Unemployment in Russia
If, as the Socialist Party of Great Britain maintains, Russia is broadly State Capitalist, and, as Marx held, that capitalism breeds and needs unemployment why does there appear to be no unemployment in Russia? Is it, as members of the Communist Party claim, that the Russian planning system has abolished unemployment?
It is first necessary to recognise that the term unemployed has two meanings which overlap but are not the same. It means “not working” and also “out of a job”. The difference can be seen from experience in this country. Ideally, from the capitalist point of view all workers on the pay-roll would be fully and continuously working and as soon as work is not available they would be sacked and become out of work. For several reasons this is not always practicable. Owing to weather conditions, as in agriculture and building, it is sometimes impossible to carry on work out-of-doors and impossible to organise alternative work under cover. Also there are industries or services in which it is not possible to secure an even flow of traffic or even to foresee from day to day when the peaks will arise; inevitably therefore, there are periods in which workers on the pay-roll are unoccupied.
In the early post-war years when experience justified the employers’ belief that any falling off of trade would be short-lived it was a fairly widespread practice to keep some workers on in slack periods rather than face the possibility of being short of labour when the expected early recovery came. One of the reasons unemployment has jumped so much in the past few years is that the prolonged depression has destroyed employer’s confidence that recovery will come soon and their case for “hoarding” labour has disappeared.
Some, if not all, of these factors operate in Russia as in Britain. It is known for example, on the admission of Russian authorities, that in part of the Autumn and Winter a third or more of farmers on the state and collective farms have no work to do on the farms. (See Socialist Standard November 1968). There is also in Russia as in Britain a considerable number of workers unemployed in the period between changing from one job to another. Russian sources are quoted in Russia — a Marxist Analysis by T. Cliff to the effect that 36 per cent of the workers in certain areas changed their jobs each year and that the average duration of unemployment was 31 days.
Consequently, the claim that in Russia there is no unemployment and no workers out of a job is not to be taken literally, but this leaves to be answered the more important question why the cycle of expansion of industry followed by depression and heavy unemployment now strongly evident in Britain and elsewhere seems to be absent in Russia.
When Marx wrote about 19th Century British capitalism he assumed free market conditions of production for profit, a working class able to strike over wages, and that failure to make a profit would compel the individual capitalist firm to curtail production, sack workers or go out of business. Under war-time conditions with millions of workers in the armed forces, wages and prices controlled, maximum output demanded and profit guaranteed, unemployment fell to abnormally low levels (Under 1 per cent in some years). Some of these conditions continued after the war when maximum output was in demand to make good wartime destruction and under-investment, and unemployment remained abnormally low. In Russia where war damage and loss of life were incomparably greater the unsatisfied demand for output and the shortage of labour were correspondingly greater and lasted longer than in Britain.
But the great difference between Russian and British industry is that Russian centralised control and financing of production and foreign trade has the result that the failure of a particular factory or industry to maintain efficiency and make a profit does not put it out of business — the loss is borne by the national budget.
On the side of employment and unemployment the evidence is that Russian industry is heavily overmanned.
David Bonavia in the Times (2 February 1972) reviews the situation and concludes: —
“Russia has no unemployment problem, as such, because it is illegal for an able-bodied person not to work, unless supported by a spouse. In practice this means that the state merely accepts the losses from an economic situation which would result in huge unemployment in the West . . . From the individual’s point of view, the Soviet approach to unemployment may be preferable, because it increases his security. From the point of view of the economy as a whole, it is a heavy burden to have large numbers of people drawing their pay for working useless or even counter-productive jobs.
Russian planned agriculture and promises of abundant food supplies have not prevented Russia from having to buy millions of tons of foodstuffs abroad. Recently, in spite of planned expansion of sugar production the Russian government has had to default on an agreement to supply Finland and is a big buyer in the world market. Above all the Russian claim that they had planned control of the monetary situation has seen the rouble become a black market currency in the outside world, selling at a fraction of its nominal value.
For Russia, as a world power, needing more and more to move into world markets, the key question is whether controls and planning can achieve the levels of efficiency of rival powers. In spite of boasts of surpassing American industrial output, the gap between Russia and the USA has not been closed and in the meantime Japan with half the population is fast overtaking Russia.