CRITIQUE OF STALIN'S "ECONOMIC PROBLEMS OF SOCIALISM
IN THE SOVIET UNION"
[1959?]
This book by Stalin has not a word on the superstructure from the
beginning to the end. It never touches upon man. We read of things but
not man. Whether the supply system contributes to economic development
should be discussed. Should there be commodity production or not? The
viewpoint of Stalin's last letter is completely wrong. His basic error ||
is his distrust of the people.
Some of the points he makes in Chapters I, II and III are correct
but other points show his confusion. Thus on planned economy he has not
completed his argument. The rate of economic development of the Soviet
Union was not very great, though greater than that"of capitalism. Stalin
does not make clear the relationship between industry and agriculture, or
between light and heavy industries.
I think the Soviets have disadvantages. They have not seen clearly
the relationship between long-term and immediate interests; they have not
achieved any remarkable development. They walk on one leg while we walk on
two legs. They believe technology and cadres decide everything. They
emphasize specialization but not redness, cadres but not the masses. All
these show that they walk on one leg only. They haven't found the major
contradictions in heavy industry. Thus steel is the foundation, machinery
the heart and coal the food.... We consider steel as the key link, the
major contradiction in industry; in agriculture, we consider grain as the
key link while other products develop proportionately.
Chapter I discusses the administration of laws, but how this is to
be done is not mentioned. We agree to commodity production, the law of
value and- other points, but there are also questionable points. Commodity
production is not necessarily limited to means of consumption. The basic |
viewpoint in the third letter is distrust of peasants.
Basically Stalin I
failed to chart the way from collective ownership to ownership by all the

people. We retain the formula of commodity production and exchange. In
regard to the law of value we want planning and politics in command,
the Soviets pay attention to production relationship only an
gno
p
structure, politics and the role of the people. Without a communist move
ment it is iit^jossible to attain communism.^
(1) ... They confuse two categories: 0°®/®
reflects the objective process in Nature or society independent
*
Another is government laws and decrees which are
^ be^onfused
have only legal effect. But these two categories should not be confused.
1. This law is basically correct but it has two shortcomings:
 a. The subjective activity of the party and the masses is not
\clearly explained.
b. It is incomplete for it fails to point out that the laws and
decrees are correct because they reflect not only the will of the working
class but also the requirements of economic laws.
(2) ... Naturally, in astronomy, geology and other similar processes
men have no way to exercise any Influence, even though they may understand the
law of development. (page 2)
 This argument is incorrect. Man's ability to know and change Nature
is unlimited. Stalin failed to look into future development: What cannot
be done now may be done in the future.
(3) As to the law of economic development and the laws of political
science aS'ecLScf- in the period of capitalism or the p«iod rf social
ism -
the seme thing should be said. Here as rn natural eeience tte law of
economic development reflects the objective law^govera ng
economic development that is independent of man s w . (pag
3. How should planned economy by handled? Not enough attention is
given to light industry and agriculture.
(4) Just because of this Engels said on this point; "The laws of
man's social actions are similar to the laws of Nature that are alien t
man and yet control man and that are opposed to man.
employed by man expertly and will therefore be subjec
o is c
(page 3)
4. Freedom is a natural, objective law which has ^®®^^f®°Snized. It
is opposed to man and independent. But once you recogn ze , you c
trol it.
(5) The special role of the soviet political power is determined
by the following two conditions: First, soviet political power dW
replace a form of exploitation with another form of exploitat on
PP

in revolutions In the past, but eliminated all forms of exploitation; second,
because of the nonexistence of the rudiment of any socialist economy, the
soviet political power had to create a new form of socialist economy.
(page 4)
5. We need to study the certainty of the laws of socialist economics.
At the Ch'eng-tu conference I said: See whether our set of measures (greater,
faster, better and more economical, a three-pronged drive and the mass line)
will catch on and succeed. It will take several or even more than ten years
to find out. In the past there was skepticism about the laws of revolution
but now they have been proved correct by the overthrow of the enemy. People
still have doubts about the success of socialist economy. We still need to
study whether the Chinese way meshes with Chinese economic laws. In my
opinion, if it does generally, it should be all right.
(6) This task is undoubtedly difficult, complicated and unprecedented . (page 4)
6. In the creation of our form of socialist economy we have a Soviet
precedent. We should therefore do better than the Soviets. If we should
fail, it would show that we Chinese Marxists are inferior. The task is as
difficult and complicated as the Soviets'.
(7) It has been said that our national economy has the certainty
of planned (proportionate) development and enables the soviet political power
to abolish the existing economic laws and enact new economic laws. This is
absolutely untrue. We should not confuse our annual plans and five-year
plans with the objective economic laws of national economy based on plans
and ratios, (page 5)
7. This paragraph is the key point.
(8) ... That is to say, the laws of planned development of national
economy enable our planning organizations to plan society's production
correctly. But we should not confuse possibility with reality. These are
two different things. If we want to turn possibility into reality, we should
study, grasp and expertly apply this economic law and formulate plans that
will meet the requirements of economic law. It is incorrect to claim that
our annual plans and five-year plans can meet all the requirements of economic
law. It is incorrect to claim that our annual plans and five-year plans can
meet all the requirements of economic law.
8. The key point in this chapter is that we should not confuse an
objective law based on planned ratios with plans. We have laid down plans
in the past but there has often been conflict. We work blindly, sometimes
producing too much and sometimes too little; we don't know what to do. After
going through tortuous and saddle-like training, we began to use our brains
and try to devise a new way. We laid down 40-article Agriculture Program
which is being put into effect. We are formulating 40 new articles. After

