The Paradox of Marxist Economics

This chapter presents a popular anecdote during the Soviet era that quite aptly depicts the contradictions of the system at that time. The concept of economic stagnation is presented, which reflects the economic reality of that time. However, Marxist economic theory, which was the basis for creating a new, more advanced economic system, formed a completely different image of this system. At the moment it seems like a dogma far removed from reality. This chapter, therefore, opens up a discussion and raises questions that are then attempted to be answered. Since all these questions are quite complex, they cannot be answered directly and unequivocally, but only gradually in the remaining chapters of this book, based on the statements and thoughts of the authors of the socialist economy project or those who implemented it, while discussing practical matters related to the implementation of these concepts and thoughts.

This chapter presents the development of Marxist economic theory, including its foundation, its main statements, and concepts, such as surplus value and capital, that underlie the capitalist exploitation of labour. An analysis of how these concepts are defined by Marxist economic theory and how they are currently understood in the context of classical economic theory is presented. At the same time, this chapter examines the emergence and development of capitalist business cycles and their consequences for the country's economy, at the same time presents a radical Marxist approach to these cycles and the chaotic development of the capitalist economy, and suggests ways to eliminate the causes of the emergence of these cycles.

This chapter focuses on the economic contradictions of the capitalist system. Here are three main reasons for the collapse of the capitalist system, related to the problems of overproduction of goods, capital accumulation, and the constant decline in the capitalist rate of profit. At the same time, the assumptions of the emergence of socialism as a new social economic system that will have to replace capitalism are revealed. Here, the role of the state in socialism is assessed, as well as the political actions of the proletariat in creating a new socialist order. Attention is drawn to why, from the point of view of Marxists, the proletarian revolution cannot be national, but must be global in nature.

This chapter talks about what the principles of functioning of the new socialist system should be. K. Marx's approach to how the total or general social product should be created and used under the conditions of a new socialist economy, and at the same time how the value created during necessary and surplus labour time should be distributed. There is a discussion about how the value of labour power is determined and in what form workers receive the reward for their work and what is socialist money. This chapter reveals the concept of socialist commodity-monetary relations and the law of value in socialism. On that basis, it is shown how the newly created socialist model of society works and the most important features of the planned economy are presented.

This chapter is devoted to the description of the new communist order in the context of Marxist economic theory. The chapter presents the classical concept of marginal productivity and utility theories as a possible basis for the creation of a communist society “for each according to needs”. Needs and consumption are understood here as having a limiting value, which is related to a person’s physical capabilities and propensity to consume. The main focus here is on the self-awareness of the members of the communist society and their education related to the development of a culture of smart consumption. Since Marxist economic theory is based on the assumption that technological progress in the new society is a self-evident process that takes place objectively, since all members of society “work for themselves”, therefore the concept of “disposable time” is put forward. The duration of disposable time becomes relevant when considering the unlimited productivity possibilities of technology in relation to the limited consumption possibilities and habits of people.

This chapter deals with the internal contradictions of the socialist system. The first contradiction arises between the organisation of the socialist production process (socialist productive relations) and the distribution of its results. The chapter also draws attention to the concept of labour exploitation, universal work obligation in socialism, and its connection with the level of development of society. At the same time, the distribution of the added product, its capitalisation, and the creation of consumer funds are examined. The second contradiction of socialism speaks of the deepening discrepancy between the development of productive forces and the aggregate demand of society. The significance of the state production monopoly for the level of development of productive forces and its influence on the formation of aggregate demand is discussed here.

This chapter presents K. Marx and F. Engels’ basic attitudes to the practical implementation of the socialist revolution, which are later “creatively” developed by V. Lenin, creating his theory of the transformation of capitalism into imperialism. Here, it is noted where V. Lenin’s approach coincided with the opinion of the classics of Marxism and where their approaches differed. Next, the Soviet model of socialism is examined, which is based on a specific conception of the state associated with iron discipline and the hegemony of one social class. This chapter reveals the role of the Communist Party as the leading political force in the new state and the conditions that allowed for the formation of a new class of political nomenclature. The main focus is on the creation of a vertical system of power and the relationship of the leader of the proletariat with the new political nomenclature.

This chapter is dedicated to answering the question, is the planned economy capable of eliminating capitalist business cycles and balancing the country's economy, guaranteeing its development? The chapter also draws attention to the fact that the subsequent socialist economy in the practice of the USSR also developed cyclically, and it was characterised by periodic slowdowns in economic growth that ended in stagnation, followed by economic recovery and gradual growth. It is discussed what factors had the greatest influence on such economic development, which gave birth to the so-called administrative cycles, partly reminiscent of capitalist business cycles. The growth of the level of centralisation of the country's economy is indicated as a fundamental factor here, which is manifested by the periodic strengthening of the vertical influence of the government in the process of managing the country. This chapter distinguishes three main administrative cycles in the period from 1917 to 1984 and their manifestation in the context of the economic development of the USSR.

