It is claimed by many that the Russian Government has discovered a means of developing Russian industry on Socialist lines and free from the disturbing effects of the world trading conditions that affect the other capitalist countries. Actually, the more Russian industry enters into the world market as importer and exporter, the more Russian industrial conditions will be affected by conditions outside.
For example, the world slump in prices has hit Russian industry as badly as any, and has necessitated hasty and difficult modifications of the so-called Five-Year Plan. Estimates were based upon the exporting of certain quantities of goods at certain prices, the yield from which was to be used for machinery and other imports. Owing to the unforeseen slump, Russian exports in January and February of 1931 decreased in value by nearly one-fifth as compared with the corresponding period of 1930, and this in spite of a big increase in the quantities of goods exported. The output of the exporting industries had to be increased above the planned amount owing to the fall in the prices obtained for the exported goods in the world market, and in order to pay for the imports. The machinery and other imports either have not fallen in price at all, have not fallen as heavily, or have been contracted for at a stated price. The final result has been that imports have had to be curtailed. The imports for January and February, 1931, were one-third below those for January and February, 1930. Thus does capitalism frustrate attempts at planning.
Mr. Fenner Brockway, the new Chairman of the I.L.P., writing in the New Leader (April 17th), assumes that Russian industry is being run on a “ Socialist basis.” This is quite incorrect and indicates either a misreading of the Russian industrial system or—more probably—a failure to grasp what constitutes Socialism. In Russia, as elsewhere, goods are produced, not for use, but for sale. The producers are a wage-earning class with no effective control over the machinery of production. There is great inequality, as in other capitalist countries. The first charge on industry is the payment of interest to the investors in the State loans. The way in which inequality of wealth is growing is shown by the increasing yield from the graduated income tax. Already the yield is over £60 millions a year. The Government is now itself catering for the wants of monied people by opening shops at which goods are sold at rates far above the official prices.