Rare positives of the 1965 Kosygin/Liberman reform?

[Die Neue Zeit]

http://en.wikipedia.org/wiki/1965_Soviet_economic_reform


The number of policy targets was reduced from 30 to 9. The rest remained indicators: total output at current wholesale prices, the most important products in physical units, the total payroll, total profits and profitability, expressed as the ratio of profit to fixed assets and working capital normalized; payments to the budget and appropriations from the budget; total capital investment targets for the introduction of new technology, the volume of supply of raw materials and equipment.

[...]

Pricing: Wholesale sales prices now had to be profitable.

I've stated before my general opposition to the 1965 Kosygin/Liberman reform, but considering my non-political education I thought it pertinent to bring up one particular issue for discussion on any immediate transitional period.

If I'm not mistaken, before 1965 Soviet enterprises didn't have a robust inventory control system. Anything that was produced was counted towards the arbitrary production targets. No consideration was given towards distinguishing between finished products still in inventory (an aspect of chronic overproduction) and related inventory carrying costs, on the one hand, and finished products sold on the other. Moreover, no consideration was given towards a little known part of surplus value that's also bad: certain kinds of quality costs, or the costs of poor quality. There are four kinds of costs of poor quality: prevention costs, appraisal costs, internal failure costs, and external failure costs.

First, prevention costs are incurred to keep the other costs of poor quality to a minimum. Among them are quality planning, reviews of new products, process planning, process control, and quality audits.

Second, appraisal costs, such as inspection costs, are incurred to evaluate whether products meet quality requirements.

Third, internal failure costs involve a lot of number-crunching, because these involve discoveries of deficiencies before the products are sold. Costs associated with spoilage, rework, and scrap are the three most notable internal failure costs, though there are also other costs like inventory write-down costs because of inventory count discrepancies.

Fourth, external failure costs are things like warranty charges, sales allowances, returned items, etc.

Beginning in 1965, again if I'm not mistaken, Soviet enterprises had to account for these kinds of quality costs, finished products still in inventory did not count towards production targets, and incentives were established to minimize inventory carrying costs (such as by means of just-in-time production).

Thoughts?

[Vladimir Innit Lenin]

It was a shit policy, so we're not gonna implement it in future.

So I don't understand its relevance to the economic sub-forum.

[RED DAVE]

http://en.wikipedia.org/wiki/1965_Soviet_economic_reform

Thoughts?Why are concerned with bureaucratic reforms of state capitalism, considering that they have nothing to do with socialism?

RED DAVE

[Die Neue Zeit]

It was a shit policy, so we're not gonna implement it in future.

So I don't understand its relevance to the economic sub-forum.


Why are concerned with bureaucratic reforms of state capitalism, considering that they have nothing to do with socialism?

Because the subject matter is inventory control and related accounting.

[RED DAVE]

Because the subject matter is inventory control and related accounting.This is a revolutionary bulletin board, not a board on accounting, bookkeeping and inventory control. There are boards for that. They are run by MBAs, not revolutionaries.

Whatever systems the USSR or an American corporation or the Venezuelan oil industry uses are based on top-down bureaucratic control. As such, they are probably useless to the working class or, at best, a mild curiosity like an oil lamp,

RED DAVE

[JoeySteel]

Not that I'm hugely interested in this thread, but the very predictable response from red dave is totally obnoxious. It's downright anti intellectual. Any time someone wants to discuss something concrete RD comes along and pukes out the same garbage about how it has nothing to do with socialism, which evidently exists only in his mind, or his endlessly repeated mantras, and isn't concerned with petty material things. We know what you think "socialism" is, it's not "top-down" etc, etc, as you repeat over and over again. Nobody gives a shit about your fantasy. You don't need to enter every thread to browbeat and naysay every time someone has an idea or wants to discuss something. Your conduct to DNZ in particular is vile and borderline harassment as every time he posts something you usually follow with the same obnoxious condescending idealist bullcrap. Everyone gets the message dude.

[RED DAVE]

Not that I'm hugely interested in this thread, but the very predictable response from red dave is totally obnoxious.Tsk-tsk.


It's downright anti intellectual.Bullshit, of couse. But it is an anti-bureaucratic, anti-Stalinist and anti-social-democratic.


Any time someone wants to discuss something concrete RD comes along and pukes out the same garbage about how it has nothing to do with socialismWhat I puke on is attempts to project the bureaucratic relationships within corporate capitalism or state capitalism into socialism. In fact, I shit on them.


which evidently exists only in his mindAre you saying that my version of socialism, based on workers control of the economy is a fantasy.


or his endlessly repeated mantras, and isn't concerned with petty material things. We know what you think "socialism" is, it's not "top-down" etc, etc, as you repeat over and over again.And with people like DNZ and the ideas of the late Joe Stalin around, it needs to repeated over and over again.


