[Continued from Part 1]
2. The central choice in the Soviet economy
From the fact that it was not possible to resolve all contradictions within the Soviet economy on the basis of the economy of one country, however, did not follow that nothing could be done in the USSR itself. Quite the contrary, from the difficulties it flowed that everything possible should be done. The point was simply that socialism in one country and the classic Marxist analysis outlined by Trotsky led to diametrically opposite conclusions as to what should be done. As Trotsky noted: ‘In general, within the boundaries of a single nation, it is impossible to completely overcome the difficulties resulting from the delay in the world revolution. This should be said clearly, firmly and honestly, in a Marxist and Leninist way. But although the fate of the revolution is a function of its international character, it does not follow that the party in each country is relieved of the duty to do the maximum in all areas. On the contrary, this obligation only increases, because the economic errors made in the USSR not only retard the building of socialism in our country, but strike in the most direct way at the world revolution.’ 
He noted: ‘A [genuine] left course could not promise to build “full socialism” by our efforts alone. It could not even promise a complete triumph over the contradictions within the country, as long as world contradictions exist. But it could gradually establish more correct control over the domestic class contradictions – more correct from the standpoint of socialism under construction. It could quicken the rate of growth, through a more correct policy of distributing the national income. It could consolidate in a more systematic and serious way the proletariat’s hold on the commanding heights of the economy.’ 
Above all what was at stake was the goals of economic growth. In the Stalinist programme, economic growth was to lay the basis for a future socialist society created in one country. From the approach of Marxism and of Trotsky this was impossible. The aim, instead, must be to improve the living standards of the working class to consolidate its support for the Soviet state, increase its attractiveness to the international working class, and thereby create the best base for the international extension of socialism. Or as Trotsky put it: ‘The tempo of industrialisation must guarantee, not the building of national socialism, but the reinforcement of the foundation of the proletarian dictatorship and the improvement of the conditions of the working masses of the city and countryside.’ 
The core issue was that economic policy within the USSR must be dictated not by the utopian goal of constructing socialism in one country but by the most rapid sustainable rise in the living standards of the working class. The ‘reactionary utopia’ of socialism in one country directly cut across this.
The domestic consequences of socialism in one country
The programme of socialism in one country was, in reality, no more neutral in its effect than in its international policy. It dictated a thoroughly wrong allocation of resources within the Soviet Union – and its economic consequences directly undermined the political support of the working class for socialism. The economic project of ‘socialism in one country’ directly strengthened reaction. As Trotsky put it: ‘Theoretically, politically, and psychologically, the idea of the five year plan has become for the masses the problem of the construction of a Chinese wall around socialism in one country. The workers find this the only justification for the extreme tension imposed on them by the party apparatus.’ 
As soon as it became clear that such a project of socialism in one country could not possibly succeed there would inevitably be a violent reaction against the senseless privations the masses had been asked to endure in its name. As Trotsky noted: ‘It is obvious that if it were really a question of outstripping the advanced capitalist countries in the next few years and in this way insuring the invulnerability of the socialist economy, then temporary pressure, however wearing on the workers, would be understandable and justifiable. But we have seen the ambiguity, deceit and demagogy with which this question is presented to the workers. The continuous pressure threatens to provoke a reaction among the masses incomparably graver than the one that developed at the end of the civil war.’ 
Indeed, as an inevitable consequence of socialism in one country, Soviet reality was painted in a light that not only was palpably untrue but which would demoralise the masses. ‘False theory inevitably brings mistakes in policy. From the false theory of “socialism in one country” flows not only a distorted general perspective, but also a criminal tendency to paint up the present Soviet reality.’  We will consider these issues point by point.
Light and heavy industry/consumer services
The first, and most central, issue concerned in the ability, or otherwise, to build socialism in one country was that it directly dictated both the type and tempo of economic growth which was aimed at in the USSR. If it were conceived that socialism could be constructed in a single country, the USSR, then the foundation had to be laid in the present. Given the nature of productive processes this meant that, in a self-enclosed economy, absolute priority must be given to heavy industry – in order to produce refrigerators it is necessary to have steel, in order to produce consumer goods there must be machine tools, to run industry electricity must be produced. Indeed for a socialist society, with a higher development of the productive forces than capitalism, quantities of such resources even exceeding capitalist society would be required.
The conception of building socialism in one country therefore led, necessarily, to a total priority on heavy industry – coal mines, steel plants, dams etc – so characteristic of first Soviet and then East European economies. These were conceived as laying the foundations of the future socialist society constructed in one country.
Such an absolute priority to heavy industry, in turn, necessarily meant diverting resources from other sectors. It meant that consumer services, housing etc would be produced to a much lesser extent than possible – producing exactly the superfluity of heavy industry and shortage of every type of consumer goods and services which became typical in Eastern Europe.
