Base Wage Differentials

[Cryotank Screams]

I recently got my hands on a pretty interesting book, and it doesn't seem biased, in that it doesn't take a terribly harsh stance on the Soviet Union per se, and tries to portray it in an objective light, however the only problems I see as it being a credible source is that it was written in 1966, and at that time, information on the economics of the Soviets, was very limited, but at any rate, the book is called, Economic Systems In Action: The United States, The Soviet Union, France by Alfred Oxenfeldt and Vsevolod Holubnychy.

I will post sources if needed;

The personal base wage differentials in the Soviet Union by 1963 were as follows;


Statutory minimum, rural areas…………………$360
Statutory minimum, urban areas………………....400
Collective farmer (1962)...……………………....574
State Farmer worker……...………………………586
Official typist…………...……………………..….588
Textile worker…………………………………….679
Construction worker………………………………746
Machine tool operator……………………………..746
High school teacher………………………………..824
Steel worker………………………………………..872
Coal Miner………………………………………..1,092
Physician, M.D…………………………………...1,260
Lawyer……………………………………………1,376
Average for all worker and employees…………...1,445
State farm manager………………………………..3,530
Technician………………………………………....3,724
Engineer (oil industry)…………………………….4,238
Master foreman (machine-building)………….....…5,028
Doctor of science, head of department in research….5,738
Factory director (machine-building)……………….6,240
University professor………………………………..7,070
Cabinet minister, republic government…………….9,125

(Currency converted from Rubles to Dollars)

Now, the book does state, that initially during the early years of the Soviet Union, economic equality, was a top priority, and much attention, was spent on seeing, that party official’s yearly income matched that of the average workers, however it goes on to state, that when Stalin was elected General Secretary he saw the equalitarianism of the income distribution, as not providing enough drive to learn, and succeed, so he abolished equal income distribution as an official policy, in order to increase productivity and provide incentives.

Then it says that when Khrushchev was elected General Secretary, he made it a policy of his government, to try to stop the slight inequality, of the income distribution, and once again embrace economic equalitarianism.

It provided this quote by Anastas Mikoyan;

The gap was natural when a peasant country had to create qualified technical and intelligentsia. One had to have a big gap to spur all capable men to struggle to rise and learn. IT was quite justified and necessary. This was not so great as gap which arose after WWII. During the war and immediate post-war years, enterprises tried to establish very high pay for jobs for which they could not get people. In heavy industry, they raised the pat of directors, qualified workers, and engineers very much. At that time people had ration cards for food supply, so the gap in money wages didn’t make so much difference in eating. Those with extra money wages bought in “commercial stores” at four to five times the regular price.

When there was currency reform in 1947 and the rationing system was abolished, the problem really arose, even though low wages were raised somewhat. Because now the earlier excessive rise in the ages of leading personnel was fully reflected in purchasing power.

In the last few years, with the growth in the number of qualified workers, and intellectuals, the large gap can no longer be justified economically, and begins to play a negative role. Now for the jobs the little pay it is difficult to get people.

Top salaries have not been cut much because it is easy to raise, tough to cut. Excesses have been cut, real excesses, but that affects only 100,000 individuals. But you cannot cut the pay of millions.

The main procedure is this: those paid well get no increases. Those in the middle get slow raises. Those on the bottom get big raises.

So the main questions I have, is this economic inequality of distribution of personal income in the Soviet Union, a betrayal of Communism and it’s ideals? Or was this just out of necessity for the times given the historical and material conditions, and the challenges faced by the Soviets? Would or should this inequality be fixed in a new Communist government system? Why did Stalin stop the NEP as a comprise to Socialist ideals, but abolished the economic equality? What impact did this have on the class struggle? Did this create new classes?

Also, bare in mind, this wasn’t meant to be a critique, just honest questions, that have been bugging me upon reading this.

[ComradeRed]

So the main questions I have, is this economic inequality of distribution of personal income in the Soviet Union, a betrayal of Communism and it’s ideals? Or was this just out of necessity for the times given the historical and material conditions, and the challenges faced by the Soviets? Would or should this inequality be fixed in a new Communist government system? Why did Stalin stop the NEP as a comprise to Socialist ideals, but abolished the economic equality? What impact did this have on the class struggle? Did this create new classes? If you want my opinion, this demonstrates that the USSR really wasn't socialist (not even a "degenerate workers' state" as some Trotskyites would call it).

