Socialist Commodity Production

The production of products exchanged on the basis of public ownership of means of production.

As commonly known, Marx and Engels had focused to analyse the commodity production under the condition of private ownership.

They pointed out that there are two basic conditions for the emergence of commodity production: one is the social division of labor, which constitutes the general basis of commodity production，the other is private ownership of means of production. Only when the means of production and products belong to different owners and each commodity producer has different interests, can they exchange their own products. According to this point of view, Marx and Engels once predicted that with the elimination of capitalism and the establishment of communism in the world, commodity production will die out. Marx pointed out: “Within the co-operative society based on common ownership of the means of production, the producers do not exchange their products; just as little does the labor employed on the products appear here as the value of these products.”

After the victory of the October Revolution, the wartime communism practiced by the Soviet regime was not only a policy, but also an attempt to make a direct transition to communism. It went beyond the level of economic development and people’s understanding of Russia at that time, and ignored the role of commodity production and the law of value. The new economic policy is to establish economic ties between urban and rural areas by making full use of the relationship between commodity and currency, making full use of the market, under the condition that the country under the dictatorship of the proletariat grasps the lifeline of the national economy, at the same time, the capitalists are excluded from the circulation of commodities through competition. However, after the socialist transformation has been basically completed and the public ownership of the means of production has been established, it is not clear whether such a socialist economy is a commodity economy in theory. It was not until 1952 that Stalin published his Economic Problems of Socialism in the U.S.S.R., and he said that “commodity production and commodity circulation are still necessary things in China, just as Lenin announced that it was necessary to expand commodity circulation with all his strength about 30 years ago”. However, he thought that the means of production circulating within the system of ownership by the whole people was not commodities, and he proposed to restrict the production of commodities and the role of law of value, trying to make the transition from commodity exchange to product exchange as soon as possible.

When reading the Economic Problems of Socialism in the U.S.S.R., Mao Zedong affirmed Stalin’s statement on the existence of commodities and commodity production in the Soviet Union but criticized Stalin’s view which advocated that the means of production were not commodities and that agricultural machinery could not be sold to farmers. Mao Zedong argued that under socialism commodities should not be limited to personal consumer goods and means of production should also be regarded as commodities. Even if we enter a single socialist society of ownership by the whole people, there will still be commodity production and commodity exchange. After that, he put forward that “the law of value” is a great school. Only by using this law can we teach tens of millions of cadres and tens of thousands of people and build our socialism and communism. Otherwise, nothing is possible.”

In his late years, Mao Zedong put forward his judgement that commodity production and currency exchange in socialist society were not much different from those in the old society, therefore under the dictatorship of the proletariat they can only be restricted to a certain extent. In 1984, the Third Plenary Session of the 12th Central Committee of the Communist Party of China adopted the decision of the Committee on economic system reform, which put forward the conclusion that socialist economy is a planned commodity economy, marking the new development in the CPC’s understanding of socialist economy. The 14th National Congress of the Communist Party of China further proposed the establishment of a socialist market economic system, which is a major breakthrough in the theory of socialist commodity production.