The Law of Planned and Proportional Development of the National Economy

Under the conditions of the public ownership of the means of production, all sectors of the national economy realize the inevitability of planned development in accordance with the inherent proportional relationship.

Any social production, especially socialized mass production, objectively requires the proportional distribution of social labor in order to produce a variety of different products in proportion to meet different needs of society. The higher the degree of socialization of production, the higher the degree of interconnection and interdependence of all sectors of social production, and the stronger the demand for proportional distribution of social labor. Accordingly, Marx said: “The masses of products corresponding to the different needs required different and quantitatively determined masses of the total labor of society. That this necessity of the distribution of social labor in definite proportions cannot possibly be done away with by a particular form of social production but can only change the mode of its appearance, is self-evident. No natural laws can be done away with. What can change in historically different circumstances is only the form in which these laws assert themselves.” Therefore, the proportional development (i.e., balanced development) of social production is a common requirement of all social production, especially socialized mass production. But there are different forms of realization in each different society, which are determined by the dominant form of ownership of the means of production in each society.

Under the capitalist system, the institutional nature of private ownership determines the competition and the anarchy of capitalist production. The proportional relationship between the sectors of the national economy is regulated spontaneously by the law of value, which is generally achieved coercively through periodical economic (financial) crises. The nature of capitalist private ownership is then opposed to the requirements of the planned development of the national economy. In the period of monopoly capitalism, monopoly capital and the financial oligarchy, forced by the sharp contradiction between social production and social needs, try to adopt various forms of “state intervention” in the national economy, but it is impossible to fundamentally change the spontaneity and blindness of the capitalist economy. Marx said: “The essence of bourgeois society consists precisely in this, that a priori there is no conscious social regulation of production.”

The establishment of socialist public ownership of the means of production, on the other hand, fundamentally eliminates the basic contradiction between the socialization of production and the private appropriation of the means of production inherent in capitalism, essentially excludes vicious capitalist competition and the anarchy of production, and overcomes the opposition of fundamental interests between the various sectors, which provides an objective economic basis for the proportional development of the national economy. Engels, speaking of the future socialist and communist society, pointed out: “With the seizing of the means of production by society, production of commodities is done away with, and, simultaneously, the mastery of the product over the producer. Anarchy in social production is replaced by systematic, definite organization. The struggle for individual existence disappears. Then, for the first time, man, in a certain sense, is finally marked off from the rest of the animal kingdom, and emerges from mere animal conditions of existence into really human ones. The whole sphere of the conditions of life which environ man, and which have hitherto ruled man, now comes under the dominion and control of man, who for the first time becomes the real, conscious lord of nature, because he has now become master of his own social organization. The laws of his own social action, hitherto standing face-to-face with man as laws of Nature foreign to, and dominating him, will then be used with full understanding, and so mastered by him. Man’s own social organization, hitherto confronting him as a necessity imposed by Nature and history, now becomes the result of his own free action. The extraneous objective forces that have, hitherto, governed history, pass under the control of man himself. Only from that time will man himself, more and more consciously, make his own history—only from that time will the social causes set in movement by him have, in the main and in a constantly growing measure, the results intended by him. It is the ascent of man from the kingdom of necessity to the kingdom of freedom.” This passage of Engels is a profound statement of the law of planned economic development of the ideal future society.

The proportional relationship of the national economy, includes the proportional relationship between the two major branches of social production, the proportional relationship between accumulation and consumption, the proportional relationship between industry and agriculture, the proportional relationship between the production of material and immaterial means, the proportional relationship between the real and virtual economy, the proportional relationship between population growth and economic development, etc. This requires people to make the right plans to reflect these objective proportional relationships. These plans are subjective, but they are a reflection of objective economic laws. Stalin called this planned development that determined by objective economic relations, as the law of the balanced, proportionate development of the national economy. He said: “The law of balanced development of the national economy arose in opposition to the law of competition and anarchy of production under capitalism. It arose from the socialization of the means of production, after the law of competition and anarchy of production had lost its validity.” He also argued that in the socialist period, the law of planned and proportional development of the national economy is subordinate to the basic economic law of socialism. The basic economic law of socialism determines all the main aspects and all the main processes of socialist production, and “the law of balanced development of the national economy can operate to its full scope only if its operation rests on the basic economic law of socialism.”