Nomenklatura as a class of exploiters

When jokes began to appear that “capitalism is the exploitation of man by man, and socialism is the opposite”, the court Soviet Marxists began to need a justification that would prove why there was no exploitation in the USSR and why the nomenklatura was not a class. Such a justification was invented by them, and it consisted of the following postulates:

1. The ruling class is the owner of production, while property in the USSR is state-owned, that is, nationwide;
2. There are no private owners in the USSR, and therefore no exploiters either.

As confirmation, they also cited a passage from the Communist Manifesto: “The proletariat uses its political supremacy in order to… centralize all instruments of production in the hands of the state, i.e. of the proletariat organized as the ruling class¹”. Today, the old men brought up on the manuals of the court Marxists repeat these very same memorized formulas.

This theory, above all, discredits Marxism itself. Because any thinking person will say – if there is supposedly no exploitation, while the nomenklatura builds palaces for itself, keeps servants, and rides in Chaika limousines, then why do we need such Marxism?

So, what is passed off as Marxist and stubbornly asserted is the claim: since the productive forces in the USSR belong not to private owners but to the state, then there is no exploiting class in Soviet society. But what, in fact, is Marxist about this claim? Absolutely nothing. Did Karl Marx and Friedrich Engels believe that property can be spoken of only when the owner is officially recognized as such in law? No, they believed quite the opposite: property is not a piece of paper with the owner’s name on it, and not a legal concept at all:

In civil law, existing relations of property are expressed as the result of the general will. The very jus utendi et abutendi {— the right of using and abusing, i.e. the right to dispose of a thing at will} already testifies, on the one hand, that private property has become completely independent of the community [Gemeinwesen], and on the other, to the illusion that private property itself is based exclusively on private will, on arbitrary disposal of the thing. In practice, however, the notion of abuti {— to abuse} has very definite economic limits for the private owner, if he does not want his property, and hence his jus abutendi {— right of abuse}, to pass into other hands; for the thing considered only in relation to his will is not a thing at all; it becomes a thing, actual property, only in the process of intercourse and independently of law².

In Marxism, an owner is considered to be one who controls the means of production and benefits from their use. Moreover, such an owner can be collective. Therefore, the fact that property is not formally registered under the nomenklatura means absolutely nothing from a Marxist point of view. Otherwise, a hypothetical Roman Abramovich could simply register his yachts under the state (after making the proper kickback to a friend in the FSB), and for proponents of the thesis we are refuting, he would cease to be an exploiter.

It is correct, Marx writes about the contradiction between the social character of production and the private character of appropriation as the fundamental contradiction of capitalism. But does Marx understand “private” appropriation only as the appropriation of labor products by individual capitalists? If that were the case, then to eliminate the contradiction it would be sufficient to replace dispersed capitalists with their companies – for example, joint-stock companies – and there would be no need to speak of a revolution. No, by capitalist ownership of instruments and means of production and of the labor product, Marx understands the ownership of the “collective capitalist”, that is, of the entire capitalist class as a whole.

From a Marxist point of view, can capitalist property take the form of group ownership? Absolutely. All capitalist companies, conglomerates, syndicates, and trusts embody precisely this form. The essence of the production relation does not change; it is only the form of managing the property of the capitalist class.

From a Marxist perspective, can the form of managing capitalist property not only be collective but become state-owned? Absolutely. In the economies of many capitalist countries, there is a significant state sector, but, according to Marxist evaluation, the presence of such a sector does not change the essence of the property relation in these countries: the fact that the instruments and means of production belong to the capitalist class³.

Property

In Tsarist Russia, there was a state alcohol monopoly⁴. If the Tsarist government had monopolized other markets following the example of the alcohol market, would it have become socialist? No, because the profit would have been appropriated by the Tsarist government (we wrote a separate article explaining that the distinction between the right and left lies not in the economic plane but in the system of values, and this is one of the vivid examples why). In the USSR, factories and plants belonged to the state, and the profit was appropriated by the nomenklatura.

We will proceed from the consideration that the right of ownership is the unlimited right of the owner to dispose of the object of property at his discretion, including transferring it to another owner or destroying it. Could the workers in the USSR manage factories? The Dnieper Hydroelectric Dam – legendary DniproStroy of the 1930s – and many industrial enterprises were blown up during the retreat of Soviet troops in World War II by decision of the nomenklatura⁶, while the workers condemned to unemployment and hunger could not protest. Only the nomenklatura could destroy the means of production; workers were severely punished under the charge of “sabotage”. Could collective farmers, even by unanimous decision, liquidate their kolkhoz, sell or destroy kolkhoz property, means of production, and the products they created? No, they could not, and such initiative would have been punishable. Even during famine, they could not slaughter kolkhoz livestock. All land was given to the kolkhoz by the state for free and indefinite use, but the kolkhoz assembly could not reallocate parts of it for personal plots either. So who could, and who actually owned the property?

It is clear to everyone that kolkhoz property is not ownerless; it belongs to someone. But neither the state nor “public organizations” recognize it as theirs. Who is the owner?

Anyone who has been in a Soviet village will point out the representative of this owner: the district party committee. The committee’s authorized representative in the kolkhoz is the chairman. The “general assembly” of kolkhoz members elects the chairman, but the district committee directs him to the kolkhoz. The kolkhoz chairmen are the nomenklatura of the district party committees.

Indeed, the district committee can dispose of kolkhoz-cooperative property, in contrast to the cooperators themselves. During the war, by decisions of the district committees, kolkhoz livestock was destroyed or driven away, and kolkhoz barns were burned ahead of the advancing Germans. The district committees redrew, enlarged, and subdivided kolkhozes. However, the district committee is not the owner, but merely the authorized representative of the owner of kolkhoz-cooperative property, acting under the control of the regional party committee⁷.