But as we always tell the capitalists in the OI "You can't determine class by income", you determine it by its relation to the means of production and labor.

It's interesting that the managers, foremen, etc. are paid 3x or more what a lawyer makes. A researcher gets 5x as much as a physician.

I'm curious what the defenders of the USSR will say, but I'm tempted to say "USSR had wage desperaties, case closed". What needs to be done, as though this were a formal proof :lol: , is to then demonstrate that as a consequence of class society alone that wage desperaties would exist. I'm too lazy to do that right now, maybe some anti-Leninist would.

[Cryotank Screams]

Originally posted by [email protected] 17, 2007 02:12 pm
But as we always tell the capitalists in the OI "You can't determine class by income", you determine it by its relation to the means of production and labor.
Well, I know that, but the huge personal income gap, made me wonder, how much control say a Soviet ministry official had over say, a textile worker, which is why I asked questions like, did this wage gap create new classes, or class struggle, with in the Soviets, as it would say in a capitalist society, however I know the Soviet system, was vastly different from capitalist countries, which is why I am looking forward to hear from Soviet defenders.


It's interesting that the managers, foremen, etc. are paid 3x or more what a lawyer makes. A researcher gets 5x as much as a physician.

Indeed.


I'm curious what the defenders of the USSR will say

As am I, which is why I am disappointed, that no one else has posted on this topic, as of yet.

[bezdomni]

Why expect the USSR to have completely equal wages from the get-go? That would be contrary to the LTV.

[вор в законе]

Originally posted by Cryotank Screams

So the main questions I have, is this economic inequality of distribution of personal income in the Soviet Union, a betrayal of Communism and it’s ideals? Or was this just out of necessity for the times given the historical and material conditions, and the challenges faced by the Soviets? Would or should this inequality be fixed in a new Communist government system? Why did Stalin stop the NEP as a comprise to Socialist ideals, but abolished the economic equality? What impact did this have on the class struggle? Did this create new classes?

Waaaaait a minute.

When did Marx said that Socialism is about economic equality? Moreover, why should there be an economic equality? Because if you advocate a policy of economic equality, then that means that there should be someone, arguably the State, who should redistribute the income.

The reality is that communists don't advocate economic equality. In fact, economic equality is impossible. You would have a State intervention in the means of the production at every case. And as we all know, Socialism is about the collective ownership of the means of production by the workers, not the State.

In Socialism, people are paid based on what they produce. If you aren't interested to work or if you are lazy, then you get nothing. Furthermore, we communists aren't against the rich because they are rich but because they become rich by exploiting us. If in Socialism someone works his ass of everyday and makes a lot of money, I don't understand why should that individual lose his money? He worked hard to earn them by not exploiting anyone. If you take his money to ''help'' an individual who expects everything from the State, then you are a fascist.

In Socialism the wage differences are defined in two ways: The first is the value and amount of the things that you produce (whether they are commodities or services) and by democratic procedures in every business or company (since all industries, businesses, companies are democratically held by the workers of each business, company etc).

PS: Just to avoid confusion, I don't consider Soviet Union a Socialist State. Soviet Union was a class society, the owners of the means of production were either high rank members of the Communist Party and the State.

[Cryotank Screams]

Originally posted by [email protected] 18, 2007 04:00 pm
Why expect the USSR to have completely equal wages from the get-go? That would be contrary to the LTV.
Would mind elaborating? Also, I assumed that they did, but I realize that was probably not being realisitc on my part, but I definately don't see why, the very large wage income gap.

[bezdomni]

Um...have you read Capital? o_O

The labor theory of value is the proposition that the value of a commodity is equal the quantity of socially necessary labour-time required for its production. Obviously, this includes labor itself.

It takes more labor-time to train a doctor than it does to train a mailman, thus the labor power of a doctor has more value than that of a mailman; which is why the doctor would get paid more than the mailman. This is not to say that the doctor is better than the mailman or that he has worked harder...simply that more effort has gone into training him to do his job.

It would be destructive to a socialist economy to immediately equalize all wages, as well as completely contrary to the Labor Theory of Value and Historical Materialism. Obviously, parts of capitalist production will continue into early socialism (such as inequality of wages).

What socialism seeks to change is PROPERTY RELATIONS, not wages...Although the two are somewhat dependent upon one another.