Indeed, the type of shortages seen in the USSR graphically illustrated the type of economic errors which flow from socialism in one country. Even if the correct economic orientation had been pursued, that is, one aimed at raising the living standards of the working class, this of course would not have removed all economic difficulties in countries which were economically backward and subject to capitalist encirclement. Priority to consumer goods and services requires a development of heavy industry to supply them. With a correct orientation to prioritising consumer goods and services there might well be problems, for example, of shortage of steel, electricity, or energy to supply light industry and consumer services.
But the shortages in the USSR were not in heavy industry, energy, or raw materials – on the contrary there was a superfluity of supply in these areas. The shortages were in consumer goods and the almost non-existence of consumer services – precisely the areas where the workers’ state should have the greatest abundance. The type of economic shortage which exist, not the fact of shortages in general, indicates the wrong economic and political orientation adopted.
If the construction of socialism in one country was possible then, of course, such problems would progressively be overcome. Heavy industry would be constructed now and light industry and services later as economic development caught up with that of capitalism. But if socialism in one country were impossible then the economic situation was blocked, the economic project utopian, and the masses would be deprived of consumer supply.
Trotsky’s economic policy led to the exact opposite priority to that of socialism in one country. In Trotsky’s economic analysis the absolute priority was to consolidate the support of the Soviet working class for socialism. Such project could only be achieved with a material foundation. The aim must be to raise the living standards of the working class, conceived in the broadest sense, at the fastest possible rate. The most important sectors of the economy were those aimed at achieving this goal – light industry, state social services and consumer services.
This, naturally, did not mean that the construction of heavy industry could be avoided or that there would be no economic problems. The needs of production of consumer goods, and the defence of the USSR, could not be met without the construction of heavy industry. But the constant aim must be to raise by all means the living standards of the working class. This set the priorities and framework of the entire economic policy.
‘Maximum’ versus ‘optimum’ growth
The issue of improving the living conditions of the working class, of maintaining and strengthening the political support of the proletariat for socialism, therefore, must determine the criteria, and the tempo of economic growth. Trotsky formulated this choice as that of the ‘abstract maximum’ rate pursued by Stalin versus the ‘optimum’ rate – the latter being the rate which most systematically raised the living standards of the working class over a prolonged period and which therefore, over the long term, also yielded the highest actual growth rate owing to the role played by the working class in production. As Trotsky noted in the draft programme of the International Left Opposition: ‘The administrative chase after “maximum” tempos must give way to the elaboration of optimum (that is most advantageous) tempos which do not guarantee the fulfilment of the command of the day for display purposes only, but the constant growth of the economy, with a correct distribution of domestic means and a broad, planned utilisation of the world market.’ 
The goals in such economic growth must be simultaneously economic, that is to achieve the highest sustainable growth rate, and political – to consolidate the political support of the working class and to reinforce its alliance with the peasantry. The first aim of economic policy must therefore be: ‘To establish as the criteria of this discussion: the optimum tempos, those which are most reasonable, that is, tempos which not only permit the application of the present goals, but even more the dynamic equilibrium of rapid growth expansion for a number of years to come; the systematic increase of real wages; the closing of the scissors of industrial and agricultural prices, that is, the strengthening of the alliance with the peasantry.’ 
Such aims in turn dictated the internal balance of the economy. In particular, disruption of the relations between industrial and agricultural production would come not only from an insufficient rate of industrialisation but also from a rate of industrialisation based on excessive levels of investment which squeezed the consumption of the working class and peasants. Trotsky noted: ‘The fundamental and at the same time the most urgent aim… was to ensure the progress of the productive forces in general in the countryside and, on that basis, to accomplish the task of developing industry in close connection with agriculture… The problem of the smychka, the bond between proletariat and peasantry, determined the fundamental economic content of this policy. The aim of the state’s economic policies as a whole is to ensure… a dynamic equilibrium between industry and agriculture, with the socialist elements gaining increased predominance over the capitalist elements.
‘It is quite obvious that disruption of this equilibrium could occur under two main conditions: if the state, by its fiscal, budgetary, industrial, commercial, or other policies were to take from the economy and transfer to industry a disproportionately large share of the annual product and of our resources in general, as a result of which industry would run too far ahead, would become detached from the national economic base, especially the agricultural base, and would run into the road block of insufficient purchasing power; on the other hand, if the state, through all the levers it controls, took an insufficient share of the economy’s resources and their annual increases, the result would be that the supply of agricultural products would lag behind the effective demand.
‘A disruption of the smychka is evident in either case. If industry’s development is excessively forced, that poses an insupportable burden on the peasant and thereby weakens agriculture. But the peasant would suffer just as great a loss if industry could not sufficiently meet the demand from the peasants’ sale of the harvest, resulting in a “scissors” crisis between wholesale and retail prices.’ 
