The Capitalist Mode of Production in Russia

Foreword

This particular article was written in 2015 and two years later the Russian capital has not brought anything new. Additionally, in the article that is called “Russian Cartel” we depicted only formal changes regarding the relations between mining and manufacturing industries, and population’s income, exchange rate and centralization of the capital.

The purpose of this article “The Capitalist Mode of Production in Russia” remains the same — the disproof of the common myths around the Russian socioeconomic picture.  There are six main thesis that we propose:

1) Despite the disproportionate development, the bourgeois historical mission for the industrialization of the economy and the expropriation of peasants was already carried out in the Soviet Union.

2) The collapse of USSR and transition to a new form of the market economy were necessary events.

3) The deindustrialization of the 90’s does not necessary mean the historical step backwards for a nation which has already developed its basis.

4) The Modern Russia had carried out the negation о the Soviet model in form (revolution in the superstructure, property, etc.), but retained its imperialist content (export of goods and capital, and state inflation).

5) Due to abolishment of the state monopoly on the foreign trade and inclusion of the private owners into world market in full scale, the production cycles (prosperity and crisis) in Russia has closely approached to the world’s level (1998, 2009).

6) The structural changes led to the temporal activation of proletariat and uncovered the new currents of the mass movements that are multiclass in some degree.

These theses are fully disclosed in the text itself. Unfortunately, the references and tables that were used in the process of creating this article were not included in the English version due to the fact that the most of them in Russian language. However, for further information about materials that were used you can check the original version.

post-cap 2017

 

Introduction

The collapse of USSR, the state of “the true socialism”, is perceived by the majority as a symbolic event of history, hardly anyone would completely ignore the changes and renovations in social life. However, different theoreticians, historians and economists are putting forward the reasons for what actually happened, the versions proposed by them, at best contain small portion of truth (for example, an assumption of bad management of reforms by official leadership or some kind of “foreign conspiracy” etc.). Soviet Union, which in the minds of millions is associated with “socialism” or “communism”, after its collapse, caused numerous conversations about “death of communism” amongst opponents and supporters of the regime (including a large number of the former members of the CPSU). So, what is dead?

In fact, in “socialist state” everything was different, the government did not try to press on capital but even protected it. The state monopoly that did not actually revoke an economic autonomy of enterprises (it is clearly illustrated by the low degree of concentration of production) sometimes had seen the limits of its development which could be overcome under the same system. However, a tendency towards decentralization was observed since the introduction of the planned economy- at first weak (black market, cooperatives, and small-scale rural production), then more and more open. Khrushchev’s (1956-58), Kosygin’s (1964) and Andropov’s (1983) reforms were motivated by a desire to liberate capital from excessive state tutelage that had once been necessary in process of Stalin’s industrialization. Nevertheless, even the state-owned enterprises under Stalin did not cease to serve for private interests; it was functioning as capital, increasing its productive potential through the series of circuits of value. Did reasonable plan tame the law of value since there had always been its over fulfillment that was even welcomed and encouraged? Planned production of goods, “crystals of an abstract labour”, was a guideline for enterprises without any possibility to overcome market relationships and capital. Supporters of the Soviet regime often remind that supervisors were salaried employees whose salary would be relatively low compared to “obvious” capitalists. It does not change the fact, even though it was a case. Capitalist’s public functions can be performed by the wage workers with a low income because when enlarged reproduction of capital is taking place, surplus value is getting attached to the Cost-Price and being passed to the third party- owners of rent, usurers, bureaucrats, etc. – and not necessarily wasted by productive capitalist on means of consumption. The desire for non-stop self-expansion of value and growth of a company, not the unrestrained personal consumption, is driving capitalists.

 

The slowdown in the number of industrial workers and attempts to increase productivity by the increasing intensity of the labour were noticeable in the late 60’s and early 70’s. The working week was limited to 42 hours, later in 1977 down to 41 hours. These changes were guided to extract the relative surplus-value; it is a boundary beyond which capital subordinates the labour. However, the introduction of machinery and intensity of labour had slowed because the rates of modernization of the past, which were characteristic of the young capital, were lost. The new markets for realization and selling goods were necessary for production. During this short period of time the foreigner trade was increased, but the capacity of the state property was still too small to enter the global market. The iron curtain was losing its relevance.

The oil crisis in 1973 provoked USSR to increase oil’s export, thus recently discovered oil fields in Western Siberia appeared in handy. On the other side of the planet the rise in the oil prices was beginning of the fall of machine engineering Detroit. The cars that were built there appeared to be too consuming, and that is why they became unclaimed. A lot of the factories were abandoned and destroyed. In the USSR “the red directors” were unaware that similar events will begin in Russian industry but in the twenty years.

 

 

1986-2000

In 1986 oil was 1/3 in structure of commodity exports of the USSR. Between 1985 and 1986 the prices of oil dropped in twice, due to the fact that in 1985 third of the county’s export was depending on oil, economy experienced first serious hit. After a major collapse (global crisis in 1987 and recognized only in 1989 the Soviet crisis), the world, as it was formed after the World War II, has significantly changed: the collapse of UUSR, the emergencies of the new states, reunification of Germany and etc. Russia needed a regrouping of all the ways of circulating value. Therefore, in 1989 everything started with the right to lease and buy back the private property. When the state property, as one of the bourgeois juridical forms, began the path of privatization, “independent” businessmen tried to refresh capital by giving it the reserves for growth at the expense of global market. Similarly, foreigner hunters for profit had acquired the right to associate itself with the Russian market.

However, liberalization could not guarantee impetuous economy growth. The prices were freed from regulation, and it caused their rapid rise, even without any intersectoral agreement. This kind of market without a delay led to a disruption of networking and accounting which were provided by the state control. It is generally accepted that since January 1992 there were deficit banknotes. This shortfall definitely took a place, but it only covered the general worsening of the crisis of overproduction because manufactured goods could not be realized in circulation, to be exchanged for money, which did not have own value. Movement of money expresses the circulation of goods, but not vice versa. When general prices rise, the lack of funds only means that there is a decrease in circulating goods. Currency reform of 1993 is an example that government did not understand the problem. Therefore, the increase in prices is a consequence of the fact that every capitalist himself vaguely sees his own capital. By making a profit in the form of money, he concludes that the capital is mainly monetary capital. Liberalization of the prices had become a “speculative fever” when capitalists wished to receive a much greater profit than the total amount of surplus value produced. The state regulation of prices in the Soviet Union, which is usually accused of promoting unprofitable enterprises, did not increase the total amount of the proceeds of the capital, so, the prices in 1992, assigned by the autonomous owners, were not able to enrich society.