three year s hard struggle, more will be developed. After thorough discussion, more will be done. Whether or not we can succeed will be proved
through objective practice. For eight years we did not know that steel
should be the key link in industry. This was the major contradiction in
industry. Ttos_was also moni^. Of the large, medium and small [enter-pr sesj, large is the mainstay. Between the central and local government
the centr^ government is the mainstay. A contradiction has two sides, one
of which is the principal one. Eight years' achievements are of course
important but it was a groping process. We cannot claim that we have
correctly planned production or have abided by all objective laws. The
woe party lays down the plan, not just the Planning Commission, or the
cono c Commission, but party units of all grades and all party members.
Theoretically, what Stalin says here is correct but he did not make a
meticulous study and provide a fuller explanation. The Soviet Union made
no distinction between large, medium and small [enterprises], nor between
local and central governments, and failed to promote industry and agriculture simultaneously. It did not walk on both legs. Its regulations and
systems held the people in bondage. On our part, we did not make a full
study, or had full control, and therefore our plans do not fully reflect
the objective laws.
(9) Let us analyze Engels* formula. This formula of Engels' cannot
be termed as clear and definitive because it fails to point out whether
society possesses all or a part of the means of production, i.e., whether
all or a part of the means of production shifts to ownership by all the
people. Engels' formula may be interpreted either way. (page 7)
9. This paragraph helps make an analysis. The problem is to divide
t into two parts. The assertion that the means of production are not
commodities deserves study.
_
 page 7 of the original book, regarding "2. The Problem
of toi^odity Production under the Socialist System," Chairman Mao comments
as follows:)
10. The conditions of the existence of commodities are not fully
explained. The existence of the two sysi-ems of ownership^is the principal
premise for commodity production, but conmntHtv production in the final
analysis is related to the force of production. For this reason, even if
socialist; ownership by alL-the people is set up. commoditv exchange merchandise is still necessarv in certain ai-oatj,
(11) Thus we can see that in such countries as Engels referred to,
^
 ustry as well as in agriculture, capitalism and centralization of
production are fully developed so that they are able to take all means of
production and transfer them to ownership by all the people. Engels there-jiore felt that in such countries simultaneously with public ownership of
all means of production, commodity production should be eliminated. This is
lundoubtedly correct. (page 8)
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11. Stalin^s analysis of Enpels^ formula is correct. Some of us are
inclined to eliminate commodity production completely, frowning on commodity
production, considering it as an aspect of capitalism. But for the solidarity
of hundreds of millions of peasants it is still necessary to vigorously
develop commodity production and to increase currency. Th^® concerns the
thinking of hundreds of thousands of cadres and the solidarity of 500^
million peasants. We now possess only a part of the means of production.
Some people seem to think that we should immediately proclaim ownership y
all the people in order to deprive the medium and small producers of their
production and not to announce whether ownership is ultimately invested in
the commune or the county. Abolition of commodities and commodity production
and the announcement of ownership by all the people would only deprive t e
peasants of their production. Toward the end of 1955 procurement an^
purchases brought less than 90 billion catties of grain. It was a disturb
ing problem. Everybody talked about food and every household discussed
unified purchasing. It was still purchase, not allocation. Finally, we
decided to handle 83 billion catties and this eased the tension. I don t
know why people suddenly seem to have forgotten the problem.
(12) Here I put aside the problem of foreign trade which has great
significance in Britain's national economy. I feel that only after a study
of this problem and after the proletariat in Britain has won political power
and all means of production are nationalized can the fate of commodity production be decided, (page 8)
12. The fate hinges upon the problem whether commodity production
should be abolished or not.
(13) But there is a problem: If in a certain country, as has
happened in this country, circumstances are favorable for the proletariat
to win political power and overthrow capitalism... the peasants could for a
long period of time be thrown into the camp of the enemy of the proletariat,
(pages 8 and 9)
13. In short, the law of commodity production was not grasped. Chinese
economists are Marxists but in economic practice Marxism falls short; its
thoughts are confusing. If we should commit any blunder, we would lead the
peasants to the enemy.
(14) Lenin's answer may be summarized as follows:
a. Do not let go favorable conditions for seizing political
power. The proletariat should seize political power. Don't wait "^til
capitalism has rendered millions or tens of millions of medium and small
individual producers and inhabitants bankrupt.
(15) b. Deprive industry of the means of production and transfer
them to ownership by all the people.

