Essay 2: Two forms of the social product (Ivan Potapenkov)

Essay 2: Two forms of the social product
Author	Ivan Potapenkov
Translated by	Anastasia S. from Russian
First published	July 14, 2023
Type	Essay

In this part, the author continues to explain the primary forms of the commodity economy of the Soviet Union, in particular after the Russian Civil War. At the same time, the essay focuses on two forms of the social product under the commodity-planned economy.

The formation of new communist relations of production became possible only after the Russian Civil War was over. The foundation for this lay in relations of the planned organization of social production. And as it was mentioned previously, its formation took place in the conditions where the commodity production was preserved.

The preservation of commodity relations was rooted in the level of development of productive forces, which we inherited from tsarist Russia. It was said earlier that the necessity for a new communist mode of production is determined by the fact that the processes of labor to create objects of utility have become social. In such a case, the creation of any object of utility involves the labor of millions of people, which requires a planned, i.e. conscious division of this labor among various branches of productive activity. The productive forces of tsarist Russia had not yet reached such a level at that time. Almost all food created in agriculture was produced in small peasant households, which were based on the individual labor process. Therefore, in this process of production, a peasant was lord and master who depended on no one, which gave rise to his isolation in social production. The fact that his production is private and the products of his labor are his own private property was considered as a matter of course. The peasant engaged in relations with other participants of social production not in the process of production itself, but at the end of it while exchanging the results of the labour-process.

Due to independence and isolation from other producers, a smallholder recognized only commodity-money relations. However, during the years of the Russian Civil War he had nothing to trade, since all surplus product exceeding essential needs was confiscated under the policy of Prodrazverstka (grain requisitioning). But during the war, the following question was being decided: who will own the land, the landlord or the peasant? And in order to get a land, the latter was ready to tolerate the Prodrazverstka. By the end of the Russian Civil War, when the land issue was finally resolved in favor of the peasants, the peddling nature of the smallholder came out to the surface. It was impossible not to take into account the interests of the peasantry, which made up ¾ of the country's population; otherwise it would inevitably give rise to a second civil war, where one would have to fight not against landlords and bourgeoisie, but against the peasantry itself. The uprisings in Western Siberia and Tambov, the guerrilla warfare in the North Caucasus and Ukraine, and other small protest actions in various regions of the country are proof of this. Thus, due to the insufficient development of productive forces, the commodity form of the products of labor was inevitably preserved. That is, the preservation of commodity production should not be considered a mistake of someone or something; it was an objective inevitability, generated by the existed level of development of productive forces and the structure of classes in society.

This was the reason for the transition to the New Economic Policy (NEP), according to which the Prodnalog (agricultural tax in kind) was introduced instead of the Prodrazverstka. The tax rates of the Prodnalog were considerably lower than those of the Prodrazverstka. This allowed a peasant to have a surplus product that he could exchange for other commodities.

In the spring of 1921, while the future commodity was growing in the field, there was still a lingering hope that it would be possible to organize the exchange between industry and peasant households in a more or less socialist way through commodity exchange, or even through product exchange. However, harvest time began and it all came down to a simple buy-and-sell. If initially during the transition to the NEP it was a question of retreat to state capitalism, but then life showed the insufficiency of this retreat, and a transition to the state regulation of trade was required.

The preservation of trade, where the products of peasant farming were sold and bought, gave rise to the fact that the products of nationalized industry also appeared in commodity form.

Therefore, the formation of a planned organization of social production was carried out in special conditions, where the commodity was preserved, and where labor was measured and accounted for not in natural values of working time - hours and minutes - but indirectly through value forms.

Since planned organization was supposed to encompass all social production, it was carried out in the creation of social product. While the commodity form of the labor products was preserved, the social product was a totality of commodities.

