Socialist accumulation
Encyclopedia
Socialist accumulation was a concept put forth in the early Soviet Union
as a counterpart of the concept of primitive accumulation of capital
that took place in previous capitalist economys. The concept was proposed as a means to industrialize the Russian economy of the era through state capitalism
, because the Russian economy was too underdeveloped to implement socialism at the time.
The major proponent of the concept was Yevgeni Preobrazhensky
, in his 1926 work The New Economics, based on his 1924 lecture in the Communist Academy
, The Fundamental Law of Socialist Accumulation. The concept was proposed during the period of NEP
. Its main principle is that the state sector of the mixed economy of the transitional period has to appropriate the peasant's surplus product to accumulate resources necessary for the growth of the industry
. To this end, the major mechanisms were the foreign trade monopoly held the state and price control in favor of industry (in effect, "price scissors
")
This theory was criticized politically and associated with Leon Trotsky
and the Left Opposition
, but in fact was put into practice by Joseph Stalin
in the 1930s, as when Stalin said, in his speech to The Captains of Industry, that the USSR had to accomplish in a decade what England
had taken centuries to do in terms of economic development in order to be prepared for an invasion from the West.
Beyond lectures and textbooks, however, this theory affected the working class as well. Real wages for both regular workers and managers plummeted, despite the growing wage differential. Also, Soviet penal policy tightened, causing a significant growth of inmates in the Gulag
. It was not until after Stalin's death that a minimum wage
was introduced and mass rehabilitations resulted in the dissolution of most of the gulag system.
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
as a counterpart of the concept of primitive accumulation of capital
Primitive accumulation of capital
In Marxist economics and preceding theories, the problem of primitive accumulation of capital concerns the origin of capital, and therefore of how class distinctions between possessors and non-possessors came to be.Adam Smith's account of primitive-original accumulation depicted a peaceful...
that took place in previous capitalist economys. The concept was proposed as a means to industrialize the Russian economy of the era through state capitalism
State capitalism
The term State capitalism has various meanings, but is usually described as commercial economic activity undertaken by the state with management of the productive forces in a capitalist manner, even if the state is nominally socialist. State capitalism is usually characterized by the dominance or...
, because the Russian economy was too underdeveloped to implement socialism at the time.
The major proponent of the concept was Yevgeni Preobrazhensky
Yevgeni Preobrazhensky
Yevgeni Alekseyevich Preobrazhensky was an Old Bolshevik, an economist and a member of the Central Committee of the Bolshevik faction and, its successor, the Communist Party of the Soviet Union.-Life:...
, in his 1926 work The New Economics, based on his 1924 lecture in the Communist Academy
Communist Academy
The Communist Academy was founded in Moscow on June 25, 1918, as the Socialist Academy; it was renamed in 1924...
, The Fundamental Law of Socialist Accumulation. The concept was proposed during the period of NEP
New Economic Policy
The New Economic Policy was an economic policy proposed by Vladimir Lenin, who called it state capitalism. Allowing some private ventures, the NEP allowed small animal businesses or smoke shops, for instance, to reopen for private profit while the state continued to control banks, foreign trade,...
. Its main principle is that the state sector of the mixed economy of the transitional period has to appropriate the peasant's surplus product to accumulate resources necessary for the growth of the industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
. To this end, the major mechanisms were the foreign trade monopoly held the state and price control in favor of industry (in effect, "price scissors
Price scissors
The price scissors is an economic phenomenon when for a certain group or sector of productive population the overall valuation from their production for sale outside this group drops below the valuation of the demand of this group for goods produced outside the group after a period of reasonable...
")
This theory was criticized politically and associated with Leon Trotsky
Leon Trotsky
Leon Trotsky , born Lev Davidovich Bronshtein, was a Russian Marxist revolutionary and theorist, Soviet politician, and the founder and first leader of the Red Army....
and the Left Opposition
Left Opposition
The Left Opposition was a faction within the Bolshevik Party from 1923 to 1927, headed de facto by Leon Trotsky. The Left Opposition formed as part of the power struggle within the party leadership that began with the Soviet founder Vladimir Lenin's illness and intensified with his death in January...
, but in fact was put into practice by Joseph Stalin
Joseph Stalin
Joseph Vissarionovich Stalin was the Premier of the Soviet Union from 6 May 1941 to 5 March 1953. He was among the Bolshevik revolutionaries who brought about the October Revolution and had held the position of first General Secretary of the Communist Party of the Soviet Union's Central Committee...
in the 1930s, as when Stalin said, in his speech to The Captains of Industry, that the USSR had to accomplish in a decade what England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
had taken centuries to do in terms of economic development in order to be prepared for an invasion from the West.
Beyond lectures and textbooks, however, this theory affected the working class as well. Real wages for both regular workers and managers plummeted, despite the growing wage differential. Also, Soviet penal policy tightened, causing a significant growth of inmates in the Gulag
Gulag
The Gulag was the government agency that administered the main Soviet forced labor camp systems. While the camps housed a wide range of convicts, from petty criminals to political prisoners, large numbers were convicted by simplified procedures, such as NKVD troikas and other instruments of...
. It was not until after Stalin's death that a minimum wage
Minimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
was introduced and mass rehabilitations resulted in the dissolution of most of the gulag system.
See also
- Capital accumulationCapital accumulationThe accumulation of capital refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is money or a financial asset invested for the purpose of making more money...
- CapitalismCapitalismCapitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
- State capitalismState capitalismThe term State capitalism has various meanings, but is usually described as commercial economic activity undertaken by the state with management of the productive forces in a capitalist manner, even if the state is nominally socialist. State capitalism is usually characterized by the dominance or...
- Economy of the Soviet UnionEconomy of the Soviet UnionThe economy of the Union of Soviet Socialist Republics was based on a system of state ownership of the means of production, collective farming, industrial manufacturing and centralized administrative planning...
- Scissors CrisisScissors CrisisThe Scissors Crisis is the name for an incident in early Soviet history during the New Economic Policy , when there was a widening gap between industrial and agricultural prices...