Stalin as Classical Economist

October 20, 1952

Stalin now demands an entirely new official Communist textbook, and has turned in a 25,000-word memorandum to say exactly what it must contain.

Most of it is the usual hodgepodge of Marxist jargon, obscure dialectics, vilification of capitalism, derision of dissenters, and pure claptrap. Yet it is significant for one ingredient—the revisions that Stalin has been forced to make of Marxist, Leninist, and even of previous Stalinist doctrines in order to bring Communist theory into a more plausible relation with actual Soviet practice. These revisions tacitly concede that complete socialism is unworkable.

Stalin admits that he still doesn’t know how to bring about pure Communism and directly distribute goods to individuals in accordance with “need.” He admits that he still doesn’t know how to get rid of the much-abused capitalist price system. He specifically orders that the new textbook explain “why we . . . do not destroy production of commodities for the open market, money, trade, etc.” He admits that he still doesn’t know how collective farms can be completely socialized.

He even thinks it would be “senseless and criminal” to expropriate “small and medium-size producers in the villages and socialize their means of production.” But this is to concede that capitalism must either be right in principle, or must continue to be tolerated even in Russia (after 35 years of absolute Communist dictatorship) at least as far as “small- and medium-size producers” are concerned. It is as if a state governor were to denounce grand larceny while contending that it is senseless and criminal to illegalize petty and medium-size larceny.

Stalin admits that he still doesn’t know how or when to achieve “the Communist formula ‘from each according to his abilities, to each according to his needs’.” He professes to be operating on the formula “from each according to his abilities, to each according to his work.” He even calls this “the Socialist formula.” But modify it a bit, make it “to each what he creates,” and you have, in effect, the capitalist formula, the basic principle of free enterprise.

Finally, Stalin admits that socialism and/or Communism cannot solve the vital problem of economic calculation, and must depend on capitalism and free markets for the answer:

“Our economic executives and planners made a proposal which could not but astonish members of the Central Committee, since according to this proposal the price for a ton of grain was proposed to be almost the same as the price for a ton of cotton, and in this the price for a ton of grain was made equal to the price for a ton of baked bread. In answer to the remarks of members of the Central Committee that the price for a ton of baked bread must be higher than for a ton of grain in view of the additional expenditures for milling and baking, and that cotton in general costs much more than grain, to which also world prices for cotton and grain bear witnesses, the authors of the proposal found nothing intelligent to answer.”

Stalin, in short, cannot trust even the economic planners that he picks himself. He rejects their guess as to the relative values of cotton and grain; he knows it to be false, because it does not correspond with the verdict of the capitalist world and the capitalist price system, the verdict of supply and demand, of consumers’ choice, the verdict of free markets.

“What would have happened,” he asks, “if the proposals of these comrades had received legal force? We would have ruined the cotton growers and been left without cotton.”

Stalin, in short, now knows what Truman and Bowles and DiSalle and Woods have still to learn—that bureaucratic price fixing is a farce, a fraud, and a disaster; that the economic planners are presumptuous blind men groping in the dark, and that there is no substitute for free markets.

If Stalin lives long enough, and continues his progress, he may end up as the world’s leading classical economist, and its foremost champion of laissez-faire capitalism.