Introduction - Paul Mattick

The collectively written book presented below, The Fundamental Principles of Communist Production and Distribution, is now being published for the first time in forty years. Its authors, members of the Group of International Communists of Holland (GIKH), participated in the council movement.

Councils first arose during the Russian Revolution of 1905. According to Lenin, even then they could have seized political power, although they actually remained on the margins of the bourgeois revolution. For Trotsky, the Workers Councils represented, unlike the political parties active among the working class, the proletariat’s own organization. The Dutch theorist Anton Pannekoek saw the Council movement as the self-organization of the proletariat, which would lead to its class rule and control over production. With the conclusion of the 1905 Russian Revolution and the end of the Councils, interest in this new form of organization subsided and the organization of the workers movement was once again in the hands of the traditional political parties and trade unions. Later, the Russian Revolution of 1917 once again brought the perspective of the Councils to the attention of the international workers movement, this time not only as an expression of the spontaneous organization of the revolutionary workers, but also as a necessary measure to confront the counterrevolutionary policies of the traditional workers movement.

The First World War and the collapse of the Second International marked the end of the first phase of the workers movement. What was foreseeable long before, that is, the integration of the workers movement into bourgeois society, became an irrefutable fact. The workers movement was not a revolutionary movement, but a movement of workers who were trying to adapt to capitalism. The workers themselves as well as their leaders lacked any interest in abolishing capitalism and were content with trade union and political activities within the prevailing system. The meager achievements of the parties and the trade unions within bourgeois society expressed the real interests of the workers. Nothing else could have been expected, since a vigorously expanding capitalism rules out any real revolutionary movement.

The ideal of a possible harmony between the classes in the course of capitalist development, upon which the reformist workers movement was based, was smashed to pieces in its collision with capitalism’s own contradictions, which are manifested in crises and wars. Revolutionary ideology, which was at first restricted to a radical minority within the workers movement, spread among the masses when the misery of the war exposed the real nature of capitalism; and not just that of capitalism, but also that of the workers organizations which had emerged within it. These organizations had escaped from the control of the workers; their existence merely served to perpetuate their bureaucracies. Because the function of these organizations was bound to the preservation of capitalism, they can only oppose any real struggle against the capitalist system. A revolutionary movement effectively needs organizational forms which go beyond capitalism, which give the workers power over their organizations, organizations which embrace not just part of the working class but all of it. The Council movement was the first attempt to construct an organizational form adequate for the proletarian revolution.

Both the Russian as well as the German revolutions found their organizational expressions in the Council movement. But in neither case did they prove capable of asserting their political power and using it for the construction of a socialist society. While the failure of the Russian Council movement must undoubtedly be attributed to the general backwardness of Russian social and economic conditions, the defeat of the German movement was the result of the lack of willingness on the part of the working masses to realize socialism in a revolutionary way. Socialization was seen as the job of the government and not as the task of the workers themselves; thus, the Council movement decreed its own dissolution and reestablished bourgeois democracy.

While the Bolshevik Party had taken power under the slogan “All power to the Soviets”, it acted in accordance with the social democratic conception that the construction of socialism was the task of the State rather than the Councils. While no kind of socialization was carried out in Germany, the Bolshevik State destroyed capitalist private property, without, however, granting the workers any rights over production. However much it defended the interests of the workers, the result was a form of State capitalism, which left the social condition of the workers unchanged and instead actually continued their exploitation for the benefit of a new privileged class. Socialism could be realized neither by reform of the bourgeois democratic State nor by the new revolutionary Bolshevik State.

Aside from the objective or subjective immaturity of the situation, the road which could have been followed to achieve socialization remained enveloped in obscurity. Socialist theory generally tended to involve the critique of capitalism and the strategy and tactics of class struggle within bourgeois society. The road to socialism and its structure appeared to be already prefigured in capitalism. Marx himself had left only a few basic indications concerning the character of socialist society, since, practically speaking, it is hardly worthwhile to concern oneself with the future, with situations which cannot be understood based on the present or the past. Contrary, however, to later interpretations, Marx did make it clear that socialism did not refer to the State but to society. Socialism, as the “association of the free and equal producers”, lost its original meaning.

The characteristics of the socialism of the future already contained within capitalism were not identified with the possible self-organization of the producers in production and distribution, but with the tendencies towards concentration and centralization which were typical of capitalism and which were to finally give birth to State domination over all aspects of the economy. This conception of socialism was first assumed, and then attacked with the accusation of being an illusion, by the bourgeoisie.

The end of a vast revolutionary movement like that of the Councils does not rule out the possibility of its reappearance in a new revolutionary situation. Besides, one can always learn from defeats. The task of the council communists after the defeat of the revolution did not consist solely of propaganda for the council system, but also of an investigation concerning what the movement lacked which led to its defeat. One of its shortcomings, perhaps the greatest, was the fact that the Councils had absolutely no clear position regarding their role in the socialist organization of production and distribution. Since the Councils were based in the factories, the latter should be the starting point for social coordination and the synthesis of economic life, and it is within the factories that the producers must have power over what they produce. The Fundamental Principles of Communist Production and Distribution constituted the first attempt on the part of the Council movement in Western Europe to address the problem of the construction of socialism on the basis of the Councils.

Taking into account the great difficulties confronting a possible proletarian revolution, at first glance this work, which is for the most part concerned with the unit of calculation and accounting in the communist economy, may seem strange.

Since the details of the difficult political situations we can expect to encounter cannot be exactly known in advance, on a theme of this kind we can only devote ourselves to speculation. It could turn out to be easy or difficult to destroy a particular social system: this depends on conditions which cannot be foreseen. This work, however, is not about organizing the revolution, but about post-revolutionary problems. And since it is not possible to predict the state of the economy after the revolution, one cannot even set out an advance program of the work which must be done. But it is possible to carry out an anticipatory discussion of the procedures and instruments which are necessary for the establishment of certain desired social conditions, in this case conditions which are considered to be communist.

The theoretical problem of production and distribution in communism became a practical problem after the Russian Revolution. But this practice was determined from the beginning by the concept of centralized State control, which was the common heritage of the two wings of social democracy. The debates concerning the realization of socialism or communism did not touch upon the real problem: that of the control of the workers over their production. The debate revolved around how to carry out economic planning directed by a central authority. Since, according to Marxist theory, socialism knows neither market, nor competition, nor prices, nor money, socialism was conceivable only as natural economy, in which, by means of statistics, both production as well as distribution are determined by a central office. It was upon this point that the bourgeois critique focused, by claiming that under such conditions rational management is impossible because production and distribution require a measure of value, such as that provided by market prices.

So as not to anticipate the arguments presented on this issue in the Fundamental Principles of Communist Production and Distribution, let us just say that its authors have found the solution to the problem of the necessary unit of calculation in the average socially necessary labor time as the basis of production and distribution. They meticulously demonstrate the practical application of this method of public calculation and accounting to the two moments of social reproduction. And insofar as it is a matter of utilizing methods to obtain particular results, their reasoning is perfectly logical. The necessary precondition underlying the use of this method is the will to achieve a system of production and distribution of a communist type. Once this assumption is granted, nothing stands in the way of this method, although it cannot be the only one suitable for communism. According to Marx, all economy is an economy “of time”. The division of labor is arranged for, and the increase in the productivity of labor is implemented in accordance with the demands of production and consumption and, just like in capitalism, labor time is the measure of production, but not of distribution. On the basis of prices, the regulators of capitalism, values are linked to labor time. The relations of production and exploitation in capitalism, which are simultaneously market relations, and the accumulation of capital which is the motive and the motor force of capitalist production, exclude an exchange of equivalent values as measured by labor time. It is not for nothing that the law of value rules the capitalist economy and its development.

On the basis of this fact, one may easily imagine that in socialism, too, the law of value must be valid, since in socialism as well labor time must be taken into account, in order to have a rational economy. But labor time is transformed into “labor time value” only under capitalist conditions, in which the necessary social coordination of production is subject to the market and the relations of private property. Without capitalist market relations there is no law of value, even though it may (and perhaps always will) be necessary to consider labor time in order to adapt social production to the needs of society.

It is in this sense that the Fundamental Principles of Communist Production and Distribution speaks of average socially necessary labor time.

The authors emphasize the fact that others had previously proposed labor time as a unit of economic calculation. They considered this proposal to be unacceptable because it was based solely on production and not on distribution, and in this respect was still related to capitalism. From their point of view, social average labor time must be valid for distribution as well as production. At this point, however, we encounter a difficulty and a weakness in calculating labor time, a difficulty which Marx had also taken into consideration, and, not discovering any other answer besides the abolition of calculation based on labor time for distribution, he put forth the communist principle “From each according to his abilities, to each according to his needs.”

