Towards Socialism or Capitalism? (Routledge Revivals) by Trotsky Leon;

Author:Trotsky, Leon; [Trotsky, L.]
Language: eng
Format: epub
ISBN: 9780415623384
Publisher: TaylorFrancis
Published: 2022-04-19T00:00:00+00:00

III

The Rate of Development and its Material Limitations and Possibilities

DOI: 10.4324/9780203102923-3

IN the years from 1922 to 1924 our general industrial revival was mainly dependent on the light industries. In the current financial year, predominance is passing to the branches of industry turning out implements of production. However, even the latter are reviving only to the extent of the utilisation of old capital. During the coming financial year when the basic capital inherited from the bourgeoisie will be working to its full capacity, we shall commence extensive operations in the renewal of basic capital. The whole of the capital expenditure the State Planning Commission makes provision for amounts to 880,000,000 roubles on industry (including electricification); 236,000,000 roubles on transport, 365,000,000 roubles on housing and other buildings, 300,000,000 roubles on agriculture, making a total of over 1,800,000,000 roubles. The new capital included in this sum, that is to say the new savings of the whole economic system, amount to over 900,000,000 roubles. These provisional estimates, not yet finally revised, show a big advance in the distribution of the material resources of the country. Up to the present, we have been working on existing basic capital with small additions. In the future, we shall have to create new basic capital. This constitutes the fundamental difference between the coming economic period and that which is now passing.

In the view of individual business men, say directors of trusts, the rate of development may appear to correspond to the amount of credit obtainable from the banks. “Give me so many millions and I’ll put up a new roof, new lathes, increase output tenfold, halve cost prices, and bring quality up to European standard.” How many times have we heard this said ! But the point is that financing is by a long way not the primary factor. The rate of economic development is determined by the material conditions of the productive process itself. This is very appropriately emphasised in the explanatory notes of the State Planning Commission. “The universal limit of the possible rate of economic development,” it is said in the notes, “a limit conditioning all the separate limiting factors, is the amount of national saving in material form, that is to say, the aggregate newly-created wealth which remains after having covered the needs of simple reproduction, thus forming a basis for extended reproduction and reconstruction.”

Bank-notes, shares, bonds, bills of exchange and other “securities” do not matter in themselves in the scope and rate of our development; they are only auxiliary implements for the calculation and distribution of material values. Of course, from the individualistic, capitalist point of view, and the view of individualistic economics in general, these securities have an independent importance of their own, for they ensure the possessor of a certain amount of material values. But from the national economic point of view, which in our conditions closely approximates to that of the State, securities in themselves add nothing to the actual volume of goods, which serves as a basis for the expansion of production.

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