

of V. I. Lenin.
No. 11 (1925).

graveside
Akademii,

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