Turned into more precise goals an excessively fast rate of growth of production of the means of production, of heavy industry, as projected in Stalinist planning, would cut too heavily into the living standards of the workers. Thus, confronted with the start of Stalinist industrialisation with the first Five Year Plan, Trotsky sharply criticised this tendency noting: ‘The tempos of industrialisation must be subordinated to the task of restoring the dynamic equilibrium of the economy as a whole… Those resources which are freed by the lowering of the tempos must be immediately directed into funds for consumption and for light industry… The conditions of the workers must be improved at any price… During the construction of socialism people must live like human beings. What is proposed… is a perspective of decades, and not a military campaign, or “a Saturday,” or an isolated case of extraordinary intensification of forces. Socialism is the labour of future generations, but today it must be organised so as to permit the future generations to carry it on their backs.’ 
Opposition to the Stalinist model of industrialisation
From this starting point Trotsky therefore opposed the model of industrialisation inaugurated by the first Five Year Plan and which provided the framework of Soviet economic planning until its final breakdown in the late 1980s. This policy did not improve the conditions of the working class to the maximum degree possible but attacked and rode rough-shod over them. Thus Trotsky noted in 1930, with the simultaneous launching of the first Five Year Plan and the ‘third period’ in foreign policy (the view that social democracy was ‘social fascist’), that: ‘in recent months it has finally become clear that the Stalinist faction has transformed its left zigzag into an ultra-left course both in domestic economic problems within the USSR and in Comintern policy. This course is the negation and adventuristic complement of the opportunistic course that prevailed in 1923 and which was especially pronounced from 1926–28. Today’s course is in no way less dangerous, and in certain respects is a more serious danger, than yesterday’s. Ultra-leftism in the economic policy of the Soviet Union is now developing along two lines: industrialisation and collectivisation… The opportunists have moved from a passive possibilist position to one of unrestrained subjectivism. A reference by an economist or a worker to actual obstacles – for example, bad equipment, lack of raw material or its poor quality – is considered a betrayal of the revolution. From top down comes the demand for full speed, action, offensive. Everything else is the voice of evil.’ 
The specific Stalinist course in industrialisation, dictated by the framework of socialism in one country, was not used to strengthen the position and conditions of the working class, as Trotsky had proposed in the 1920s, but to worsen them: ‘The Left Opposition came out with a warning: with too swift a pace, not tested out by previous experience, disproportions may arise between the cities and the country, and between the different branches of industry, creating dangerous crises. Moreover – and this was the chief argument of the Opposition – a too rapid investment of capital in industry will cut off excessively the share allocated to current consumption, and fail to guarantee the necessary rise of the living standard of the people.’ 
Trotsky noted that: ‘The [Left] Opposition never undertook “in the shortest possible time to overtake and outstrip” the capitalist world… Our estimate of the possibilities of industrialisation was immeasurably broader and bolder than that of the bureaucrats up until 1928. But we never regarded the resources for industrialisation as inexhaustible. We never thought that its tempo could be regulated by the administrative whip alone… The Marxist Opposition was denounced by the bloc of the right and centre… They have a common basis: national socialism. Together they made a curve of 180 degrees over our heads. More and more, they transform the problem of industrialisation into hazardous bureaucratic super-industrialisation.’ 
Trotsky outlined with perfect clarity, totally confirmed by later events, the consequences of the Stalin model of industrialisation. Its consequences were:
• An adventurist attempt to overcome the laws of economics which would inevitably fail. The administrative violence was the expression of this. It was not that the violence and crimes of Stalin were a by-product of a correct course – a case justified by Stalinist apologists as ‘you can’t make an omelette without breaking eggs’. They were the symptoms of a totally wrong course.
• An assault on the living standards of the working class that would break its support for socialism.
• A radical worsening of the position of women in Soviet society.
• A suppression of democracy in all spheres of Soviet life.
• The destruction of any rational pricing and accounting system.
• The radical deterioration of the quality of production.
• The destruction of Soviet agriculture.
We will deal with these in order.
An adventurist/administrative attempt to overcome the laws of economics
From the analysis we have given it is clear that far from being impressed by the launching of forced collectivisation and the Stalinist model of five year plans, considering them a ‘second revolution’ as Deutscher did, Trotsky considered them a disaster. As he stated: ‘Measures of administrative violence have nothing in common with a correct course. They are the price paid for the incorrect one.’ 