Privatization itself is directly related to the further development of fictitious capital (securities, etc.) in Russia. Small-scale privatization has affected mainly small enterprises of the trade and services. Voucher privatization took place as a distribution of securities to the population, but turned into inexpensive buying and confiscation by «red directors». Only a third of the enterprises had remained in the state of ownership. As a result, the entire process of privatization can be compared to the auction sales that are several times lower than previous prices. Although, some of Directors still had opposed  privatization, the final chord of the former state came in 1993. That year was also notable for the rest of the world: Finland came out of the crisis after suffering from the earlier break of trade ties with Russia, there was a lively recovery of production in the UK, on the hand, Spain had experienced one of the worst downturns.

Rising unemployment in Russia can be considered not only as a result of bankruptcy or reorganization of firms, but also the growth of redundant population. All of this is the part of the same process of restructuration and adaptation of the capital \ reproduction of capitalist relations. The restructuring of capital is commonly understood as the change in the ratio of debt to equity, due to the fact that the bourgeois economists separate the notion of capital from production and enterprise. In a broader sense, the restructuring of capital means changing all flows of the value surrounding the enterprise and in the total production network. In addition to the administration of the top, Soviet state-proprietor can be also considered as the owner of the constant capital and extractor of the differential rent. In the Soviet Union «Red Director» did not own the plant and constant capital was not paid out of his pocket, but it was handled by the state budget. However, acting in the status of salaried worker, director was constrained by the extraction of the surplus value by the state, similarly to the capitalist who is constrained by the rent (part of the surplus value) paid to the landlord (both private and the state). Thus, privatization is an escape from this attachment, an easy repayment of accumulated capital rather than a simple change in legal ownership.

In order to break with the past, a new democracy had rejected the rigid protectionism (protection policy of the national market from the oppression of foreign firms). Although, Russian capital was losing a competition to producers from a more developed countries, the fictitious capital looked profitable for the great deal of owners. Searching for the space of easy replenishment gave the opposite effect — a significant flow of capital from the industrial sector led to a deep devastation of production (by the end of the 90s the production of surplus value in the industry declined by about 2-fold compared to level of the end of the USSR). Consequently, manufacturing industry had suffered from a heavy damage because of a such actions. Similarly, the agriculture faced an increased level of private enterprises on the one hand, on the other, industry had suffered from a decline of the volumes of production. The collapse of the productive forces, a loss of value, in crisis often has chances for further economic recovery, but Russian businessmen stumbled upon a crowded marketplace. For the western countries in a similar situation one of the solutions were de-industrialization and export of industry in less developed countries. Russia had managed to scale the internal collapse of the industrial capital with saving of domination in ex-USSR republics.

It is a mistake to perceive the capital solely as a creative relationship between human beings. The essence of the method of production lies on the fact that the reproduction of value is realized through wage labour and the sale of commodities — a repeating cycle. To avoid devalorization and save accumulation, capital may independently decide on the damaging or destruction of still applicable commodities; if we accept commodities as an obsolete it will create a demand for a new one. Therefore, a planned obsolescence is one of the sides of this destructive force. Moreover, cemeteries of cars, quick-blow light bulbs and so on are clear examples of its manifestation. Another aspect of it is that the valorisation of the capital sooner or later meets its limits, and here begins devalorization as a disaster for the economy.

The moment of devalorization is quite natural for the capitalist mode of production, the reduction of reproduction of value, when after the fall of the rate of profit follows capital’s depreciation. Initially, capital loses its gains, the previous profit is reduced and the advanced capital begins partial numbness — part of production is stopped, means of production and labour are utilized less. In the idle moments when the new value is not created, devalorization is manifested in deaccumulation. In other words, it is a violation of the accumulation, the inverse process in which the constant capital and variable capital no longer labour as embedded, advanced value, meaning that they no longer serve as the creation of the new value due to reduced or ceased production. The common russian expression «factories remain unclaimed» («Заводы стоят», «zavody stoyat») sufficiently and clearly describes this situation. Deaccumulation does not mean the death of the entire mode of production, but it is accompanied by a crisis of overproduction. The frozen part of the means of production can resume the reproduction of capital in the new cycle, or may be destroyed as a productive force if the capital no longer applies it.

Moreover, trying to stay afloat, some companies use barter exchange. Such an agreement between companies partly helped bypass the step of converting capital into money-capital, consequently, protected from price leaps and credit debt. The barter exchange had covered labour relations too: a great deal of workers remembers salaries issued in the form of manufactured commodities (food, tools, appliances, clothing, etc.); however, it happened only because the company was not able to sell their products on their own. It is a mistake to call this type of barter specifically Russian exoticism, this type of exchange also occurs in the US and Asia.