(16) c. Gradually unite all medium and small individual producers
in producers^' cooperatives. In other words, unite them in large—scale agricultural enterprises and collective farms,
C17) d. Develop industry by all means and lay the foundation of
modern technology for large-scale production in collective farms. At the
same time refrain from depriving collective farms of materials; on the contrary, supply them speedily with first-class tractors and other machinery.
(18) e. For economic cooperation between cities and villages and
between industry and agriculture, maintain for a definite period of time
commodity production (through buying and selling exchange), which is the
only formula acceptable to the peasants for economic liaison with cities,
and exert full efforts to develop soviet trade, i.e., state trade and
cooperative-collective farm trade and expel all capitalists from commodity
circulation.
The history of our socialist construction proves that the way of
development charted by Lenin is correct.
(19) Beyond doubt this way of development is a sure way to victory
over capitalist countries which have sizeable medium and small producer
classes, (pages 9 and 10)
14. This analysis is correct. In China there has been progress.
The following five items are all correct.
15. Our policy towards the national bourgeoisie is redemption.
16. We develop people's communes on a larger scale.
17. We are doing it.
18. Those who are opposed to commodity production are wrong. For
commodity production we have to refer to Stalin who in turn referred to
Lenin. Lenin said: Develop commerce with full vigor. On our part, we
should say: Develop industry, agriculture and commerce with full vigor.
The problem is a peasant problem. Some people think that peasants are more
brilliant than workers. These five items we either have carried out or are
carrying out. Some are still developing. For exaii;>le communes run industry,
and industry and agriculture are developed simultaneously.
19. Lenin said the same thing,
(20) Never look upon commodity production as independent and detached from the surrounding economic conditions. Commodity production is
even older than capitalist production. It existed under the slave system
and even served that system.... However, though it set down a number of
conditions for capitalist production, it did not lead to capitalism.

(21) You may hav& noticed that commodity production in our country has not
expanded as unreservedly and allT-emhracingly as under capitalism* C22) As
a result of such determinative economic conditions as the establishment of
public ownership of means of production, and the elimination of hired labor
and exploitation, (23) it has been subject to strict restrictions. May I
ask why commodity production in a country such as ours cannot within a period
of time lead to capitalism while it is serving our socialist society? (page 11|
20. This statement is rather forced,
tribute to the capitalist system.
Commodity production did not con-
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21. The Plenary Session of the Second Central Committee brought up the
policies of utilization, restriction and reform.
22. We have this condition completely.
23. Entirely correct. We don't have these conditions and situations
any more. People who are afraid of commodities are afraid of capitalism.
They don't know that after the elimination of the capitalists we can
develop commodity production on a large scale. Our country is still backward in commodity production, even behind Brazil and India. Commodity production is not isolated. It depends upon what it is associated with —
capitalism or socialism. With capitalism it is capitalist commodity production; with socialism it is socialist commodity production. In China commodity
production began in ancient time. In history commerce began in the Shang
dynasty. King Chou of the Yin dynasty who was well-versed in both literature
and military science, Chin-shih-huang and T'sao T'sao were wrongly branded as
evil men. This is incorrect. If we believe all that the books say, it is
better to have no books. In capitalist society there is no socialist system
but actually the working class and the socialist ideology exist in capitalist
society. What determines commodity (production) are the prevailing economic
conditions. Can commoditv production be looked upon as a useful instrument
to promote socialist production? I think it abiectlv serves socialism. This
problem may be discussed by cadres.
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(24) Some people say that after the establishment of public owner
ship of means of production and the eradication of hired labor and exploitation
in our country, commodity production will have lost its significance. For this
reason, commodity production should be abolished, (page 11)
24. If we change "our country" to read "China," it would be very
interesting.
(25) ... In our country today two basic forms of socialist produc
tion exist: One is the whole people of the state; the other cannot be
called the collective farms of the whole people. (page 11)
25. Here "today" refers to 1952, 35 years after the [Soviet] Revolution.
We are but 9 years [old].