Forced collectivisation is considered below. But as far as the course embarked on by the first Five Year Plan was concerned, Trotsky noted that whatever its short term successes, ‘The reactionary utopia of an enclosed socialist economy developing harmoniously on its internal foundations with the safeguard of the monopoly of foreign trade constituted the point of departure of the whole plan.’  More precisely the first Five Year Plan attempted to extract the USSR from the measure of the world economy and democratic control via an administrative/bureaucratic attempt to leap over the laws of economics. Instead of Soviet planning being aimed at being guided and realised through the market it was an attempt to substitute omnipotent planners for the market ultimately led by an omnipotent Politburo. As Trotsky put it: ‘Even if the Politburo consisted of seven universal geniuses, of seven Marxes or seven Lenins, it would still be unable, all on its own, with all its creative imagination, to assert command over the economy of 170 million people. This is precisely the gist of the matter.’ Indeed: ‘if a universal mind existed, of the kind that projected itself into the scientific fantasy of Laplace – a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions – such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest. The bureaucracy often imagines that just such a mind is at its disposal; that is why it so easily frees itself from the control of the market and of Soviet democracy.’ 
Instead of this utopian concept the Soviet economy could not be developed on the basis of administrative and voluntarist planning but only by progressively outgrowing, not suppressing, market relations. As with the state and the family, the market, and the categories which flowed from the market, could only ‘whither away’ over a prolonged historical epoch. They could not be suppressed by administrative fiat. Or as Trotsky noted: ‘The innumerable living participants in the economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but the direct pressure of supply and demand.
‘The plan is checked and, to a considerable degree, realised through the market. The regulation of the market must depend upon the tendencies that are brought out through its mechanism. The blueprints produced by the departments must demonstrate their economic efficacy through commercial calculation.’ 
Raising the conditions of the working class
Within the framework of the purely progressive withering of market relations the criterion of Soviet economic policy could not be a self-enclosed socialist society but the improvement of the conditions of the working class. The first elements of elimination of the market must aim at improving the conditions of the working class – in health, education, housing, the supply of basic necessities etc. Economic policy must be approached from that angle. This meant not suppressing the market in other sectors of the Soviet economy. As Trotsky put it: ‘The draft programme of the International Left Opposition says: “the living standards of the workers and their role in the state are the highest criteria of socialist successes.” If the Stalinist bureaucracy would approach the tasks of planning and of a living regulation of the economy from this standpoint, it would not be compelled to conduct a policy of wasteful zigzags, and it would not be confronted by political dangers.’ 
Instead of this, as we have already noted, the standard of living of the working class was the last criteria, the ‘residual’, considered by both Stalinist and capitalist economic policy: ‘No one disputes that bricks and iron, as well as their transportation, must be paid for. The necessity of calculating the costs of production is admitted at least in principle. But if the expenditures necessary for the extended reproduction of socialist labour power and the expenditures necessary to render it more qualified are considered last in all calculations, it is at the expense of these “reserve funds” that all the contradictions of our economy, which is managed in a miserable fashion, are evened up.’ 
Instead of this bureaucratic approach, in the final analysis rooted in ‘socialism in one country’, the improvement of the conditions of the working class was the most important economic goal: ‘If we speak seriously of independent socialist production, proceeding from the miserable economic base we have inherited, we must be fully and wholly imbued with the idea that of all the economic investments, the most undeniable, expedient and lucrative, is that which is put into the proletariat… They [the Stalinists] do not even dream of understanding this. The myopic conceptions of the petty-bourgeois manager is the most important criterion. Whipped by the lash of the Opposition, the “masters” of the centre… have not understood to this day that unless they make timely investments aimed at developing a skilled workforce – skilled in all respects: social, political, technical, and cultural – they are surely paving the way for the collapse of the whole social system.
‘The stereotyped reply “Where will we get the means?” is only a bureaucratic subterfuge. It is enough to compare the state budget, reaching almost 8 billion in 1929; the gross production of state industry, amounting to 1.3 billion; capital investments of more than 1.5 billion; with the miserable 35 million constituting the annual fund for wage increases.’ 
The result of the Stalinist policy was to reduce to the minimum the proportion of economy devoted to sustaining and improving working class living standards. As Trotsky noted: ‘the economic turn towards industrialisation and collectivisation took place under the whip of administrative panic.’  ‘The wrong method of the plan, the incorrect adjustment in the course of its realisation, the absence of genuine control by the masses, the absence of the party, the struggle for artificial targets in the name of prestige, the administrative command of the whip, boasting, bluster, stifling of criticism – all these combined have led to a false distribution of forces and means and have created, in view of the extremely rapid growth of the number of wages, an intolerable contraction of the real wage fund.’ 