Even though, money is not completely excluded from the circulation around the enterprises, we can consider mental fantastic experiment of the complete refusal of money in order to imagine an introduction of moneyless circulation as a temporary form of capital movement, which is not too comfortable, but sometimes useful for saving the value and even its growth (problems of implementation that are able to stop the creation of new value we will omit). Thus, real-world examples in the Russian economy will show us the difficulties of excluding the money from circulation about which some pseudo-socialists dream of. Let us assume that the capitalist in this case is not opposing workers as the owner of money capital directly, he is still the owner of the value of the means of production and commodities, so capital as self-growing value is not going away. Therefore, circuit of commodities, not money capital, demonstrates the form of movement of capital as the whole. Furthermore, money continues to function as a circulation measure, even without taking a part in it as materialized form (paper money, coins, etc.). This «imaginary or ideal money» is a pure form of value. As the abolition of the golden standard did not deprive gold of its special secondary use-value, the barter in capitalist society (which needs to be distinguished from the barter in the primitive market exchange) is not overcoming the monetary form. Thus, the money for these businesses exist somewhere out of exchange and at the same time in the market, as the capitalist mode of production is still dominant and the exchange value does not really make a step back, the exchange visually is lost in the distribution. The contract for supply between enterprises does not revoke anarchy of production, but saves it. If we imagine that enterprises and individuals have achieved harmony in the exchange, each performing to other function of buyer of all commodities (means of production and means of consumption), then because of the difference in turnover periods the necessity of reserve capital, money and credit will appear. Who wants to stop production in anticipation of the supply? The thirst for accumulation and the growth in the production of each enterprise will violate this harmony. After the first short-circuits  a larger quantity of commodities  on the market will be presented, which is stipulated in the mutual contract, even if the enterprise with a long period of turnover has not have time to deliver the produced value. The contract will only cover the movement of capital. The difference between the various periods of turnover of capital already raised the issue of the return of the money form or similar form of capital. Salary issued as a proportion of the commodities produced in its natural form does not negate the fact that the worker sells his labour to the capitalist or impersonal enterprise. Marx called this «second deal» between the worker- the buyer and the capitalist- the seller. The same goes for the capitalists, acting for each other as buyers, and therefore skipping the money form. This is a setdown to all «paper» leftist theories, seeking to remove the money a legal term or hide exchange through a planning value tables. Here together converge Stalinism (the work «Economic Problems of Socialism in the USSR» offers to resolve the contradiction of the villages and towns through moneyless exchange, reaching at the end to the verbal substitution of «commodity» in the «product») and the anarchist theories, which put at the head of the angle the economic autonomy or talking about «voluntary agreement» between the collectives with the actual preservation of private enterprises at best.

The victory of the communist mode of production does not simply mean that the society refuses money. It will destroy the foundation and preconditions for the money form and for the value generally by intervening in social relations and by constraints of the capitalist and market aspirations of enterprises. Each item will be deprived of autonomy and production will be a subject to planning in the full-size, which is based on a study of the needs of the human species. The competition between these clauses of production becomes meaningless because they cannot be opposed to each other; the need of a frenetic reproduction of value will disappear, nobody will be concerned about discrepancy between supply and demand and the difference in production and delivery periods would not require money compensation. Furthermore, being put to the service of social needs, the total production will not be covered by a thirst for accumulation and exchange, each product will be made for the consumption and not for the sale. Post-capitalist society will plan in advance what, where and when the product will be placed: for storage or consumption; in contrast to the barter and the value table in the spirit of the Soviet Union, there will not be a comparison between qualitatively different use-values for exchange of goods. In capitalist society an abstract labour is realized in the exchange of value, which means that the exchange equates different substances of value with each other. While in communist society, the production will be managed without the mediation of exchange, without the comparison of the results of the differentiated labour, without universal labour abstraction.

The reproduction of the labour power in Russia in 90s was organized in accordance with changes in the economy — the emergence of the private sector in health and education, the reduction of budget costs and difficulties in requalification of workers. The apparent involvement of criminal elements (however, it should be borne in mind that the shadow economy also was in the Soviet Union) — is one of the features of the reorientation of social relations. The economic transformation led representatives of different layers to attempts of integrating into a new network of relationships as an informal «agents of capital». Additionally, racket, raiding, purchase and resale of collapsing means of production — is not a sign of the direct degradation of capital to feudal basics, to the non-economic coercion. Similarly, in the US, criminal activity emerged in the 30s, but it is unlikely that someone would call America of that period as the country which was walking back to feudalism. One of the examples of the «free market», Hong Kong, is also famous for its ubiquitous triad gangs.

In analysis of the current moment, some ultra-lefts tend to use the term capital restructuring, a special process, a phase of capitalist mode of production that began in the 70s in the West and is still ongoing. According to them, the restructuring of capital is inseparable from the attack on the reproduction of the labour power that provokes the proletariat to fight for its’ human existence, against the conditions of the reproduction of capitalist relations. The attack on the reproduction of the labour power in Russia is actually observable, but all over the world it is just one of the possible outcomes of capitalist accumulation after the Second World War. Perhaps, this view of the global movement of capital is derived from the structuralist approach to public relations. Unfortunately, ultra-lefts do not remember that the capital exercised pressure on the reproduction of labour power way before 1973 and that devalorization have already had opposing feature to provide conditions for the further valorisation. There are no special phases in reproduction of labour power, no restructuring abolishes proletariat.

The «cheapness» of the means of production and labour explains why development of the productive forces for the russian capitalists was no longer necessary. Often, the introduction of new equipment, retrofitting existing facilities and requalification of workers are «unprofitable» for the property owners. Indeed, the progressive nature of the capitalist mode of production is relatively limited, from the capitalist’s viewpoint there are no good reasons to introduce new means of production and increase productivity, the aspects that are liberating labour, if cost-prices exceed the accustomed costs in the first place. If privatization for the capitalists has a low cost, then it is logical that the most of them do not express a great desire to upgrade production. Speaking of the relative limits of capitalist technical progress, it is impossible to declare an absolute decadence in the mode of production, the formal line beyond which the death of capitalism depends on subjective factors. All crises and disasters for the capital are already catastrophic because it declares the period of stagnation and deaccumulation, which was mentioned above. Every crisis is a manifestation of the contradiction between private appropriation and the social character of labour. Thus, growth of productivity keeps up with the increase in the organic composition of capital (the ratio of the value of the means of production to the value of labour power) and contrasts with the decrease in interest of enterprises in the introduction of the new technical means, which is manifested in the process of devalorization, in the falling rate of profit. In the post-crisis period, capital has new perspectives for the accumulation, the new cycle begins and the limits of technological progress expand. But this also means that the next crisis will be even more catastrophic.

In the mid-90s the large capital had still showed its nature and revealed a tendency for [re]absorption of the small and medium-sized enterprises. The sizes of the extracted surplus value contributed to the growth of the middle class in Russia, although, their appearance was difficult because of decrease of the volumes of production. Therefore, we should speak of the simultaneous existence of several conflicting areas of the economy: weak post-crisis recovery, the growth of foreign trade after 1993, the development of non-productive professions and sectors.