[The Author]

Originally posted by Cryotank [email protected] March 17, 2007 12:56 pm
So the main questions I have, is this economic inequality of distribution of personal income in the Soviet Union, a betrayal of Communism and it’s ideals? Or was this just out of necessity for the times given the historical and material conditions, and the challenges faced by the Soviets? Would or should this inequality be fixed in a new Communist government system? Why did Stalin stop the NEP as a comprise to Socialist ideals, but abolished the economic equality? What impact did this have on the class struggle? Did this create new classes?

There's a written transcript of a discussion Stalin had with some economists in the U.S.S.R. on why wage equalization had been eliminated. It's called Five Conversations with Soviet Economists (http://revolutionarydemocracy.org/rdv4n2/5convers.htm), written from 1941 to 1952. It was a discussion on a textbook discussing political economy which Soviet economists had been writing and editing, and Stalin, Molotov, and other members of the Party participated in editing it. By the way, as an aside, this textbook is actually available online, see Political Economy (http://www.kibristasosyalistgercek.net/english/polecon/FrmIntIndex1.htm). Khrushchev participated in writing a later edition of this book, and Mao wrote a critique about it (http://www.marx2mao.com/Mao/CSE58.html#RN).

But anyway, getting back to the discussion of the five economists, this is what Stalin said. He essentially said something similar to what RedBrigade and SovietPants have said earlier in this thread, and this might prove enlightening:


On Wages and Workdays

A few words about wages, work-days and incomes of the workers, the collective farmers and the intelligentsia. In the textbook it has not been taken into account, that people go to work not only because Marxists are in power and there is a planned economy, but also because that it is in their interest, and that we have grasped this interest. The workers are neither idealists nor ideal people. Some people think that it is possible to run the economy on the basis of equalisation. We have had such theories: collective wages, communes in production. You will not move production forward by all this. The worker fulfils and over-achieves the plan because we have piece-work for the workers, a bonus system for the supervisory staff and bonus payments for farmers who work better. Recently we have enacted the law for the Ukraine.

I will tell you of two cases. In the coal industry a few years ago a situation was created when the people working overground received more than the people working in the mines. The engineer sitting in the office received one and a half times more than those who worked in the mines. The top leadership, the administration want to attract the best engineers to their departments so that they sit by their side. But for the work to move ahead, it is necessary that people have an interest. When we increased the wages for the underground worker, only then did the work move forward. The question of wages is of central importance.

Take another example: cotton production. For four years now that it is moving uphill only because the procedure of paying the bonuses has been revised. The more they produce from a unit of land the more they get. They now have an interest.

The law on bonuses for collective farmers in the Ukraine has exceptional importance. If you go by peoples' interests they would move forward, would upgrade their qualification, work better and will clearly see that this gives them more. There was a time when an intellectual or a qualified worker was considered fit only to be social outcasts. This was our foolishness, there was no serious organisation of production then.

People speak of the six conditions of Stalin. Come to think of it -- what news! What is said there is that which is known all over the world but has only been forgotten with us. Piece-work for the worker, a bonus system for the engineering and technical staff and bonuses for the collective farmers -- these are the levers of industrial and agricultural development. Make use of these levers and there would be no limit to growth in production and without them nothing is going to work out. Engels has created a lot of confusion here. There was a time when we used to boast that the technical staff and the engineers would receive not more than what the qualified workers get. Engels did not understand a thing about production and he confounded us too. It is as ridiculous as the other opinion that the higher administrative staff must be changed every so often. If we had gone along with this everything would have been lost. You want to leap directly into communism. Marx and Engels wrote keeping full communism in view. The transition from socialism to communism is a terribly complicated matter. Socialism has yet not entered our flesh and blood, we still have to organise things properly in socialism, we still have to properly set up distribution according to work.

We have filth in our factories, but we want to go straight to communism. But who will let you in there? We are sinking in garbage and we want communism. In one large enterprise about two years ago they started breeding fowl -- chicken and geese. Where does all this lead you to? Dirty people would not be allowed entry into communism. Stop being swine. And only then talk about entering communism. Engels wanted to go straight to communism. He got carried away.

Molotov: On page 333 it is written: 'the determining advantage of the artel consists in that it correctly combines the individual interest of the collective farmers with their social interests, that it successfully harmonises the individual interests of the collective farmers, with the interests of society'. Such a formulation of this question is avoiding the question. What is 'correctly combining the individual interest of the collective farmers with society's interests' ? It is a hollow sentence which has very little of concrete substance in it. You get something like 'all that exists is rational'. In fact it is far from being so. In principle we have come to a correct solution of these questions, but in practice there are a lot of things that are wrong and out of place. This needs to be explained. The social economy has to be placed first.

