CHAPTER 8

PRODUCTION ON AN EXTENDED SCALE, OR ACCUMULATION

PART 2

The Application of the Accumulation Fund

The foregoing observations lay claim to possessing no more significance than that of theoretical generalisations, in the sense that they show how accumulation can and must be fully and consciously regulated and integrated with the Factor of Individual Consumption. Should it not be so integrated, the addition of a price increment becomes unavoidable - in other words, the actual production times will become concealed. Furthermore, in a year in which a higher rate of accumulation has been achieved, say 10%, a correspondingly longer production time will be required than in a following year in which, for instance, only 5% accumulation is attained, the general conditions of production remaining the same. Thus, in such a case, we have fluctuating production times, causing unforeseeable complications in the production budget and in the distribution of the product. The means and methods according to which the deduction on account of accumulation is to be implemented are thus decided and resolved within the economic process itself; they are prescribed by the very laws of motion which underlie the production of the product stream itself. For that reason their movements are circumscribed within firmly defined limits.

The determination of the rate of accumulation, on the other hand, is not implemented through the material process of production as such, but can be determined in a variety of ways. In our above example we have assumed a general expansion of the productive apparatus by 10%. There is thus made available out of the general accumulation fund a factor of 0.1(P + C) for the extension of means of production in each productive establishment. A special instruction from some authority or other is not required. The objective course of production itself reveals quite clearly the amount for any claim of a withdrawal from the accumulation fund put forward by any one productive establishment.

To conceive of an expansion of the productive apparatus at a unified rate amounts, however, to an unreal assumption. In reality there will be branches of production which require no extension whatever, others for which a rate of accumulation above the average rate per cent is necessary. For this reason it will be seen to be a useful principle that only those productive establishments which require expansion should be allocated an accumulation fund as a part of the general GSU budget.

Nevertheless, the political and economic conditions prevalent during the early inceptive period of communism will make it imperative that the proletariat keep tight hold of its right even to an irrational mode of determining and allocating accumulation, if in its immaturity it occasionally so decides. The decisive factor is that, in the absence of a central authority exercising the right of control over production, there can also be no central authority exercising control over accumulation - in this sphere also the right of control must lie in the hands of the producers themselves.

An example of an irrational mode of allocating accumulation would be, for instance, if each productive establishment were to receive an increase of 10% in (P + C) without any account being taken as to how much of this expansion was really necessary at any given stage of economic development. Should such an industrial establishment form part of a production group or "guild", the practical outcome of the application of such a measure would be that the associated industrial establishments would together take steps to form an accumulation fund for the entire guild. The relevant industrial organisations would then decide according to what method and to which industrial establishments that fund would be applied. In one case they could decide that underproductive establishments should be better equipped in order to enable them to reach the average level of productivity, whilst in another case a more rational decision might be to not add any new material resources whatever, and instead to take measures to eliminate the relevant establishments altogether. The power to enact these decisions must, however, lie in the hands of the producers themselves if a situation is to be avoided in which a screwing up of productivity is directed against their interests, as occurred in Hungary. In each and every such case an extension of production or any increase in productivity - factors which stand in organic association with a quantitative extension of the productive apparatus or a qualitative improvement in its technological level - must be the result of consciously determined measures taken by the producers themselves.

Furthermore, it is also possible that an entire production group requires no extension whatever of its productive plant and equipment, because it is already fully capable of satisfying all demands likely to be placed upon it by society. In such a case in would be possible for the relevant industrial organisations to adopt a decision to place their entire accumulation fund at the disposal of those industrial establishments which stand in need of an exceptionally large degree of expansion.

In the early inceptive period of a communist economy, it is likely that decisions not to engage in accumulation would occur quite frequently. For communism will require a different disposal of industrial resources to those which we know today. Many types of factories will become superfluous, whilst in the case of others there will be too few. With the establishment of a communist economy, the subordination of production to real needs is brought to the forefront of attention; a colossal organisational and technical labour is then commenced upon, which almost certainly will not proceed without its disagreements and frictions. Thanks to the twice and thrice-blessed "market mechanism" so beloved of capitalism, which allegedly has matched production to needs for centuries, the proletariat is, at the very moment of its assumption of social power, burdened with a productive apparatus in which at least half of all labour-power required to be expended in its operation is wastefully and unproductively applied, and which is matched not to the real needs of millions of workers, but only to their intrinsically limited purchasing power:

"A larger part of the workers employed in the production of articles of consumption which enter into revenue in general, will produce articles of consumption that are consumed by - are exchanged against the revenue of - capitalists, landlords and their retainers; state, church, etc.) and a smaller section will produce articles destined for the revenue of the workers. ... The workmen, if they were dominant, if they were allowed to produce for themselves, would very soon, and without great exertion, bring the capital (to use a phrase of the vulgar economists) up to the standard of their needs." ( K. Marx: Theories of Surplus Value, Part 2, Chap. 18; trans. by R. Simpson; Lawrence & Wishart, London, 1969; p.580)

The conversion of production to the satisfaction of needs thus brings with it as its necessary consequence the transformation of the entire productive apparatus. Those industrial establishments working solely for the satisfaction of the ephemeral luxury requirements of the bourgeoisie are closed down, or are reorganised as quickly as possible, so as to enable them to satisfy the needs of the workers. Just how rapidly such a re-organisation can be carried out we have been given an opportunity to observe during the War and in the years immediately following it. In the first case the greater part of the productive apparatus was converted to the production of war material, only to undergo reorganisation once again after 1918 for the purposes of "production for peace". Further, let it be noted in passing that capitalism itself in not above switching off its famous market mechanism whenever the task becomes that of organising production for the satisfaction of its "special needs" - particularly those of war!

The organisational transformation to a communist economy can, in spite of the colossal attendant difficulties, be carried through relatively rapidly, whereupon the satisfaction of such staple needs as clothing, food and housing become the decisive factors. For one thing, it is likely, particularly in the early stages of a communist society, that an appreciable portion of total productive resources will be applied directly to the production of those materials which find application in the construction of housing and living accommodation - a perennially scarce resource in proletarian life under capitalism, and which, under communism, would need to be expanded as rapidly as possible. Expressed in brief: the entire productive apparatus undergoes a fundamental transformation according to need, as this is expressed through the instrumentality of the consumer cooperatives.

The first and inceptive stage of communist production will thus be characterised by the pronounced growth of certain branches of the economy and an equally pronounced shrinking of others. Under these circumstances, there will be no question of a homogenous and uniform rate of accumulation for all sectors of the young communist economy. Nevertheless, irrespective of any muddle which might quite likely attend the feverishly rapid conversion of the economic base, the proletariat should not allow itself to be seduced into renouncing its foremost birthright: its right of disposal over the productive apparatus and the accumulation fund. Even a possible uneconomic or irrational mode of allocating the latter would be justified if it was found to be an unavoidable outcome of serving and applying that higher principle.

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