Lagging behind by the productivity from the more advanced countries, the Russian state, however, continued the imperialist policy of the Soviet Union, mainly in relation to the CIS countries. According to the definition of imperialism as the external expansion of financial capital, we can conclude that (formed by the merger of banking capital and industrial capital) debts of the CIS countries to the Russian state (according to various sources during the decade from one billion to three) and its’ monopoly enterprises, the outbreak of war in Chechnya and the wave of the labour migration are evidences of the existence of the Russian imperialism. Soviet enterprises were relying on the movement of the value across the whole Soviet Union and it gave an advantage to the Russian capital, after the collapse of the USSR, in the economic campaign against former republics.

In order to understand the essence of imperialism, it is necessary to return to the analysis of productivity. Economic development is equivalent to the growth of the level of the nation’s productive forces, so, that it is possible to compare the level of different countries by taking, for example, some commodity produced in both countries and comparing the average quantity of labour’s time required for the production. The productivity will be lower in the country where the time, which is necessary for production of this commodity, is longer. Before the domination of industry emerged, there was domination of merchant’s capital on the world’s market and this form of capital got its profits by using this difference of the time production. The merchant would buy commodities in one country with more advanced production, consequently, with the lower prices of production, and served as a middleman with the less developed societies where those commodities were much more expensive. Thus, this method of trading was already the economic exploitation. When the industry has established its dominance, firmly linking itself with bank capital, an intermediation between societies on different degrees of development has become a movement of the financial capital, not just of the merchants. A financial form of capital is more adequate for money movements, which is ready to become a productive capital. Imperialism is interested in markets that allow it to sell the goods with a greater profit than in their home countries; it ensures a lower rate of declining profit at the expense of the less saturated market spaces. When imperialism is interested and actively searching for the sources of the cheap raw materials, manufacturers, in the less developed countries, poorly assimilate their own natural resources, therefore, imperialist influence spreads on this sector as well. Low level of development of productive forces also means low salary of labour power, so, the capital of the imperialist states gets an advantage in relation to the living labour on the territory of the oppressed countries, and in case of labour migration, to more developed countries.

Even in the Soviet Union, productivity of small nations was far behind from the communicative center. For instance, some data on the amount of GDP per capita suggests that there was a huge gap between Russia and its «fraternal» republics. In the 90s the Russian capital openly welcomed and caused economic degeneration in small republics because it allowed to continue its expansion with its own decline in production. While the international market is based on hierarchy, imperialism tends to preserve such an architecture by not allowing small nations to outrun the imperialist nation. Of course, the capital saves the essence of the moving contradiction, but at the same time it promotes development of some new technology, boosts the infrastructure and as a result simplifies the circulation of the value in the territory of a small nation. Therefore, one of the ideological «justifications» of such intervention — is the spread of the progress, of civilization, the eternal fight against the «barbarism». The difference in productivity is one of the reasons for the impossibility of full communism within national borders. Although, the national question on the planet still has not been completely resolved and requires a special approach; it would be foolish to assume the simultaneous coexistence of underdeveloped agrarian communism and the advanced industrial because the foundations of the imperialist exploitation and oppression have not yet destroyed. The world communist movement has do a lot of careful work in the established hierarchy of imperialism — to ensure alignment of the level of productivity in the world, overcoming difference between more agrarian nations and more industrial nations.

How did workers respond to the offences of capital in the 90s? In 1992 education had become one of the «zones» of the mass strikes. In April teachers and educators acted with a series of warning strikes and the requirement to increase the minimum rates of pedagogy sector. The other area of workers’ requirements was the coal industry. Workers of coal industry had shown themselves in strikes of 1988-1991  (Donbass, Karaganda, Kuzbass, etc.), which was one of the key points for the reorganization of the state and property when the Democrats — the supporters of perestroika — took advantage of the miners’ strike. Since 1992 continuation of the miners’ strikes necessarily included political demands to the Yeltsin’s government, in support of whom, not long ago, some miners screamed political slogans.

In 1995, dissatisfied workers, employed in different sectors massively joined the Federation of Independent Trade Unions of Russia (FITUR) and on the eve of the elections the major strikes demanded the resignation of the president and government again. Professional committees voted against nationwide strike, however, mass protests held in the period from 1 to 12 of April that forced the local authorities to make an appointment. Teachers’ and miners’ strike have renewed with the new vigor, which lasted almost an entire year. One of the sharp clashes was a spontaneous political demonstration of Bryansk’s machine-building workers, which followed with the overlap of the road and the deaths of two protesters.

The Asian crisis of 1997 showed that Asian countries had firmly incorporated into the world’s market and the high rates of capital’s accumulation turns into the crisis in no lesser  degree than in Western countries. Super profitability and inflation of the financial bubble has led to the expected results — overproduction in the real sector and the spread of the crisis on the global scale. For Russia, with its continuing decline in the industry, decline in the world’s oil prices and devalorization of a national fictitious capital, following Asia, resulted in one of the deepest crisis in 1998. Falling rates of the government’s securities, which were tightly related to the budget, could not be compensated by the profits of the industry and the foreigner investors had begun losing their confidence in the Russian economy, which meant the devastation of the most of the sectors and the depreciation of the ruble.

On the other pole of class relations, due to accumulated experience, miners had begun to act decisively again — in Kemerovo the famous «rail war» has started. The first strike committee consisted of administrators, which were loyal to directors, and that could not really defend the interests of workers. Later on there was formed the second strike committee that kept in touch with representatives of active workers in the area. By the beginning of actions, in addition to the miners, the railway was blocked by the representatives of the categories of the population who depended on the state support — state employees, pensioners and the unemployed. They demanded payment of arrears, termination of closures of enterprises without creating jobs and requalification first, as well as the dissolution of the government. Factory workers, who supported the protest, added to the requirements the return of free medicine and nationalized enterprises. In the following days, the strike was supported by the workers of other regions. The city and the local authorities were able to lure a coordinating council of Kuzbass and after several unsuccessful negotiations they had achieved a temporary truce. Most of the pledges had been not fulfilled and the blocking of the railway continued. Arrangements of the governor was met with distrust of the workers. However, a major strike was pressed down by the partial fulfillment of the original economic requirements.