Nobody gives a shit about your fantasy.Thanks for sharing.


You don't need to enter every thread to browbeat and naysay every time someone has an idea or wants to discuss something.I don't do that, but that's what you're doing now: setting up a strawman of my behavior and attacking it.


Your conduct to DNZ in particular is vile and borderline harassment as every time he posts something you usually follow with the same obnoxious condescending idealist bullcrap.He's a grown man. He can defend himself. But obviously, his bureaucratic obsessions appeal to you.


Everyone gets the message dude.Apparently not. And by the way, thanks for using Stalin's name as a username. It lets us know where you're coming from.

RED DAVE

[Die Neue Zeit]

This is a revolutionary bulletin board, not a board on accounting, bookkeeping and inventory control. There are boards for that. They are run by MBAs, not revolutionaries.

Without a proper understanding of them, workers won't be able to run the economy and society will need measures that will make Lenin's one-man management and Stalin's 1924 definition of "cadre" as one who "must know how to carry out instructions, must understand them, adopt them as his own, attach the greatest importance to them, and make them part of his existence" look so democratic.

[RED DAVE]

This is a revolutionary bulletin board, not a board on accounting, bookkeeping and inventory control. There are boards for that. They are run by MBAs, not revolutionaries.
Without a proper understanding of them, workers won't be able to run the economy and society will need measures that will make Lenin's one-man management and Stalin's 1924 definition of "cadre" as one who "must know how to carry out instructions, must understand them, adopt them as his own, attach the greatest importance to them, and make them part of his existence" look so democratic.Considering that wowrkers already do the accounting, bookkeeping and inventory control, I see little use in the ways that these things are organized under state capitalism. The methods of bourgeois organization of enterprises will be about as useful to the working class under socialism as so-called "management science."

RED DAVE

[Die Neue Zeit]

Now look who's missing the dynamics of transitional periods.

[piet11111]

The thing i like most about DNZ threads is that its so often about topics i would never think about myself.

While its true that often those topics are extremely specialized i do try to skim through the posts and try to understand what its about as i usually learn something.

And Red Dave you do seem to hate on DNZ every chance you get because his topics are usually about failed policy's but have you ever thought that wrong examples leave just as much room for learning as successful examples ?

[MarxSchmarx]

Red Dave what precisely is so awful about making a thread about changes in soviet accounting practices? For those interested in studying attempts at planned economies and how they have historically worked, these sorts of things seem rather foundational.

For those who think planned economies are viable in the future, on some level, deducting spoiled produce from the "onions that will hit the shelves this week" legend seems to me to be neither particularly capitalist nor socialist. DNZ's point was merely that these kinds of practices were largely not done until the 60s in some segments of the USSR.


Considering that wowrkers already do the accounting, bookkeeping and inventory control, I see little use in the ways that these things are organized under state capitalism. The methods of bourgeois organization of enterprises will be about as useful to the working class under socialism as so-called "management science."

RED DAVE

So is your assertion basically that we should ignore the russian attempts at a planned economy and just leave it as an embarrassment in history?

I suppose on some level I agree that this accounting thing is mildly curious and not much more (although I doubt it was meant to be) but it does raise questions about why such things were not done. For the loads of Maoists and others who advocate a top-down soviet-style planned economy, this would seem a relevant question to answer. Just because they aren't relevant to other (much less all) tendencies hardly doesn't mean they don't warrant discussion.

[Jose Gracchus]

There at best very little, and at worst, absolutely nothing, to be learned from the post-1918 "Soviet" state's economic and industrial management, investment, and organizational policies and history, when it comes to the project of reorganizing and reconstituting social and economic activity in society in a manner consistent with the power of the working-class and transitioning to communism or socialism.

The USSR's mature economic system cannot be considered 'socialist planning' in any substantive sense: all economic actors in the USSR were engaged in antagonistic and contradictory relations with one another, characterized by consistent pursuit of self-interest (defined within the framework of the system, that is) at the expense of the fictitious and illusory general interest of society. All information provided was systemically inaccurate and acknowledged implicitly by all participants as certainly wrong and inaccurate. Factory management horded labor reserves, statisticians were ideologically barred from acknowledging the category of unemployment, and planners could only rely on the bureaucracy for accurate information. As a result, the 'plans' could not and did not have scientific basis. In fact, it was routine for central planners to deliberate set production targets beyond the acknowledged capacity of enterprises, with the deliberate goal of forcing the enterprise to make use of anti-social, secret, and illegal (but nonetheless ubiquitous and systemic) horded reserves of labor and raw materials.