Here we talk of two basic fongs. Not only land and machinery but
also labor, seeds and other means of production are owned by the people's
commune, Therefore all products are the commune's possessions. Do not
think that this is something the Chinese peasants cannot achieve. The
secretary of the Hsiu-wu County, Honan committee worried whether the state
would pay wages in time of famine after institution of ownership by all the
people and the supply system. When there is a bumper harvest the state takes
the public grain and yet it cannot afford to pay wages. Thus with either a
famine or a bumper harvest there are difficulties. We have to consider this
problem for the peasants. Marxists ought to consider this problem. Our
commodity production should be fully developed; we have to be patient for
15 or more years. After decades of war, we still have to be patient. In
the liberation of Taiwan and in socialist construction we also need patience;
we cannot expect victory at an early date.
(26) ... This is a special problem that requires separate discus
sion. (page 12)
26. Stalin dodged this problem. He did not find any measure nor any
suitable form. (This refers to the question of transition from collective
farms to [ownership] by all the people.)
(27) It may be seen here that our commodity production is not
ordinary but special commodity production in which no capitalist participates.
This type of commodity production is basically related to the commodities of
the associated socialist producers (the state, collective farms and cooperatives) . Its scope of activities is confined to individual consumer goods and
apparently cannot develop to become capitalist production. Moreover, it is
destined to jointly develop with "currency economics" and strengthen socialist
production, (page 12)
27. Its activities are not confined to individual consumer goods. Some
means of production are commodities. If agricultural products are commodities
and industrial goods are not, how are we going to exchange? If in this paragraph we change "our country" to "China" it would really be interesting to
read.
In China not only consumer goods but also agricultural means of production are to be supplied. Stalin did not sell means of production to peasants
but Khrushchev changed the policy.
(28) On page 13 of the original book Chairman Mao's comment is as
follows:
28. The demarcation between socialism and communism and the demarcation
between collective ownership and ownership by all the people are two problems
which should not be confused. The commodity production problem left over from
collective ownership is aimed at consolidating the alliance between industry
and agriculture and developing production. Some people say that the peasants

strongly helieye- tn comjnunlsmi They toured the countryside and were Impressed
with the peasants' high spirits. They are inclined to think that the peasants
are stronger than the workers. We should seek substantive proof in the
peasants' true spirit of communism and, more importantly, in the ownership
of the commune. Including its collective ownership of the means of production
and means of consumption. Like the secretary of the Hsiu-wu County committee,
it should develop commodity production and not push forward blindly.
(29) Moreover, I think we should discard certain other concepts
taken from Marx's Das Kapital which analyzes capitalism and is forced upon
our country's socialist relationships....Obviously the concepts (domains)
which Marx uses are completely compatible with capitalist relationships.
But since the working class is not deprived of political power and means of
production and, on the contrary, is holding political power and possessing
means of production (30), it is surprising that these concepts should still
be used. (31) At present in our system, to say that labor is a commodity
and that workers are "hired" is absolute nonsense. It is like saying that
the working class which possess means of production is hiring itself and
selling its own labor to itself.... (page 13)
29. Especially the means of production of industrial departments.
30. Large-scale development of commodity production is not for profits
but for the peasants, for the alliance of industry and agriculture, and for
the development of production.
31. Especially after the rectification caii5>aign. After the rectification and anti-rightist campaigns, labor is no longer a commodity. It does
not serve the jen-min-pi [currency] but, rather the people. This makes labor
no longer a commodity.
(32) People sometimes ask: In our country under the socialist
system does the law of value exist? And does it function? (page 14)
32. The law of value has no regulating function. Planning and politics
in command have that function.
(33) ... Under our system the law of value will not function as a
production regulator. (page 16)
33. In our society the law of value has no regulating function, i.e.,
no determining function. Planning has the determining function. For instance,
hogs, steel and iron are not regulated by the law of value but by planning.
Note:
1. The first, second, third and fourth sections of this article are
comments on the whole book. What follow are comments on each chapter, each
page. Preceding the comments are Stalin's original text based on the

People's Publishing House translation of
January 1938. Page numbers are given to facilitate examination an
to enable better understanding of Chairman Mao s comments.
— The printer