It is necessary also to pose the question of piece-work wages. There was a time that when this question was very complicated, the piece-work system was not understood. Visiting workers' delegations, for example, of French syndicalists, would ask why do we support piece-work and the bonus system, after all under capitalist conditions workers are fighting against it. Now everyone understands, that without a progressive system of payment and without the piece-work system there would have been no Stakhanovites and front-rank workers. In principle this question is clear. But in practice a lot of disgraceful things are happening with us. In 1949 [sic.--ed.] we are forced to go back and repeat the decisions of 1933. Spontaneity is pulling us to the opposite side. The top echelons want the best engineers to be by their side. We have not yet grown up to become as neat and tidy as we would like to be. There is a lot of colouring up of our reality, and we have not at all become as clean and tidy as we want to be. We must criticise our practice.

That last bolded point is a pretty good indication of the rising revisionist rot in the U.S.S.R. which culminated in the takeover by the Khrushchevites.

But what Stalin says is indicative that wages have been made unequalized as a material incentive for workers to produce more. Remember, that in a socialist society, as Marx said in "Critique of the Gotha Programme," there is still inequality between workers who are physically stronger and workers who are handicapped, or workers who have large families and workers who live by themselves. For instance, you have two workers in a car assembly factory, and they both work at exactly the same positions and perform the same exact abilities. The first worker lives by himself. The other worker has a wife (or husband, perhaps, as a same-sex couple?) and a family of five children. When determining wages, the worker with the family of five needs a higher wage than the worker living by himself, because one needs to take into account the fact that the worker's family needs clothes, food, furniture, a larger apartment or house, and all the accessories necessary to make life more comfortable. The other worker only requires a wage necessary for his personal comfort and the extra income would instead go to workers who need the money more than he does. If you equalized the wages, then the worker with the family suffers because he does not make enough to support his family. Hence the point of wage unequalization.

Another example is a worker who is a coal miner, and a worker who repairs computers. The worker who is a coal miner must get the higher wage, because he toils in a dangerous working environment prone to accident. During the socialist construction the coal miner will have to produce a lot, and risk his life under such rough conditions more than the computer repairman would in only repairing hardware and computer accessories. Hence, the coal miner's wage will be higher, to compensate for his time spent working in the mines.

Should material incentives be enough? No. Moral incentives as suggested by Che Guevara and Mao in increasing the cultural well-being of the workers and inspiring them to create the new communist society will be necessary as well, along with material incentives during the transition.

Here's the rest of what Stalin said about wages in that same discussion:


The second serious shortcoming of the textbook is that there is no analysis of wages. The main problem has not been elucidated. Wages are considered in the section on pre-monopoly capitalism as Marx has done. There is nothing about wages under conditions of monopoly capitalism. A lot of time has passed after Marx.

What are wages? Wages are a minimum for livelihood plus some savings. It is necessary to show what is the livelihood minimum, nominal and real wages, and to demonstrate it vividly and convincingly. We are fighting capitalism on the grounds of wages. Take the vivid facts of contemporary life. In France, where you have a falling currency, one receives millions, but you cannot buy anything. The English shout that they have the highest level of wages and cheap commodities. And they all the time hide the fact that though nominal wages may be high , they are still not enough to provide the livelihood minimum, not to talk about savings. In England the prices for certain products, bread and meat, are low, but the workers get them on ration in small quantities. Other products are bought in the market at inflated prices. They have a multiplicity of prices. And the Americans are very bumptious about their high living standards, but according to their own data two-thirds of their workers are not provided with the minimum livelihood. All these tricks of the capitalists have to be exposed. We have to show, on the basis of concrete facts, to these English workers, who have been for long living off the super-profits and the colonies, that the fall in real wages under capitalism is an axiom.

We could tell them that during the civil war with us everybody was a millionaire. During this war the prices were at their lowest, bread was sold for one ruble per kilogramme but the products were rationed.

With us the calculations of wages are done differently. It is necessary to show on the basis of concrete facts the situation regarding the real wages in the country. This has a great revolutionary and propaganda importance.

It would be correct to deal with the question of wages in the section on monopoly capitalism and to return to it in contemporary terms.

[Cryotank Screams]

Thank you SovietPants, CritcizEverythingAlways, and Red Brigade! The information provide is very interesting, and I know see the need in the Soviets for the wage differentials, again thanks.