Ownership of the Means of Production

Contemporary Soviet propagandists claimed that since the "economic reform" the principal means of production remain in public ownership" -- either in that of producers' cooperatives or, for the most part, in that of the state:

"Public ownership of the means of production does unite the labour of individual producers on a scale embracing the entire national economy. The overwhelming proportion of the means of production is concentrated in the hands of one owner - the state".

(S. Khavina: "In the Crooked Mirror of Bourgeois Theories", in: "Ekonomicheskaya gazeta" (Economic gazette), No. 44, 1965, in: "The Soviet Economic Reform: Main Features and Aims"; Moscow; 1967; p. 139).

They claim that even when means of production are held and used by industrial enterprises, their ownership remains vested in the state:

"The state is the owner of all production assets in state enterprises. The collectives (i.e., the personnel of enterprises -- WBB) use these assets, but they do not own them".

(P. Bunich: "Economic Stimuli to Increase the Effectiveness of Capital Investments and the Output-to-Capital Ratio", in: "Voprosy ekonomiki" (Problems of Economics), No. 12, 1965, in: M.E. Sharpe (Ed.): "Planning, Profit and Incentives in the USSR", Volume 2; New York; 1966; p. 195).

This was undoubtedly the position under the socialist system which formerly existed in the Soviet Union:

"A commodity is a product which may be sold to any purchaser, and when its owner sells it he loses ownership of it and the purchaser becomes the owner of the commodity, which he may resell, pledge or allow to rot. Do means of production come within this category? They obviously do not. In the first place, means of production are not 'sold' to any purchaser;.. they are only allocated by the state to its enterprises. In the second place, when transferring the means of production to any enterprise, the owner -- the state -- does not at all lose the ownership of them; on the contrary, it retains it fully. In the third place, directors of enterprises who receive means of production from the Soviet state, far from becoming their owners, are deemed to be agents of the state in the utilisation of the means of production in accordance with the plans established by the state.

It will be seen, then, that under our system means of production can certainly not be classed in the category of commodities".

(J. V. Stalin: "Economic Problems of Socialism in the USSR"; Moscow; 1952; p. 58).

Since the "economic reform", however, means of production in the Soviet Union are classed as commodities:

"Under socialism the market is a sphere of planned commodity circulation, a sphere for the marketing of products -- means of production and consumer goods manufactured by state and cooperative enterprises".

(L. Gatovsky: "Unity of Plan and Cost Accounting", in: "Kommunist" (Communist), No. 15, 1965, in: M.E. Sharpe (Ed.): op. cit., Volume 2; p. 88).

Even where an enterprise pays for the use of its production assets (other than natural resources) by annual sums, it is regarded legally as the owner of these assets.

The Statute on the Socialist State Production Enterprise, adopted by the USSR Council of Ministers on October 4th., 1965, gives an enterprise "rights of possession" over the production assets which it holds:

"The enterprise will exercise the rights of possession.. of the property under its operational control".

(Statute on the Socialist State Production Enterprise, in: M.E. Sharpe (Ed.); op. cit., Volume 2; p. 291).

The acquisition of production assets (other than natural resources) by an enterprise is therefore described as "purchase":

"Credits for the purchase of heavy technological and power equipment of Soviet manufacture... are issued".

(S, Ginzburg: "New Developments in Construction Financing", in: "Ekonomicheskaya gazeta" (Economic Gazette), No. 43, 1965, in: M.E. Sharpe (Ed.): op. cit., Volume 2; p. 65).

"The single approach to managing the economy is displayed.. in granting enterprises equal rights.. to buy means of production...

Society furnishes enterprises with money for the purchase of the means of production... Only the purchase of the means of production by enterprises with the income received as a result of improving their work.. can be regarded as a form of spending 'their own resources' "

(P.G. Bunich: "Methods of Planning and Stimulation", in: Soviet Economic Reform: Progress and Problems", Moscow; 1972; p. 36, 44).

That the terms "rights of possession" and "purchase" are not here being used in-exactly is shown by the fact that the Statute gives the enterprise the right to lease or sell the means of production it "possesses" -- a right which involves clear proof of effective ownership by the enterprise:

"The enterprise will exercise the rights of.. disposal of the property under its operational control...

The enterprise may lease to other enterprises and organisations, at rents fixed for the given locality, buildings and structures, as well as production, warehouses and other facilities assigned to it...

Surplus equipment.. may be sold by the enterprise to other enterprises and organisations...

Sums obtained from the sale of material values representing fixed assets will remain at the disposal of the enterprise".