A special should also be paid to the events that took place at the Vyborg Pulp and Paper Mill in 1998-2000. Since 1993, the enterprise was taken in the hands of a number of foreign owners, several times coming to their own bankruptcy and another sales on the auction — which was not uncommon at the time. The process of mass destruction of a large part of the production left behind on roadside a lot of workers.

After the final devastation, VPPM’s the workers, previously advocated for returning the factory to the state or for transferring to municipal ownership, had organized the trade union and decided to set workers’ control on the enterprise, which led to the formation of militia for the protection of the factory and to prevent owners from coming in, and then there was established the so-called «people’s enterprise.» On positions of responsibility were delivered people from the union leadership. The process could not be stopped even by direct power of state forces.

At first, workers really thought that enterprise belonged to them. However, after a while, there were problems with the payment of wages and as before the friction between «people’s director» and the trade union committee had begun again, the gap between the main mass of the workers and leaders of the «people’s enterprise» had increased. On January 16 of 2000, the firm «Altsem», which previously had resorted to the help of bailiffs and special forces «Typhoon» in order to fight off the property, had conquered the enterprise effortlessly. The labour collective had agreed and accepted the offer.

It is not a surprise that in these conditions factory’s workers, experiencing the burden of the crisis and fearing the results of privatization, had decided on the introduction of workers’ management. In the situation that portends the destruction of production, the workers had sought to save it themselves. This action had been quite controversial. Of course, very useful elements for the development of the labour movement may emerge in a similar activity. However, it is worth noting that a such behavior does not go beyond the scope of the enterprise, it is just a depersonificates of the capital, saving its’ essence and creating the sense of self-control. Capital is not the mode of management; workers still remain exploited, even if they perform functions of managers and owners. However, inspired workers soon encountered difficulties, as such as those problems that arose before and workers themselves, even reluctantly, opened the doors to the «usual» owner.

Conditions of crisis at the same time are also the possibility to overcome it. Termination of foreign investment provided enterprises of light and food industries some space on the market. Russia’s escape from the crisis was possible due to correction of the ratio of constant and variable capitals (the organic composition of capital). The volume of wage’s arrears decreased only to year of 2000. The budget had ceased to be financed by increasing debt and large inflation of the ruble. Thus, by entering 21st century country  was ready for a new development and foreign investment. The new industrial cycle was launched.

The question arises when looking back: could the shocks of the 90’s be avoided? Not all factors are reducible to the economy, the effectiveness of the state and its intervention plays a huge role. When Stalinists cry about the collapse of the USSR, they do not understand that the historical perspective was different. The preservation of the old state was possible only with liberalization like in China, with non-state access to the world market and reverse penetration of international commodities, or with a sharp slowdown in production rates. Crisis of overproduction could not be circumvented by any special literate management; therefore, the government’s administrative measures could not prevent the events of 1987-89, 1992 and 1998. Overproduction is always relative, whether capitalists increase or decrease production, or they transfer assets to the securities market or not; the disproportion between the production of goods and their sale is dictated by the mode of production. The real sector, with all the destructions of the significant part of it, showed its stability despite of administration. Weren’t government’s silly reforms caused by mystification that was created by commodity production? Whatever the economic experts of that time argued, the global market did not become a full-fledged replacement for the degrading industry and the fight against inflation only exacerbated the problem. The capital that is independent from production, acting solely as the capital of circulation — is nothing more but a myth.

The working class’ actions in the 90s in a large extent look as a resistance to the destructive side of capital, which prefers the least cost-price with a larger profit. Capital reorganizes the reproduction of capitalist relations, henceforth, the reproduction of labour power is not provided by the state owner as firmly as before. The proletarians were left on their own and had independently to integrate themselves into the renewed system of relations. The self-management at the enterprises in Yasnogorsk and Vyborg in the late 90’s are attempts of the workers themselves to occupy the vacant place of the industrial capitalist. Additionally, miners organized strikes against withdrawal of the mines’ subsidies, therefore, it was difficult for them to tear the thread that was connecting them to their workplace. Underground strikes and voluntary immurements demonstrated this moment very well. The transformation of the economy kept workers in their previous places, preventing them from requalification, decreasing the value of their labour power, and at the same time destroying their working conditions and burying the workers right at the workplace. The division of labour is more and more disastrous. A qualified unemployed person is not an oxymoron for Russia at all. Workers of the education system had achieved much less than miners and the true merger of these two areas of struggle had never happened — strikes in educational institutions reached a peak in 1999 when all production sectors already experienced a decline of movement.

And if the political demands of 1989 and 1998 were radically different, they did not go beyond the framework of bourgeois relations. Betrayal by the most of their delegates and public representatives in the «rail war» is not a such surprising fact. In the process of strike, the worker’s attitude towards his or her owner and superiors is covered by a multilayer veil of ideology. Therefore, support for Yeltsin in the late 1980s and the demand to resignation of Yeltsin in 98 on a deep level is the same kind of struggle in which the worker still has a hard time understanding his opposition to exploiters and the need to organize proletarians into a political class. The practical initiatives of the workers of Donbas, Kuzbass and Karaganda to create their own committees and squads in the late 80’s and their critical attitudes towards the state apparatus were not transformed into an act of taking power. The strikes of the 90s were stuck at the stage of organizing the proletariat. The process of forming a communist party, with a class content and a program, is not independent from the formation of a whole class. The dissolution of the government from the point of view of the working class power is meaningless without a proletarian party, although, the formation of the party can include periods of bourgeois revolutions (coup d’etat). Other structures-the national federations of trade unions, the social-democratic parties-will keep the proletariat in the position of a citizen of a certain profession in any enterprise because they need a commodity economy and not its destruction by a united class. Reformism does not contrast with commodity fetishism, since the status of a miner in a collapsing mine or the status of a teacher, or doctor in the state institutions and their separation, and estrangement from one another in the form of abstract individuals are presented as a natural state of things, as a commodity production in general. The «rail war» took a step towards overcoming the alienation dictated by its own enterprise and profession, although this was not enough, the direction of struggle was emerging: the unification of workers of different professions. It is often undermined by indecisiveness or engaging hostility of permanent work organs like trade unions. The existence of capitalist relations that dehumanizing and enslaving workers will push them to the realization of communist transformations. The economic struggle is only the germ of a real class struggle. The destruction by the proletariat of its own conditions of existence begins with a violation of attachment to the workplace, with the formation of the unity of the class, with the emergence of its party, from an organized action that goes beyond the economic requirements of particular professions or of separate enterprises.

 

 

2000-2015

The new productive industrial cycle immediately makes itself felt in other social relations — there are the change of the president, the political orientation to other principles of governance (taxation, intervention in the market), the ostentatious fight against corruption, the resumption and victorious completion of military operations in Chechnya, etc. Opportunity to pay off foreign debts was opened.

The decline in productivity in the 90’s for capital is offset by the adoption of the law on overtime work in 2001, which provides an opportunity for flexible exploitation. Employers got a chance at their own discretion to squeeze out the extra working hours from working people. The real state of affairs differs from the one described in the law because until now a large proportion of overtime labour is not registered in any way.

The boundary between formal and real subordination of labour to capital is not sharp and distinct. There is a gap in which both absolute and relative surplus value are simultaneously extracted. Therefore, in the 2000s, the behavior of capital is so ambiguous from the point of view of periodization according to the criterion of formal / real subordination of labour to capital. Russia did not plunge into dominance of formal subordination of labour to capital, but made a step back from real subordination with high-level of production because the industry that was built in the USSR survived the destructive power of capital itself, of its independent movement. Machine production has not disappeared, and the social nature of labour has not weakened at all. The growth of the middle classes, floating unemployment, the merging of large capital with the state, machine production — these are all signs of intense exploitation, but which has partially turned into the prolonged working day, into the method that is characterized by an extensive exploitation. The increase in working time, for example, through increasing the retirement age, can be seen in developed countries with a predominance of real subordination of labour to capital. Russia is involved in the world market, so even those enterprises that continue extensive accumulation, inevitably go to the intensification of labour at the expense of foreign investors and of competition with world producers.

Another sign that is characteristic of the real subordination of labour to capital — the desire to control all the secondary factors of the reproduction of the labour power and its sale — can be seen in the example of a federation called the FITUR, the “Federation of Independent Trade Unions of Russia”. This organization appeared in 1990 as a breakaway from the «All-Union Central Council of Trade Unions», then, after the dissolution of the latter in the following year, 1991, it actually became its successor and «inherited» property, estimated, according to various sources, up to 6-7 billion of dollars. A significant part of this property was sold. Being already initially tied to the capital (while still showing some kind of independence — the organization of many strikes, support for the «rail wars» of the miners of Kuzbass and the state employees who joined them, pensioners and unemployed) in 2000s the FITUR stepped even further, directly integrating into a bourgeois state and supporting power. Now FITUR has its own business, it officially belongs to the All-Russian Popular Front. If some lower workplace cells of federation display themselves relatively boldly, then it is not due to, but contrary to the general policy of the FITUR.

From 2000 to 2007, industrial and agricultural production experienced a strong recovery with an average annual increase in production of 6%. Last but not least, this was due to the influx of European and American capital. But level of industry did not reach the level of 1991.

Even when industrial and banking capital unite in the form of state corporations, there is still a disproportion between the rest of the industry and the financial sector. With a high GDP Russian production lags far behind the world market leaders. Crediting and financing of industrial capital by national banks, on the one hand, should accelerate the creation of a material basis for a new mode of production, сcommunism, but on the other hand, this basis has a lesser scale in comparison to the basis of the more developed countries because Russian medium and small capitals have to turn to foreign banks.

The crisis, which began in 2007 in the US, has become one of the most large-scaled crises in recent history. The congestion of fictitious capital made itself felt in arrears of the payment of the real estate loans and helped spreading of the overproduction in the automotive industry and further in the entire global economy. In Russia, since May of 2008, with the outflow of foreign capital and the termination of access to foreign loans, the main blow was taken by non-state firms and corporations. The main «pit» of industrial production indicators was observed in 2009, which triggered a new response of protest cycle. One of the high-profile cases were performances in Pikalevo where 5,000 workers were threatened with a mass dismissal. The workers’ activity (road closures, strikes) forced the state to restore jobs, despite the fact that the work of a single complex of enterprises of Pikalevo looks unprofitable for the capitalists.

Further development of protests was after the end of the crisis in 2011, and had a different essence. The crisis revealed the natural isolation of the act of production from the act of circulation, which together constitute the cycle of reproduction of capital. The state as an element that appropriates differential rent in various forms, actively manifested itself in the second act, in the moment of the division of the produced surplus value. Therefore, the state looks like a corrupt state in the eyes of small and medium-sized entrepreneurs, as well as of the middle classes. The political will of the rulers in the face of the “United Russia» party represents the economic situation of Russian reality, hence the clear democratic direction of the protest movement, the demand for fair elections, the restoration of political games on equal terms, etc.

Corruption (insider rent, administrative rent, etc.) is explained by many analysts by the current Russian management system, which supposedly stands above economic growth, although this implies the idea of ​​taming the blind law of value by the state and the real owners of state firms, which is simply impossible. The lag in the growth rates of industry from the level of developed countries reproduces the appearance, the illusion of the absence of conditions for capitalist production. This is the reason why many liberals raise the idea of ​​the neo-feudal nature of Russian society, they are often echoed by left-wing ideologists, expressing similar thoughts in quasi-Marxist terms.

If the corruption is prevailing source of profit, if the real sector does not get the necessary value for accumulation, as some may say, then where does the extracted mass of value come from? The answer lies in the fact that speculation, theft, bribery do not increase the total social value, but only redistribute it. The process of creating value occurs all the same only within the framework of production relations in which wage labour and the real subordination of labour to capital dominates.