A commodity is known to have a dual nature. On the one hand, it is a use-value that satisfies some need; on the other hand, it also has value. Therefore, in order to consume a commodity, it must first be bought, thereby realizing the value of this commodity. To enjoy the taste of barbecue, you need to pay for it with a ringing coin; and for a mere ringing of coins you will be only offered to taste the smell of barbecue.

Due to the dual nature of the commodity, the social product has also acquired a dual content. It is, on the one hand, the total of use values (or total product), and on the other hand, it possesses total value as the sum of the values of all produced commodities.

The substance of the commodity's value is human labor, i.e., the simple expenditure of human energy regardless of the particular activity. Since the measure of labor is working-time, therefore the value of a commodity is determined by the amount of working-time spent on its production. The labor spent to produce the entire mass of commodities that make up the social product is the total social labor, which is precisely the substance of the total value of the social product.

However, while labor is the substance of value, value alone manifests itself only in the exchange, where commodities are exchanged for money. Thus, in the act of exchange, the commodity expresses its value in money. And, although the substance of the value of commodities is labor, its manifestation is expressed in money, which becomes the measure of value. Thus, the commodity value acquired a separate existence from the commodity itself. The commodity world disintegrated into commodities and money. When we speak about the commodity, we usually mean its ability to satisfy human wants, i.e. we perceive commodity as a use value. When we refer to the value of a commodity, we always mean the money in which the value of the commodity is expressed. The value of a commodity expressed in money is nothing but the price of the commodity.

The social product as a whole is neither bought nor sold and its total value cannot be expressed in exchange. But since all the commodities express their values in money, i.e. have a monetary form of value, therefore the social product also expresses its total value in money, or has a monetary form of total value.

But unlike the commodity world, which split into commodities and money, there is only one social product for this period of time, there is no and there cannot be any other. Therefore, the same social product exists in two ways or has two forms of its being: the totality of commodities (total product) and money. And since the social product is unique for a particular period of time, it is not just money, but a certain amount of money in which the total value of the total social product is expressed. This amount of money is what I call "total money". Since the social product as a whole is neither bought nor sold, thus total money exists as mentally represented money or as ideal money. One can only find them as entries in planning, accounting and statistical documents. Money then became a measure not only of the value of commodities, but also of the total value of the social product.

The fact that the social product is a set of diverse goods, characterizes its qualitative side. Total value in monetary terms gives it quantitative certainty.

The social product is the result of social production for a certain period of time, usually a year. Having acquired the monetary form of its existence, the social product in its quantitative definiteness has become a measure of the volume of production.

That is why, when Lenin demanded from the economists of the Gosplan and the Central Statistical Department to work out an index-number for promptly obtaining generalized information on the production activity of trusts, the total value of all the products made at the enterprises of the trust in money terms, which was called “total output in money terms”, became such an index in the conditions of preserving the commodity form of the products of labor. This was due to the fact that, firstly, in social production has not yet formed a unified accounting, secondly, total output is simple to calculate, it is the sum of prices of manufactured products, and, thirdly, it was the simplicity of calculation that allowed to quickly provide information about the volume of production for the past period, for example, for a month.

The sum of the total outputs of the trusts belonging to a certain industry formed the industry total output, and the sum of the total outputs of the industries formed the total output of social product.

Thus, the social product existed in two forms. On the one hand, it is the total product, which includes all commodities created in society, both objects of utility and means of production. On the other hand, it is total output, as the gross value of a social product.

Reading Soviet documentation about plans and their fulfillment, one can come across information that, for example, in a certain year the volume of production increased and reached 230 billion rubles, or that in a year total output of 230 billion rubles was produced, which is basically the same thing.

The social products from various years are different as total products, but in the form of total output all these products have received qualitatively the same monetary form, and therefore they are comparable. They can be compared with each other and on this basis assess how production was progressing. If the value of social product in monetary terms is increasing, then there is an increase in social production, and, on the contrary, if the value of social product in monetary terms is decreasing compared to the previous period, then there is a decline in social production.