The downplaying of consumer goods
The consequence of the excessive contraction of the proportion of the economy devoted to supplying consumer goods, and working class services, was that far from initial industrialisation benefiting the working class it took place at their expense. The pattern of the first Five Year Plan, and forced collectivisation, led not to an expansion of the goods available for the working class but a deterioration in the supply. Even later, when Soviet production of consumer goods did begin to rise, it was inadequate compared with the heavy expansion of heavy industry. Furthermore the consumer service sector, typical of the advanced capitalist countries, was almost totally absent. Trotsky, noted in response to this that: ‘The composers of the plan proclaimed that it was their task to “lift up the country to a new and hitherto unseen high level of material and cultural development”… in actuality, the shortage in commodities has become unbearably acute, the supply of bread has sharply decreased, meat and dairy products have become rarities…
‘In reply to this, the theory has been created that socialism is not a consumers’ organisation of society. The consolation bears too close a resemblance to mockery! In the midst of newly constructed factories, plants, mines, electric stations, collective and Soviet farms, the workers and peasants begin to feel more and more as if they are in the midst of gigantic phantoms indifferent to the fate of humans. An acute feeling of disillusionment has possessed the masses. The populace, as consumers, can no longer understand to what end they strain their energies as producers.’ 
Imbalances in the economy
The result of the failure of industrialisation to improve the conditions of the working class was a distortion of the entire balance of the Soviet economy. Light industry and consumer services, production of means of consumption, which serviced working class living standards, were constricted, or even non-existent, while heavy industry, the production of the means of production, grew rapidly. The resulting imbalance was wrong economically and deeply discrediting for socialism – which above all seeks to meet the needs of the working class. 
Trotsky noted: ‘Is it not monstrous? The country cannot overcome its scarcity of goods, food shortages occur daily, children lack milk – and the official philistines declare: “The country has entered into the period of socialism.” Could socialism be more fraudulently discredited.’  Against this Trotsky called for priority for light industry, for production of consumer goods, for raising the living standards of the working class as rapidly as possible and at all costs: ‘The “gaps” in the plan cannot be filled at the expense of light industry, as was generally done during the first two years, since the greatest lag in the plan is to be observed precisely in the production of finished goods… the scarcity of goods demands extraordinary efforts in the sphere of light industry.’ 
As Trotsky wrote prophetically: ‘Socialist construction is a task for decades. One cannot guarantee the solution of this task except by a systematic advance in the material and cultural living standards of the masses. This is the principal condition, more important than the gain in time in the construction of a Dnieprostroy, a Turksib or Kuzbas [large scale Soviet industrial projects] because with the fall in the physical and moral energy of the proletariat, all the gigantic enterprises may lack a tomorrow.’ 
The political consequences
Trotsky outlined the political consequences of these choices in economic policy clearly. The Stalin course – which instead of seeking to raise the living standards of the working class sought economic development at the expense of the working class – smashed the support of the proletariat for socialism. Thus even before the phase of super-industrialisation began Trotsky warned bluntly in 1926: ‘During the last year the entire economy took a step forward. There was an upturn in industry. The overall standard of living in the country improved. At the same time, real wages, by comparison with the autumn of last year, declined. How and why did this happen? Isn’t there a danger that the overall standard of living [of other sections of the population] will continue to rise faster than wages? That would mean that the influence of the working class in society at large would decline. Is it necessary to discuss this question or isn’t it?’ 
Trotsky wrote five years later of the inevitable political consequences of such a course: ‘The platform of the Russian Opposition warned five years ago: “The Mensheviks, agents of the bourgeoisie among the workers, point triumphantly to the material wretchedness of our workers. They are trying to rouse the proletariat against the Soviet state, to induce our workers to accept the bourgeois-Menshevik slogan “Back to capitalism”. The complacent official who sees “Menshevisrn” in the Opposition’s insistence upon improving the material conditions of the workers is performing the best possible service to Menshevism. He is pushing the workers under its yellow banner’. 
Given the distortion of the entire Soviet economy by the priorities of socialism in one country, the various administrative measures, and campaigns, embarked upon by the Soviet bureaucracy made the situation not better but worse, as they could not substitute for the material base of improving the living standards of the working class. Stalin’s economic policy was thus both reactionary and voluntarist. Or as Trotsky noted: ‘Heroic enthusiasm can lift the masses for relatively short historical periods. A small minority is capable of manifesting enthusiasm for a whole historical epoch: upon this is based the idea of a revolutionary party as the selection of the best elements from the class. But socialist construction is a task for decades.’ 
Thus Trotsky criticised the glorification of the Stakhanovist movement, for example, presented by Stalin as a model for raising economic growth because: ‘The administrative method of “emulation” shows that the tempos are being attained largely at the expense of human muscle and nerve.’  Naturally ‘exemplary’ work could be used in the construction of a socialist society but it could not be its basis. Instead of voluntarism the plan must be drawn up to improve the living standards of the working class – not simply extort greater and greater effort. As Trotsky noted: ‘Collective verification of the plan must be made in the process of work. The elements of this verification do not lie only in the figures of socialist book-keeping but also in the muscles and nerves of the workers and in the political moods of the peasants.’ 