Entrepreneurs and shareholders, creditors, officials, etc. in the final accord, participate in a play, the scenario in which is the movement of capital in all the diversity of its forms. Their visible and actual remoteness from each other is determined by the social division of labour, the contradictions among themselves are disharmony of commodity production, of money circulation and the clash of capital. Rent, which is seized by the state, is a huge bureaucratic machine that is being formed by years, it takes a specific form and does not go to the budget. The mission of the bourgeois state is to keep the nation in check, to ensure that the political unity of the territories with a whole series of contradictions of classes, cities, villages, territories with high population density, distant places of residence, foci of extraction of natural resources and infertile lands in order to control all that is subject to capital or, conversely, is at an earlier stage of development due to the fault of capital. The bureaucrat bites into the acquired and gained over the years of exploitation and robbery because this is a guarantee of his position. Politics in this type of state is purely commercial enterprise. In these historical conditions, bureaucratic services, as a part of the cost of circulation, becomes more expensive, inflating more and more, but the official salary of a civil servant is more or less fixed, so part of the payment is informal and is called a bribe, a kickback. Corruption reveals political speculation because the state representatives act against their laws. Corruption hides economic speculation because the growth of the period of turnover of industrial capital contributes to belated compensation for the aggregate social capital, stimulating excessive demand for goods that are needed for the reproduction of labour power (for example, housing) and overloading money capital. Indeed, speculation extends on many other spheres of life. The movement of the labour is suffocated for the purpose of inflating rent and private profit (pressure on labour migrants, state privatization of RRR “Russian Rail Roads”, etc.).

The oil sector of the economy is a huge space for accumulation mostly because oil is the raw material given by nature. The capitalist gets the opportunity to bring to the market a commodity in which the individual value (the amount of labour used in this enterprise) and the social exchange value (the relation to other commodities) do not coincide. For example, differences in labour inputs, in the convenience of geographic location and in fruitfulness between land plots are reflected in ground rent, part of surplus value. The same applies to an opened oil field. However, in this industry there are difficulties connected with the exploration, development, exhaustibility of subsurface resources, climatic conditions and geographical remoteness. Nationalization of natural resources gives a chance to transform an absolute rent into differential rent in hands of the state. All oil enterprises differ in these cost-prices.  Since oil is sold on the foreign market, its price is rising due to the sale of oil from «bad» fields and low-tech oil platforms and to the corresponding fluctuations in natural rents.

It is not worth thinking that bloated money bags that have been able to levy differential rent through their posts are capable of rational social settlement. The broken asphalt between settlements is a vivid demonstration of the duality of the development of social capital, how aggregate capital saves on the costs of circulation (transportation expenses), and how road construction firms make regular profitable deals by laying a short-lived roads, all of this is the «natural» aspirations of capital to a reduction in cost-prices and to self-reproduction. Taking on the role of the cumulative capitalist for capital and the herald of the abstract «people», for citizens, the bureaucracy immediately discredits itself in the confrontation with nature — extremely high heat and wildfires (2010-2012) that led to smog in Moscow (2010), floods in The Krasnodar region (2012) and the Far East (2013) did not find a worthy answer. The Leviathan of a bourgeois state is not capable of rational cognition of the nature and the organization of production on the basis of human needs and overcoming disharmonies. The capitalist society is not interested in forecasting the problem, rational correction of natural conditions, preparation of the society and its infrastructure for climate fluctuations, etc., unless it helps the turnover of capital. Each river could be studied in order to analyze the possible danger of flooding nearby territories and take appropriate measures in this regard, as well as for the use as source of energy or water for irrigation, and other economic needs, but property relations block the work of social consciousness and take an actions of social nature. Hydrological engineer Nikolai Soldatov said that during the flood in Krymsk the place of natural outflow of water was given to the private owner for construction. Disasters accompany the capitalist mode of production, nature accurately hits the poorly protected places of society. In Krymsk the estimated damage from the flood is about 20 billion rubles + direct compensation to people who suffered from it. More adaptive to disasters American capital knows its own worth; in 2012, Hurricane Sandy brought about $ 60 billion in damage. In the context of the contradiction of capital between valorization and devalization, in both cases there was an allocation a reserve for a number of curcuits of reproduction of value. Merchants and capitalists can mourn for the dead, but capital only welcomes a new demand for its commodities.

Is it possible to completely get rid of a kickback and bribe within the capitalist mode of production? Only with its open legalization. Liberal leaders of the opposition can refer to the theory of a social contract in their rhetoric in order to convict the current state power in its inconsistent, but the bureaucracy acts quite naturally in the prevailing historical conditions. Capital fills those spaces that bring growth to it and administrative posts are a part of these spaces. The liberals, as the spokesmen of special class interests, are fighting corruption because they want to reduce the pressure on surplus value. They find support among the middle and petty bourgeoisie, as well in the new middle classes, which are attracted to the wage labour, nevertheless, they are unproductive workers who consume redistributed surplus value created in other spheres. The interests of workers in the protests of 2011-2012 — expropriation, destruction of all property and assignment — remained unconscious for the entire movement, although the emergence of the social column of the working minority was a real achievement. The communist program can be partially open to the masses through «instinctiveness» and spontaneity.

Recognizing that the general direction of the movement has remained in the bourgeois field, it is incorrect to reproduce the popular myth of the overwhelming predominance of the bourgeoisie and the secured middle classes on street rallies. The statistics that are available to us indicate a fairly disorganized composition of the movement, while it gives a little information about the class contrast, only about the revenues. People with low incomes accounted for about half of Moscow’s protests and three-fourths in regions. Blurriness of the movement is generated by a multilayered social relations and ideology also provided a blurring of the social positioning of the protesters.

The world’s practice of the modern protests in the “Occupy” form has found its place in Russia. Liberal leaders lost their weight before the emerging «collective brain» of Occupy Abai, with all its shortcomings (democracy, consensus). Occupy Abai is a real criticism of public life, where the middle classes and student youth gained their communal experience there. The seizure of the urban space, Twitter-mobilization and similar social activity are typical for the majority of «occupiers». The demand for a transformation of life for the population was expressed through the restoration of democracy; the movement itself had rose with outrage about the falsifications of parliamentary elections, therefore, the original Occupy Wall Street is a more «social» phenomenon compared to the Occupy Abai. On the basis of the premises, the Russian protest was closer to the Arab Spring, which is part of the global wave of riots directed against openly dictatorial corrupt regimes, but the prospects for a clash of Russian protest forces with the party of order were curtailed by the frank weakness of the movement — pacifism, weak coordination in the regions, etc. On the other hand, the attack of the lower classes on the status of ownership in similar movements meets with rejection by the middle classes. The communal practice of the «occupiers» is in itself an insufficient condition for the transformation of society. Street self-organization does not ensure the success of the commune. It provides only a few small possibilities of assistance for the formation of a political subject, the formation of a class party that is capable of seizing power, destroying bourgeois institutions of power and radically changing the mode of production through the abolition of value.