In his Critique of the Gotha Program of the German Social Democratic Party, Marx highlighted the fact that distribution in proportion to labor time would imply a new inequality, since the producers are characterized by different capacities for labor and by different personal situations. Some work more intensely in a given time period; some have families to maintain, while others do not; therefore, equality of distribution in accordance with labor time would cause inequality in the conditions of consumption. Marx writes that “In effect, with an equal amount of work contributed and therefore with equal access to the social consumption fund, one obtains more than another, one is wealthier than another, etc. . . . To prevent this unjust situation from arising, the law must be unequal rather than equal.” While he considered this inconvenience to be inevitable in the first phase of communist society, he did not consider it to be a communist principle. When the authors of the Fundamental Principles say that their presentation is “only the consistent application of Marxian thought”, this is true only insofar as that thought is applied to a phase of socialist development within which the principle of the exchange of equivalents still prevails, a principle which will come to an end in socialism.

For Marx it was clear that “all distribution of the means of consumption is only the consequence of the distribution of the means of production”, and that “when the means of production become the property of the workers themselves, a distribution of the means of consumption unlike the current one will result”. The possible shortcomings of a system of distribution according to labor time cannot therefore be overcome by means of a separation of production and distribution, since the control of production on the part of the producers also implies their control over distribution, just as the determination of distribution by the State—its allocation from above—also implies State control over production. The authors of the Fundamental Principles justly emphasize the fact that the producers must have the fullest opportunity of controlling their production, but that this would require a form of distribution in accordance with labor time is another matter entirely.

In the advanced capitalist countries, that is, in the countries where a socialist revolution is possible, the social forces of production are sufficiently developed to produce means of consumption in overabundance. More than half of all capitalist production as well as the unproductive activities associated with it (totally disregarding the productive forces which are not exploited) surely have nothing to do with real human consumption, but only make sense in the irrational economy of capitalist society. It is clear, then, that under the conditions of a communist economy, so many consumption goods could be produced that any calculation of their individual shares of average socially necessary labor time would be superfluous.

The attainment of a state of abundance, already potentially realizable, presupposes, however, a complete transformation of social production, based on the real needs of the producers. The transformation of capitalist production into a system of production oriented towards meeting human needs will not just bring, as a result of the abolition of capitalist relations, a change in the form of industrial-technological development, but will also thus provide greater security for the future of human existence, which is now so obviously endangered.

While the Fundamental Principles justly puts the accent on the fact that production is conditioned by reproduction, and while the starting point of communist production can only be the end-point of capitalism, the new society in any case needs adequate modifications in the goals and methods of production. The procedures employed in these modifications and the results obtained will permit the choice of the right mode of distribution, in regards to both the various stages of production as well as the real and varying needs of society. It may also be possible that a partial destruction of the foundations of production as a consequence of the class struggle required for social transformation could rule out distribution according to labor time, without thereby rendering an egalitarian form of distribution impossible, by rationing, for example. And this egalitarian distribution may indeed be determined by the workers themselves, rendering the harsh necessity of labor time calculation unnecessary. But the Fundamental Principles assume a “normal” communist economic system, that is, a system which has already been established and which is operating under its own conditions of reproduction. In such conditions, a form of distribution linked to labor time seems superfluous.

It is true that the “exact relation between the producer and his product”, as elaborated in the Fundamental Principles, concerns only the individual’s part in production—after the subtraction of those parts of production which are necessary for social consumption and the reproduction of social production. The process of socialization is expressed in the reduction of individual consumption and the increase in public consumption, by means of which communist production finally tends towards the abolition of the calculation of labor time in distribution. The economic structure without a market requires the organization of consumers into cooperatives (in direct contact with the factories), in which individual needs, in reference to consumption and production, can be collectively expressed. It is a shame, however, that this is the least developed part of the Fundamental Principles, since it is precisely the market economy’s alleged freedom of choice in consumption which is utilized by capitalism in its apologetics. In reality, it is entirely possible to establish consumption requirements without recourse to the market, and to do so even more effectively, because in communist society the distortions in market demand caused by a form of distribution linked to the existence of social classes will disappear.

In production as well, calculations can only be approximate, since the process of labor and reproduction is subject to constant change. The calculation of social average labor time for aggregate production is subject to a certain delay, and the results obtained are always lagging behind actual reproduction. The “precision” of the calculation refers to a moment in the past, and however much it may be possible to curtail the time required for reporting by means of modern methods and technologies, social average labor time will constantly vary. This lack of precision does not present an insuperable obstacle for the calculation of production and reproduction at either the level of production itself or at a more general level. But the actual situation will differ from the projected result, and only in this difference will the real state of production be found. In the calculation of labor time it is not a matter of obtaining a complete correspondence of production time, as obtained via the unit of measurement, to the average labor time actually employed and the resulting production, but of ordering and distributing social labor, something which, by its very nature, can only be approximately achieved. For a planned communist economy, such a result is perfectly acceptable.

The authors of the Fundamental Principles conceive of the organization of production in such a way that “the exact relation between the producer and his product will become the basis of the social reproduction process.” They see this as the “fundamental problem of the proletarian revolution”, because it is only in this way that the erection of an apparatus over the heads of the producers can be avoided. It is only by means of the definition of the relation between the product and the producer that “the role of managers and administrators in the division of the social product can be abolished”. The necessary precondition for a classless society is thus the producers’ self-determination of the distribution of their products. In reality, the determination of the direct relation between producer and product can only be the result of a victorious proletarian revolution, which establishes the Council system as the form of social organization. In that case, there may be less need to regulate the productive process according to distribution. One could very well imagine a controlled distribution of the means of consumption as well as an uncontrolled one, without this necessarily leading to the existence of new privileged strata. Furthermore, the sole assumption of a norm for distribution is not a sufficient condition for the establishment of a communist economy: the latter, in effect, must not be based simply on the participation of the producers in the division of the social product but, beyond these problems, in the material conditions of social production.

In capitalism, distribution is only apparently regulated by the market. While production must be realized on the market, the market itself is determined by the production of capital. The production of exchange value and the accumulation of capital are the bases of the production process. Use value appears in production only as a means to increase exchange value. The real needs of the producers can only be taken into account if they coincide with the imperatives of accumulation. Production, the production of surplus value, is regulated in accordance with exchange value relations, which only accidentally coincide with use value relations. Communist society produces only for use and must for that reason adapt production and distribution to the real needs of society. Production is prior to distribution, although it is determined by the needs of the consumers. But the organization of production requires something more than the exact determination of the relation between the producer and his product: it requires control over the needs and capacities of production of all of society, in their material forms, and an adequate distribution of social labor.

The Council system will at the very least have to create institutions which will enable it to supervise the needs and possibilities of the whole of society. The information thus obtained must lead to decisions which cannot be made separately by each factory organization. The structure of the Council system must be such that production will be centrally regulated, yet without infringing upon the autonomy of the producers. In the factories themselves, furthermore, the implementation of the decisions of the workers will be left to the Councils, without thereby leading to an ascendancy of the Councils over the workers. In national production as well, from a more general perspective, organizational methods can be discovered which will coordinate these institutions above the factory level, under the control of the producers. But such a solution of the centralism-federalism contradiction, which is in any event advocated in the Fundamental Principles, cannot be resolved so easily by way of a “registration of the economic process in general social accounting”, and will most likely require other institutions, integrated into the Council system, which will be specifically dedicated to economic organization.

In the Fundamental Principles, the rejection of a State-directed central administration of production and distribution is based on the Russian experience, which actually does not apply to the Council system, but to State capitalism. But in the latter case it is also true that production and distribution are not the responsibility of planning institutions but of the State, which uses the planning institutions as its instruments. It is the political dictatorship of the State apparatus over the workers, and not economic planning, which has led to a new kind of exploitation in which the planning authorities also participate. In the absence of the political dictatorship of the State apparatus, the workers would not be compelled to submit to a central administration of production and distribution.

The first requirement for communist production and distribution is therefore that there must be no State apparatus existing alongside or above the Councils, and that the “State” function, the suppression of counterrevolutionary tendencies, be exercised by the workers themselves, organized in their Councils. Any party which, as a fraction of the workers, aspires to State power or sets itself up as a State apparatus after seizing power, will undoubtedly attempt to assume control over production and distribution, and will seek to perpetuate this control in order to preserve the positions it has occupied. If a minority controls the majority, then exploitation still exists. The Council system cannot allow any State to subsist alongside it, without abdicating its mission. But without such State power separated from society, any planning of production and distribution can only be carried out by the Council system. The planning institutions themselves are also enterprises, which, together with other enterprises, are united in a single Council system. Concerning which, it should now be pointed out that the working class, too, is subject to constant change. The Fundamental Principles consider the industrial proletariat gathered in its factories to be the socially decisive class. The Council system based in the factories determines the structure of society and obliges the other classes, the independent peasantry, for example, to integrate into the new social-economic system. Over the last 40 years the working class, that is, the category of those who work for a wage or salary, has grown, yet—in relation to the entire population—the number of industrial workers has declined. One part of the white collar employees work in the factories together with the manual workers, another part works in the field of distribution and administration. Since production is becoming increasingly more dependent on science, and the productive forces of science have a “tendency” to surpass those of direct labor, the universities, at least in part, can also be viewed as “factories”. And if, in capitalism, surplus value always means unpaid labor (surplus labor), regardless of the state of science, social wealth in communism is not manifested as an increase in labor, but as the continuous reduction of necessary labor, as a consequence of scientific development which has been freed from capitalist limitations. Production is progressively socialized as a consequence of the increasing participation of the masses in the production process, working masses who can only exist in the strictest collaboration and the reciprocal interpenetration in all kinds of work. In a word, the definition of the working class has been expanded; it is more inclusive today than it was 40 years ago. The changes in the organization of labor already contain a supersession of the division of labor, of the separation between manual and intellectual labor, between office and factory, between workers and managers: it is a process which, by way of the participation of all the producers in production which is now socially-oriented, could lead to a Council system which includes all of society and thus puts an end to class rule.

One can share the distrust evinced in the Fundamental Principles for the “managers, technicians and scientists” who arrogate to themselves the right to direct production and distribution, without overlooking the fact, however, that apart from the managers, the others are producers. The Council system necessarily puts them to work alongside the other producers and strips them of the privileged positions they occupy in capitalism. Nonetheless, since backward steps in the social domain are always possible, it is clear that even a Council system can decay; as a result, for example, of the lack of interest of the producers in their own autonomy and the consequent transfer of the functions of the Councils to system insiders, who then become independent of the producers. The authors believe that this danger can be avoided by means of a “new calculation of production as the general basis of production”. But since this calculation of production must first of all be announced, the hoped-for effect could then be lost due to a series of modifications.

As the authors explain it, the system, once established, is complete. By means of the “objective operation of production”, of the control of the latter in relation to reproduction, the system is defended against the accession of individuals to decision-making power, as in the case of State capitalism. The new system of production and distribution itself guarantees the communist society, although the “objective operation of production” is in reality always guaranteed by individuals. In capitalism, too, there is an “objective operation” of production, which is dictated by the law of the market, to which all individuals are subject. It is the system which dominates man. This fetishistic outward aspect of the system conceals the reality of the social relations of man’s exploitation of man. Behind the economic categories are classes and individuals, and every time the fetishism of the system is overcome, the open struggle between classes and individuals comes to light. While communism is also a social system, it does not act above men, but through them. It has no life of its own to which individuals must necessarily adapt; the “objective operation of production” is determined by individuals, but these individuals comprise the Council system.

These brief observations will be enough to indicate that, in the Fundamental Principles, we are not presented with a finished program, but with an initial attempt to approach the problem of communist production and distribution. And, although the Fundamental Principles addresses a future social state, it is at the same time an historical document which sheds light upon a stage reached in past debates. Its authors dealt with the questions of socialization which were current more than half a century ago, and some of their arguments are no longer pertinent; the Fundamental Principles was an intervention in the debate between the theoreticians of natural economy and the representatives of the market economy, demonstrating the mistaken positions of both.

Socialism is generally no longer considered in terms of a new society, but as a variant of capitalism. The defenders of the market economy speak of a planned market economy, while the defenders of a planned economy utilize market-based economics. The organization of production based on use value does not rule out an unequal distribution of consumption goods through price manipulation. “Economic laws” are thought to be independent of the type of society and, at most, the current discussions revolve around what mixture of capitalism and socialism is more “economical”.

The “economic principle”, that is, the principle of economic rationality which, as is so often repeated, is the basis of every social order and which is presented as the achievement of the maximum result at the minimum cost, is in reality nothing but the classic capitalist principle of production for profit, which always tends towards the maximum of exploitation. The “economic principle” of the working class, consequently, can only be the abolition of exploitation. This principle, upon which the Fundamental Principles is based, has until now been a dead letter for the workers. Besides the obvious exploitation in the so-called “socialist” countries, the academic conferences in the capitalist countries which address the question of socialism only refer to systems of State capitalism. “Socialist ownership” of the means of production is always thought of as State ownership. The administrative distribution of goods with or without a market is always the object of centralized decision-making. As in capitalism, exploitation comes in two forms: through the continuing separation of the producers from the means of production, and through the monopolization of political power. And whenever some kind of right to co-management has been conceded to or imposed upon the workers, the market mechanism combines self-exploitation with State exploitation. Whatever weak points may be found in the Fundamental Principles, in the current situation, today as well as tomorrow, it will still be the starting point for all discussions of and serious efforts to bring about a communist society.

February 1970