These correct criteria of economic advance directly dictated the policy towards wages. The measurements used to decide on economic performance by both pro-capitalist right and the Stalinists refused to take as the most important criteria how rapidly and sustainably the living standards of the workers were being raised. As Trotsky noted prior to the launching of the first Five Year Plan: ‘The articles and resolutions against the right clamour a good deal… about capital investments in industry, but they do not contain a single word on wages. This question, however, must become the main criterion for measuring the success of socialist development; and consequently, also the criterion to apply to differences. A socialist advance ceases to be such if it does not uninterruptedly, openly, and tangibly improve the material position of the working class in its daily life.’ 
Trotsky noted that the approach of the Stalinists fell behind even the advanced capitalist sectors in the West: ‘Even the progressive capitalists in the epoch of capitalist prosperity and their theoreticians (the Brentano school, for example) put forward the amelioration of the material situation of the workers as a premise for the increase of labour productivity. The workers’ state must generalise and socialise at least this viewpoint of progressive capitalism, insofar as the poverty of the country and the national limitation of our revolution does not permit us and will not permit us for a long time to be guided by a real socialist criterion.
‘That is to say, the purpose of production is to meet human needs. We will not come to such really socialist relations between production and consumption for a number of years yet, under conditions of victorious revolution in the advanced capitalist countries, when our country is included in a common economic system. But since we have socialised the capitalist means of production, we must at least socialise also, so for as wages are concerned, the tendencies of progressive capitalism and not those of primitive or declining capitalism.’ 
This framework directly dictated Trotsky’s opposition to Stalin’s attempt to lower wages and compress the consumption fund. He noted: ‘we must crush and throw to the winds the tendencies that imbue the last joint resolution of the Russian trade unions and the Supreme Council of the National Economy relating to wages projected for 1929. It is a decree of the Stalinist Political Bureau. It announces that with a few exceptions… there must be no mechanical (remarkable word!) increase in wages. Innumerable newspaper articles explain that the task for 1929 is to fight for the maintenance of the present scale of real wages. And at the same time all the noisemakers are cluttering away to announce the mighty rise of socialist construction…
‘Budget appropriations for the protection of labour are insignificant. Alcoholism is on the increase. And as a perspective we have for the coming year the struggle to maintain the present wages of the workers. This means that the economic rise of the country is being accomplished at the price of decreasing the proletariat’s share in the national income… No statistics can dispute this fact, which is in equal parts the result of the policy of the right and the centre.’ 
Even in the most difficult economic circumstances Trotsky noted that the most important task was to attempt to sustainably raise the living standards of the workers. Thus for example writing in 1926 he noted: ‘Economic difficulties do not allow us at present to chart a course towards a substantial rise in wages. The party should recognise, however, that the present wage level is inadequate and should set itself the following tasks in this area:
a. not to allow a decrease in real wages in the near future;
b. to create the material conditions for a future increase in wages, i.e., a sufficient increase in the volume of industrial production in 1926–27 for money wages to be appropriately supplemented in kind (40 to 45 per cent of the worker’s budget is now paid for in industrial products); a stubborn and systematic technical re-equipment of industry, the only thing that can ensure a systematic and uninterrupted rise in the workers’ standard of living.’ 
Consumer goods and the productivity of labour
Trotsky pointed out that rises in real wages, above all increasing the supply of consumer goods, would increase, not decrease, the productivity of labour: ‘There have been differences of opinion on the question of wages. In substance, these differences consist of our being of the opinion that at the present stage of development of our industry and economy, and at our present economic level, the wage question must not be settled on the assumption that the workers must first increase the productivity of labour, which will then raise the wages, but that the contrary must be the rule, that is, a rise in wages, however modest, must be the prerequisite for an increased productivity of labour.’ 
Indeed the appalling economic conditions directly hit against the productivity of labour: ‘In the category of reasons for the extremely low production of the Red Ural combine [in the Soviet press] alongside of “the shocking disproportions between the different parts of the combine,” lists the following: (1) “the enormous migration of the labour force”; (2) “the muddle–headed policy of the workers’ wage”; (3) “failure to provide [the millworkers] with some manner of liveable quarters”; (5) “the catastrophic falling–off of labour discipline.” We have quoted word for word.
‘As regards the migration, which “has grown beyond all bounds,” this paper writes, “the living conditions [of the workers] are ghastly in all the enterprises of nonferrous metallurgy without exception.”