The protests of 2011-2012, like the other «occupies», are similar to the events of 1848 in Europe — in both cases it is the movement of interclass cooperation, the clash of different class interests, of different «socialisms», of vectors of criticism of social order. The workers who are participating in bourgeois revolutions are gaining the experience of class antagonism; they discover that other classes are not capable of bringing true liberation and freeing from the conditions of wage slavery. The emancipation of workers must be conquered by the workers themselves. All other class interests still lie in the plane of the capitalist mode of production, so going beyond the mode of production requires isolation of other classes, the dictatorship of the proletariat.

It should be said that apart from the «general opposition» protests in Russia in recent years, there was also some trade union activity of workers and layers close to them. Despite the fact that on the whole activation of workers’ associations in Russia today is not high and remains within the framework of the economic struggle, it often encounters strong opposition from the bourgeois state. In particular, one of the most notable of these demonstrations was a strike at the Kaluga plant «Benteler» at the end of March 2012. In the course (and also after) of the strike, pressure was exerted on activists, the Special Purpose Mobility Unit was drawn to the plant.

Privatization still causes problems for workers and their families. The redistribution of property causes social conflicts in the housing sphere, when the new owner appropriates the place that once was occupied by the Soviet enterprise for the workers’ residence. Examples of this are incidents of eviction from dormitories, the most notable of these was the case with the “Moscow Silk” in early 2013. The owner planned to take away the building of the dormitory, in which people who worked at the enterprise lived. With the participation of public activists, the tenants kept the defense from the onslaught of the waged  private security company, which on January 19 resulted in a serious fight that entailed court cases against two activists. In the end, the tenants were evicted.

The fact that democracy does not exclude the police state, but it is equivalent to it, it is a proof of the contradiction between capital and the proletariat. Even in bourgeois-democratic revolutions, Communists should not behave like democrats. The conquest of specific political freedoms is secondary to the tempering of the potential proletariat, the political class, which is in opposition to all present social forms, including the democratic one. The majority of the leftists in Russia raise the issue of class organization in the educational spirit, therefore, they remain connected with democratic formalism. They explain all the reasons for the defeat of the workers as the lack of class consciousness and the solution is mistakenly outlined in the wild leftist activism, attempts to spread this necessary consciousness.

After six years of the last crisis, Russia participates in military operations in the east of Ukraine. Previous crises also coincide with armed conflicts in which the Russian Federation participated because an attempt of an imperialist solution of the contradiction of valorization / devalorization consists in an increased pressure on external exploitation. The current Russian crisis is often associated with sanctions, but such an explanation is not sufficient enough. The industrial cycle have been already approaching a critical explosion. The fall in oil prices affected about a third of the entire economy of the Russian Federation. A partial economic isolation of Russia of today was revealed by the fact that the country was closely connected with the world market, therefore, the crisis could touch to the countries of Europe.

The ruble is still busted. The authorities speak of compensating for economic growth in agriculture, not as import-dependent as other spheres of production, but the agrarian economy is already experiencing the consequences of devalorization.

Now the ruling class is imposing on the population the idea of ​​confronting world’s market (with the exception of China for which have been made concessions in trade) in the form of the conspirological ideas of the «Russian world» and the «global conspiracy against Russia».

Predicting the future course of events is not that simple. There is a drop in real wages, squandering of the pension fund and as a result — a slight increase in the activity of workers in the budgetary sphere (medicine) and in production. To the same extent, the reactionary imperialist movement has risen, can it suffer a defeat after the economic catastrophe of Russian imperialism?

The real solution to the problems of Russian society can only be the destruction of capital and wage labour. Only the communist movement can undermine the foundations of existing contradictions. Unfortunately, most of the left-wing forces in their programs do not cease to support the mystification of the capitalist mode of production-illusions about democracy, the fetishism of the forms of organization (councils, assemblies…), the mythologization of the USSR, formalism in the national question, antifascism, party building, enlightening activism, etc. The reason for all of this is a complete absence of the workers’ political struggle. The mystifications of the modern russian society are generated by the peculiarities of the historical development of capital — in-depth financialization (growth of the debt loads and fake dominance of finance capital over industrial capital), the massive collapse of the Russian real sector of the economy, and in addition, the defeat of the movement in the 20th century. The new world riot movement only opens up prospects for the proletariat to restore the program and class practice.

If we turn to the basic contradiction of labour and capital, the question will inevitably arise: is Russian society ready for a new mode of production? Among the actual objective conditions for communism are the very fact that the capitalist mode of production meets limits, productivity is decelerated by a fall in the rate of profit / by devalorization, and the matrix of human relations is experiencing a severe blow due to the difference between the passion for accumulation and social needs. Lagging of Russia from more advanced countries does not mean that Russian workers must wait for development, postponing the communist project for later. Uniform development of capital in all parts of the world is impossible. Therefore, the tasks of communism cannot be put on narrow national scale. The problems of the backwardness of the small republics, that today are oppressed by Russia, are problems of the Russian workers, the problems of Russia’s backwardness are the problems of the proletariat of the whole world.

The communist program should be restored and implemented through thousand difficulties of modern social relations. The whole structure of the life organization must be changed in the majority of its spectrums — in the national (by stopping the oppression of colonies and international wars), administrative (dissolution of the old state, arming workers, seizure of information organs, social education), geographical (overcoming the city and village, overcoming the congestion of transport network ), economic (the expropriation of property, reduction of working hours, the reduction of the surplus product), class (proletarianization of the unproductive classes, prohibition of wage labour), productive (planning introduction in physical units, the actual destruction of capital, wage labour, exchange and value) directions. Only in these conditions mankind forms an organic community, which is directly exchanging with nature and all material produced by man will be directed directly to his benefit without any mediation of classes, state, wage system, trade and speculation.

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