This chapter discusses the specifics of the Soviet economic model and the problems associated with its practical functioning. The factors that hindered the dynamics of the socialist economy, hindered the improvement of production quality and the reasons why socialist competition could not replace capitalist competition, are defined. This chapter highlights the peculiarities of foreign trade and why the "iron curtain" is not a political consequence of a closed economy, but an economic necessity for its functioning. Later, the reasons that led to the formation of the "second economy" and its establishment are highlighted, its structure is shown, and the peculiarities of the functioning of this economy in a socialist society are discussed.

This chapter is devoted to an analysis of Chinese socialism and a discussion of its distinctive features. Here, an attempt is made to determine to what extent and in what period this Chinese economic model conformed to the concept of Marxist theory and to what extent it differed from it. The main focus here is on the analysis of the manifestation of two Chinese administrative cycles and their dynamics in the period from 1949 to 1978. In addition, this chapter discusses the conditions that led to the announcement of the “Great Leap Forward” policy and why it was necessary for the Chinese economy. The most important features of the implementation of this policy are indicated, as well as its end, and its final results are also defined. Later, the assumptions of the second administrative cycle—the “cultural revolution” and the course of its execution—are analysed. Much attention is devoted to clarifying the similarities and differences between these Chinese cycles and their comparison with the administrative cycles of the USSR. Finally, the historical implications of the results of these cycles are discussed. Please check the sentence “Discusses the conditions that … for the Chinese economy” and provide the subject of the sentence to have clarity.The sentence should be the following: 'In addition, this chapter discusses the conditions that led to the announcement of the "Great Leap Forward" policy and why it was necessary for the Chinese economy.'

This chapter provides an assessment of socialism as an economic system in the historical context of societal development. A lot of space is devoted to the practical features of socialism, and its correspondence to the theoretical Marxist model is analysed. There is a debate whether the transformation of the capitalist economy into socialism promotes the progress of society. The similarities between serfdom and socialism characteristic of the feudal system are discussed, the reasons for this phenomenon are revealed. The conclusion is reached that in practice capitalism is a more advanced form of economic life because it is able to take into account human nature and its desires. The concept of egoism as an engine of social development, conditioning people’s motivation and opening the way to progress, is revealed. Practical examples are given to support the correctness of this conclusion.

This chapter examines China’s economic form, which was implemented after 1978. The similarities and differences between the views of the two leaders of the Communist Party, Den Xiaoping and Mao Zedong, are shown, especially in the context of the development of commodity-monetary relations, which determined the priorities of the country’s economic development, as well as their correspondence to the theoretical dogmas of Marxism. The new concept of “market socialism”, its emergence, and the prerequisites for its practical implementation are revealed. Arguments are presented that allow Chinese leaders to maintain the opinion that socialism continues to be built in this country and what are the specifics of Chinese socialism. The role of state-owned enterprises and corporations and their influence on China’s economic growth in relation to the private sector is analysed.

This chapter focuses on the new economic reform that was attempted in the USSR after 1985. The concept of new economic definitions such as “perestroika” and “uskorenije” and its relationship with the socialist doctrine of the time is presented. Here is a discussion of what influence the process of political democratisation had on the country’s economy. Here, attention is drawn to the relationship between democracy and socialism in real society, and to what extent democracy helps or hinders the strengthening of socialism. The chapter analyses exogenous factors such as oil prices, the Cold War, and the Chernobyl accident, as well as endogenous factors such as the anti-alcohol campaign, restrictions on the development of the private productive sector such as cooperatives, and the lack of public capital investment. These factors had a decisive influence on the process of degradation of the country’s economy.

This chapter examines the efforts of the leadership of the Communist Party and the Soviet Union to preserve socialism as an economic system. The main focus here is on characterising the process of economic collapse of the USSR and evaluating the possibilities of stopping this process. Analyses the August coup, its assumptions and progress, as well as other attempts to reanimate socialism and start the fourth administrative cycle. The Belovezh Agreement, which decided the collapse of the USSR, is discussed; the causes and consequences of this collapse are named.

This chapter is devoted to finding out whether socialism, which can be described in Marxist economic terms, has completely disappeared, or whether some elements of it still exist today? Here, the main focus is on the “immortal vertical of power”, which is still very popular in some post-Soviet states. This chapter analyses how this element of the Soviet government is able to adapt to the new conditions of the market economy. Practical examples of the practical manifestation of this power vertical are given. At the same time, a discussion is presented on how all this should be evaluated and possible future perspectives can be predicted.

The goal of Marxist economic theory was to eliminate the inherent flaws of capitalism as a system—industrial business cycles in which goods are overproduced, a reserve labour army is formed, and economic chaos dominates. This theory provided for the development of a new socialist farming model in which private property of capital goods is abolished, all capital goods are socialised, and the entire global economy is governed from a unified centre.