‘In the locomotive factories, which failed to provide the country with about 250 locomotives for the first three-quarters of the year, “there is to be observed an acute shortage of qualified workers. More than two thousand workers in the course of the summer left from the single Kolomensk factory.” The reasons? “Bad living conditions.” In the Sormovsk factory, “the factory kitchen is a dive of the worst sort.” In the privileged tractor factory in Stalingrad, “the factory kitchen has fallen sharply in its work”…To what pitch the dissatisfaction of the workers must have risen in order to force these facts into the columns of the Stalinist press!…
‘In explanation of the cruel flop of “the six conditions” [a campaign of Stalin] there was a tendency for a long time to confine the observations to bold accusations against the management and the workers themselves: “incapacity”, “lack of willingness”, “resting on their laurels”, etc. However, for the last few months the papers more and more often point out, mostly on the sly, the actual core of the evil, the unbearable living conditions of the workers… This risky explanation was made necessary, no doubt, in order to hide the basic fact: the lack of material goods to supply the workers. The national income is incorrectly distributed. Economic tasks ore being set without any account being taken of the actual means. An increasingly inhuman load is being dumped on the shoulders of the workers.’ 
This position of Trotsky’s was particularly prophetic. In the 1970s and 1980s systematic increases in wages did occur in the USSR. But there was still a tremendous shortage of consumer goods for these wages to buy. The result was, first, the ‘monetary overhang’ which threatened the Soviet economy and, second, the fact that the increase in wages did not produce an increase in productivity – because even when workers received higher wages there were no consumer goods to purchase with them and the incentive effect was therefore minimal. Only a radical redistribution of resources within the Soviet economy could solve the problem.
For such reasons Trotsky attacked the almost universal use of piecework under the Stalinist system – a method of payments which has increasingly been dropped even by advanced capitalist production. Piecework was an attempt by the Stalinists to compensate for the lack of incentive given to the working class due to the shortage of consumer goods and services. Trotsky noted, for example, of Stalin’s complaint of the excessive mobility of labour, which the latter described as workers wandering from factory to factory to ‘try their luck’, that: ‘Nine tenths of the new programme of Stalin amounts to the re–establishment of piecework … We are told that in the third year of the five year plan the Soviet Union has entered into socialism… “Do not forget” he [Stalin] says, “that the vast majority of the workers have accepted these demands of the Soviet government (discipline, over-exertion of effort, emulation, shock brigades) with great enthusiasm, and they are fulfilling them heroically.”
‘Now if that is true, if we have entered into socialism, if the “vast majority”… of the workers fulfil their tasks “with great enthusiasm” and even “heroically”, one must ask why this some “vast majority” wander from one factory to another to try their luck? And why are they obliged, precisely now, after all the successes have been achieved, to pass over to the system of piecework which is, after all, the most refined method of exploitation of working class.’ 
Excessive reliance on piecework was an attempt to substitute for the involvement of the masses in economic life. As Trotsky noted: ‘Piecework wages are not in principled contradiction with the conditions of the transitional Soviet economy… But the abrupt turn towards piecework and the extreme accentuation of the capitalist feature of this system present today, in the summer of 1931, at the end of the third year of the five year plan, after the “uninterrupted successes”, after we have “entered into socialism”, is one of the harshest blows against the workers, from the material as well as from the moral point of view.’ 
The overall conditions of the working class
The situation of wages and piece work was, however, simply a symptom of the entire situation under the Stalin course – the latter’s attempt to pursue industrialisation at the proletariat’s expense: ‘The housing conditions of the workers in many places continue to deteriorate in terms of overcrowding and the restriction of tenants rights. The reduction in the number of adolescents hired… and the introduction of unpaid apprenticeships means an abrupt worsening of conditions for working class youth… The strengthening of the USSR internationally requires the strengthening of the revolutionary proletarian line within the USSR. We are weakened by the delay in raising wages, the deterioration of the workers’ housing conditions.’ 
In short, the real development and defence of the Soviet state could not take place at the expense of the working class but only on the basis of strengthening the position of the working class. As Trotsky noted: ‘bettering the conditions of the workers; that’s where the beginning must be made, for herein is to be found the key to everything else. Workers and their families must be assured of food, shelter and clothing. No matter at what cost!… All questions relating to supplying factories with necessities must be regulated as independent and not supplementary tasks. Order must be brought into the production of consumer goods. Commodities must be adapted to human needs and to the raw by-products of heavy industry.’ 
Without this the entire socialist project faced catastrophe. Trotsky warned prophetically of the Stalin course: ‘Unbearable working conditions cause a turnover of labour within the factories, malingering, careless work, breakdown of machines, damaged products, and general low quality in the grade of production. The entire planned economy fails under the blow.’ 