The first thing one must understand about the Soviet economic system is that it is intrinsically hostile to the self-emancipation and -abolition of the working-class, and has at its heart the political and social atomisation and repression of the working-class. It was improvised from the outset to achieve a national industrialization, achieving the heavy industrial production capacity of first-rank powers (and thus credibly maintain practical independence) with only the state available as an organizational substrate, in conditions of autarky. The utility of such a model in 2011 is questionable, at best.

The premise behind "centrally-administered economies" (Hillel Ticktin) is precisely and fundamentally the political expropriation of the working-class, and its total submission to the productivist heavy industry goals of the state apparatus. Its identity, origins, dynamics, and social features are at a right angle with any credible emancipatory conception of a classless, stateless, moneyless society and its successful construction.

[Die Neue Zeit]

There at best very little, and at worst, absolutely nothing, to be learned from the post-1918 "Soviet" state's economic and industrial management, investment, and organizational policies and history, when it comes to the project of reorganizing and reconstituting social and economic activity in society in a manner consistent with the power of the working-class and transitioning to communism or socialism.

Just because there are faults and lots of criticisms doesn't mean there's little to learn. In fact, they indicate precisely the many lessons of what to do and especially what not to do.


Factory management horded labor reserves, statisticians were ideologically barred from acknowledging the category of unemployment

Speaking strictly of a transitional period, the hoarding of labour reserves can be avoided by means of a Fully Socialized Labour Market. The massive public hiring monopsony-of-an-agency can move against enterprises hoarding labour reserves. Also, frictional unemployment would have to be acknowledged.

[Vladimir Innit Lenin]

How can increasing state power by making the national government increasingly powerful (through a nationalised labour market) move us any closer to a stateless society? Flawed logic. Plain wrong.

The transitional period is meant to be just that: transitional. You are meant to move towards the abolition of the state, of nations and of money, not enhance statism, nationalism or the rule of money.

[Die Neue Zeit]

How can increasing state power by making the national government increasingly powerful (through a nationalised labour market) move us any closer to a stateless society? Flawed logic. Plain wrong.

Formally a Fully Socialized Labour Market can take the form of a state or polity monopsony-of-an-agency. However, the "withering away of the state" could mean the gutting of this institution and transferring its responsibilities to a Socialist Industrial Union / Revolutionary Industrial Union / Sociopolitical Syndicate or to a bureau of the "ruling party."

[RED DAVE]

Formally a Fully Socialized Labour Market can take the form of a state or polity agency. However, the "withering away of the state" could mean the gutting of this institution and transferring its responsibilities to a Socialist Industrial Union / Revolutionary Industrial Union / Sociopolitical Syndicate or to a bureau of the "ruling party."Bureacratic gobbledy-gook as usual.

One more time, we are faced with the fact that DNZ cannot countenance a workers government based in the workplaces that can and will control a world economy. For DNZ: Bureaucracy yes; soviets no.

RED DAVE

[Vladimir Innit Lenin]

Formally a Fully Socialized Labour Market can take the form of a state or polity agency. However, the "withering away of the state" could mean the gutting of this institution and transferring its responsibilities to a Socialist Industrial Union / Revolutionary Industrial Union / Sociopolitical Syndicate or to a bureau of the "ruling party."

Surely it would be the Unions or, more likely, the 'ruling party' that would control the state/polity agency you talk about.

So really you have no plan to actually dismantle the state in any way, and you are being somewhat disingenuous here.

[Die Neue Zeit]

Surely it would be the Unions or, more likely, the 'ruling party' that would control the state/polity agency you talk about.

So really you have no plan to actually dismantle the state in any way, and you are being somewhat disingenuous here.

It's way more complex than that. I didn't lean towards one answer over another in the DeLeon vs. Khrushchev thread. The reason is the spectrum from Zhdanov-Kuznetsov to Malenkov to Khrushchev and then back again. If the "ruling party" is committed to either of the first two positions (i.e., not buying Khrushchev's "withering away of the state" approach), then there must be a role for the SIU/RIU/SPS for the simple reason that there aren't enough administrators in the "ruling party" (as well as because it shouldn't be the responsibility of the actual, political, ruling party-movement).

This is particularly relevant to the immediate portion of the transitional period, when the Zhdanov-Kuznetsov position would likely be more prevalent as a double safeguard complementing the Razlatzki position, emphasizing political work.

[Vladimir Innit Lenin]

Kruschev was never serious about the withering away of the state. I don't know if you're actually that naive, but his 1980-communism thing was petty politicking, quite obviously.

If you want to be a Malenkovite or Zhdanovite, then go ahead, nobody really cares.

[Die Neue Zeit]

It was improvised from the outset to achieve a national industrialization, achieving the heavy industrial production capacity of first-rank powers (and thus credibly maintain practical independence) with only the state available as an organizational substrate, in conditions of autarky. The utility of such a model in 2011 is questionable, at best.

Back on topic, what about under-industrialized regions and sub-Saharan Africa today? :confused: