[lbo-talk] Re: Trotsky on Soviet Planning

Turbulo at aol.com Turbulo at aol.com
Thu Jan 6 17:27:23 PST 2005


I think that you put too much importance in the semantics, especially the meaning of the word "private." It is true that in early stages of industrialization, ownership and control of the means of production remained in the same hands - and that is probably the only legitimate use of the term "private." However, with the rise of joint stock corporations, cartels etc. the term lost its meaning -as the ownership and control were separated. A joint stock corporation is in principle in the same relationship to its owners as the Soviet style enterprise - i.e. techno-managerial class exercising actual control of the firm on behalf of the owners who otherwise have little say in how the firm is run (for an analysis of the Soviet style firm see George Feiwel, _The economic of a socialist enterprise_).

So "privatness" or the form of ownership is not really that important, what really matters is management style and, far more importantly, macro-economic factors. What sets Russia and Western Europe apart is the banking infrastructure and skilled industrial labor - the latter had them because commercialism and industrialization in the West developed over a long period of time, a few hundred years. Russia did not have them because Russia remained mainly feudal society that lived off raw exploitation of human and natural resources with little or no investment, at least until 1862 when feudalism was officially abolished.

So as the Result, Russia found itself a bit backward by, say, few hundred years vis a vis the West and needed to catch up pronto, or face serious military threat. So what really set the Russia case apart form the West is that "capitalist" institutions that developed more or less "organically" in the West (by this I mean banking and credit institutions, social networks, skilled labor, self-management etc.) were mostly absent in Russia and had to be implemented by design and form above. That argument is explicitly proposed by Alexander Gerchenkron, but Trotsky argued along similar lines.

Private ownership is not a matter of semantics, and Trotsky would have been the last to argue that it is. The divorce between ownership and control in large corporations is only relative and temporary. Corporations are owned by individuals and institutions that ultimately demand a return on their inventment. While CEOs may exercise a great deal of latitude, the bottom line counts in the end. It is ultimately a question of profits, not style. This was not the case in the USSR. The Soviet bureaucracy was entrusted with delivering the goods to the people, not owners. They were thrown out because they could no longer do so in sufficient quantity or quality.



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