The consequences for women
Finally the deterioration of light industry, the lack of consumer goods, and almost complete absence of consumer services struck most severely at women – because a large part of the sector was what made possible any beginning of the socialisation of domestic labour.  The reactionary policies of Stalin on women, ‘motherhood’ etc – the ‘Thermidor in the family’ which Trotsky wrote of in The Revolution Betrayed – had their root in the wrong economic course established by socialism in one country. The position of women was improved by Stalin only insofar as it allowed them to function as an expanded supply of labour – to function as cogs in the emphasis given, in particular, to heavy industry – and not from the point of view of meeting the needs of women themselves. The development of the economic sectors that were necessary for women’s needs were disrupted by the entire economic course. For only on a material basis could the real liberation of women take place.
As Trotsky noted: ‘To institute the political equality of men and women in the Soviet state was one problem and the simplest. A much more difficult one was the next – that of instituting the industrial equality of women and men in the factories, the mills, and the trade unions and doing it in such a way that the men should not put the women to disadvantage. But to achieve the actual equality of man and woman within the family is an infinitely more arduous problem. All our domestic habits must be revolutionised before that can happen. And yet it is quite obvious that unless there is actual equality of husband and wife in the family, in a normal sense as well as in the conditions of life, we cannot speak seriously of their equality in social work or even in politics. As long as woman is chained to her housework, the care of the family, the cooking and sewing, all her chances of participation in social and political life are cut down in the extreme.’ 
Therefore: ‘To alter the position of women at the root is possible only if all the conditions of social, family, and domestic existence are altered… The question of motherhood is above all a question of an apartment, running water, a kitchen, a laundry room… Running water and electricity in the apartment lighten the woman’s burden above all.’  The running down of consumer goods and services which was the by-product of the policy of socialism in one country directly struck women.
Equally severe in its effects on women was the question of quality of production – something considered in detail below: ‘Housing construction, the construction of childcare facilities, kindergartens, communal dining rooms and laundries must be in the centre of attention, and that attention must be vigilant and well organised. Here questions of quality decide all. Childcare, eating and laundry facilities must be set up so that by the advantages they provide they can deal a death blow to the old closed-in, isolated family unit, completely supported on the bent shoulders of the housewife and mother… But the transfer of material means from the family… will only take place if the social organisation learns to satisfy the most primary demands better than the family.’ 
Stalin, by destroying the economic basis of consumer goods and services, and the quality of production, threw back women. Trotsky noted: ‘The October Revolution honestly fulfilled its obligations in relation to woman. The young government not only gave her all political and legal rights in equality with man, but, what is more important, did all that it could, and in any case incomparably more than any other government ever did, actually to secure her access to all forms of economic and cultural work…
‘The revolution mode a heroic effort to destroy the so-called family hearth – that archaic, stuffy and stagnant institution in which the woman of the toiling classes performs galley work from childhood to death. The place of the family as a shut in enterprise was to be occupied, according to the plans, by a finished system of social care and accommodation: maternity houses, child care centres, kindergartens, schools, social laundries, first aid stations, hospitals, sanatoria, athletic organisations, moving picture theatres etc. The complete absorption of the housekeeping functions of the family by institutions of the socialist society…was to bring to woman… a real liberation from thousand year old fetters…
‘It proved impossible to take the old family by storm – not because the will was lacking, and not because the family was so firmly rooted in men’s hearts. On the contrary, after a short period of distrust of the government and its child care facilities, kindergartens, and like institutions, the working women, and after them the more advanced peasants, appreciated the immeasurable advantages of the collective care of children as well as the socialisation of the whole family economy. Unfortunately society proved too poor and little cultured. The real resources of the state did not correspond to the plans and intentions of the Communist Party. You cannot “abolish” the family; you have to replace it. The actual liberation of women is unrealisable on the basis of “generalised want”. Experience soon proved this austere truth which Marx had formulated eighty years before.
‘The truth is during the lean years the workers, wherever possible, and in part their families, ate in the factory and other social dining rooms, and this fact was officially regarded as a transition to a social form of life… The fact is that from the moment of the abolition of the food-card system in 1935, all the better-placed workers began to return to the home dining table. It would be incorrect to regard this retreat as a condemnation of the socialist system, which in general was never tried out. But so much the more withering was the judgement of the workers and their wives upon the “social feeding” organised by the bureaucracy. The same conclusion must be extended to the social laundries, where they tear and steal linen more than they wash it. Back to the family hearth!
‘But home cooking, and the home washtub, which are now shamefacedly celebrated by orators and journalists, mean the return of the workers’ wives to their pots and pans – that is, to the old slavery. It is doubtful if the resolution of the Communist International on the “complete and irrevocable triumph of socialism in the Soviet Union” sounds very convincing to the women of the factory districts.’ 
The distortion of the Soviet economy, the destruction of light industry, welfare and consumer services, struck its heaviest blow against women.
[Continued in Part 3]