(Statute on the Socialist State Production Enterprise, in: M.E. Sharpe (Ed.): op. cit., Volume 2; p. 291, 293, 295).

The sale of means of production by enterprises is frequently referred to by contemporary Soviet economists and politicians:

"The enterprises will enjoy broader powers in the use of... the money from the sale of surplus equipment and other material values".

(A.N. Kosygin: "On Improving Industrial Management, Perfecting Planning and Enhancing Economic Incentives and Industrial Production" in: "Izvestia" (News), September 28th., 1965, in: M.E. Sharpe (Ed.) op. cit., Volume 2; p. 38).

"The enterprise will enjoy greater economic rights.. in disposing of property, productive assets".

(L. Gatovsky: ibid.; p. 74).

"The system of stimulating enterprises through their level of profitability in relation to assets.. will also interest them in the quickest possible sale of superfluous machines, the receipts from the sale of which will go into the development fund and will enable them to buy equipment needed to create the conditions for an increase in profits....

The sale of superfluous fixed assets will be done by enterprises on the basis of their residual values..

The enterprises have been given relatively extensive rights with respect to the sale of superfluous assets, the receipts from which go into their fund for development".

(P. Bunich: "Economic Stimuli to Increase the Effectiveness of Capital Investments and the Output-to-Capital Ratio", in: "Voprosy ekonomiki" (Problems of Economics), No. 12, 1965, in: M.E. Sharpe (Ed.): op. cit., Volume 2; p. 194, 199, 202).

"The socialist market for the means of production is the sphere... where the economic relations operate directly as the relations of supply and demand, and are realised in the act of buying and selling the means of production".

(V. Budaragin: "The Price Mechanism and Circulation of the Means of Production", in: "Nauchnye doklady vysshei shkoly: Ekonomicheskie nauki" (Scientific Reports of Higher Schools; Economic Science),No, 11, 1971, in: "Problems of Economics", Volume 15, No. 3; July 1972; p. 74).

Already in September 1965 Prime Minister Aleksei Kosygin was bestowing special praise on five transport organisations for having:

"...sold superfluous trucks and equipment".

(A.N. Kosygin: ibid.; p. 28).

In fact, following the "economic reform", the purchase and sale of means of production was gradually transferred to wholesale trading organisations:

"A new aspect of the activity of marketing and supply agencies will be the gradual transfer to them of wholesale.. trade in the articles and means of production".

(V. Dymshits: "Production: Plan: Supply, in: "Pravda" (Truth), December 15th., 1965, in: M.E. Sharpe (Ed.): op. cit., Volume 2 p. 221-2).

"Long-term and stable relations between supplier enterprises and consumers.. are a primary condition for the planned distribution of means of production through wholesale trade".

(N.Y. Drogichinsky: "The Economic Refom in Action", in: "Soviet Econoic Reform: Progress and Problems"; Moscow; 1972; p. 216).

Already by 1971 the market in means of production constituted some two-thirds of the country's total trade turnover (V. Budagarin: ibid.; p. 74), and by 1974 70 % of the market in means of production consisted of

"A large-lot wholesale trade... conducted directly between supplier and consumer".

(N.Y. Drogichinsky: "On Wholesale Trade in the Means of Production", in: "Voprosy ekonomiki" (Problems of Economics), No. 4, 1974, in: "Problems of Economics", Volume 17, No. 6; October 1974; p. 96, 98).

Furthermore, the transfer of ownership of means of production from the state to an enterprise by the act of purchase can in no way be regarded as transfer to and "agency" of the central state. For, although the enterprise is officially called a:

"socialist state production enterprise",

(Statute on the Socialist State Production Enterprise, in: M.E. Sharpe (Ed.): op. cit., Volume 2; p. 289).

It is described as an:

"independent enterprise"

(ibid.; p. 291).

and

"The state is not responsible for the obligations of the enterprise, and the enterprise is not responsible for the obligations of the state".

(ibid.; p. 291).

Contemporary Soviet propagandists, in fact, are at pains to stress that allegations that the enterprises are not really independent are nothing but "groundless bourgeois slander":

"Another bourgeois concept... denies the economic independence of socialist enterprises...It is not difficult to prove the utter groundlessness of this argument".

(S. Khavina: ibid.; p. 139).

Furthermore, the property rights of the enterprise are vested in its director:

"The enterprise is headed by a director...The director of the enterprise may, without power of attorney, act in its name...dispose of the property and funds of the enterprise". (Statute on the Socialist State Production Enterprise, in M.E. Sharpe (Ed.): op. cit., Volume 2; p. 310-1).

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