Surplus value

The second point we need to address after the concept of property is the existence of surplus value in the USSR. When Soviet Marxists claimed that under socialism there is no surplus value, they were even contradicting Vladimir Lenin. He recognized that under socialism “the surplus product goes not to the owning class, but to all the working people and only to them⁸”. Surplus value existed under the Soviet mode of production, as it does in any society in which production is managed and labor is divided.

The nomenklatura is very reluctant to discover within itself the category of surplus value, condemned by Marxist doctrine – a synonym for the exploitation of workers.

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Marx’s “necessary labor” was renamed in relation to socialist society as “labor for oneself”, and “surplus labor” (which creates surplus value) was renamed as “labor for society”. But this simple verbal masquerade does not change the essence of the matter. The fact remains: under real socialism, the working people produce surplus value⁹.

We can supplement Mikhail Voslensky and even specify who exactly renamed “surplus value”, when, and under what circumstances. This occurred during a discussion between Joseph Stalin and the authors of the textbook “Political Economy” on February 15, 1952:

Question (A.A. Arakelyan): How should we name the parts of the USSR’s national income that were called “necessary product” and “surplus product”?

Answer: The concept of “necessary and surplus labor”, “necessary and surplus product” is not suitable for our economy. Isn’t that which goes to education or defense also a necessary product? Isn’t the worker interested in this? In a socialist economy, one should rather distinguish roughly as follows: labor for oneself and labor for society. What was previously called necessary labor in relation to the socialist economy corresponds to labor for oneself, and what was previously called surplus labor corresponds to labor for society¹⁰.

This renaming did not occur as a result of scientific research, but as a result of Joseph Stalin’s personal desire, and therefore it cannot be recognized scientifically. If surplus value exists, then where did it go in the USSR? To the workers? No, in the Soviet Union it went to the state budget (that is, it was appropriated, and therefore – exploitation). The state itself was under the control of the nomenklatura, who were the ultimate recipients of the surplus value.

The nomenklaturists cannot hide it: each of them personally receives their share of the appropriated surplus value. Following collective appropriation of surplus value comes its individual appropriation. Otherwise, where does the high salary of a nomenklaturist come from, the money for which his dacha and apartment are built and maintained, with what means are his vouchers to the central sanatorium and official car purchased, from which horn of plenty does his Kremlin ration flow?

Since surplus value first enters the common pot of the nomenklatura state and is then drawn from there, it is impossible to establish which specific workers are exploited by which nomenklaturist. But the impossibility of naming them individually in no way changes the fact that the nomenklaturist exploits them by appropriating the surplus value they produce¹¹.

Appropriation also occurs in the form of increased expenditures from the state budget on the work of party organs and their apparatus, on the huge machinery of state security organs, on the Armed Forces and military industries, on the organs and troops of the Ministry of Internal Affairs, the prosecution, on ideology, and so on.

Increase of surplus value

People who are knowledgeable in Marxist political economy (including Soviet leaders themselves) understand that there are two ways to increase the surplus value obtained in the production process. These are:

1. Extending the absolute working time or increasing the intensity of labor (“absolute surplus value”);
2. Reducing the necessary labor time (“relative surplus value”).

Both methods were employed by the nomenklatura in the USSR following the Stalinist state coup.

The number of working days increased: instead of the five-day workweek (4 working days and 1 day off), a six-day week was introduced, and in 1940 – a seven-day working week with an eight-hour working day, 48 hours per week. The monthly vacations promised after the revolution were reduced to 12 working days. The number of holidays decreased: first, religious holidays were canceled – Easter and Christmas, then revolutionary holidays were removed; the working days became January 22 – the anniversary of “Bloody Sunday” 1905 (later joined by January 21 – the anniversary of Lenin’s death), March 18 – the Day of the Paris Commune; the anniversary of the February Revolution 1917 and International Youth Day were no longer celebrated… The quickly reduced number of non-working days in the USSR was further cut by organizing subbotniks and voskresniks – days of unpaid labor¹².

Under Stalin, even criminal liability was introduced for being late to work and for absenteeism. Labor intensification was achieved through the system of “Scientific Organization of Labor” (NOT), as well as movements of shock workers, Stakhanovites, and Communist labor brigades, which aimed to impose higher labor standards on workers, standards that at the same time appeared as real norms, actually performed and even overfulfilled by leading workers.

Increasing productivity in itself is not necessarily a vice if it receives genuine support in society and the state implements a policy of fair distribution of social wealth. However, in the USSR, there was no fair distribution, as we examined in the article on nomenklatura privileges. As a result, societal support soon faded.

Indirect taxes

Indirect taxes, as is well known, are taxes levied in the form of a surcharge on the price of a product. That is, in addition to the regular taxes we pay to the tax authorities, we also pay extra when purchasing each item. Lenin, who has already been mentioned, viewed such taxes extremely negatively:

The richer a person is, the less indirect tax they pay from their income. Therefore, indirect taxes are the most unjust. Indirect taxes are taxes on the poor¹³.

It was precisely such a tax that the nomenklatura introduced in the USSR under the name “turnover tax”. It was supposedly levied from the socialist economy. The convoluted explanations of Soviet economic science, claiming that the turnover tax is not really a tax at all, since it does not involve a transfer from one form of property to another, carefully avoid the question: who actually pays this tax?

Meanwhile, the answer is obvious. The turnover tax is included in the retail price of goods, and it is this tax that distinguishes it from the production price. Once the product is released to trading organizations, the enterprise transfers the turnover tax from the money received for the product to the state. The rules are strict: the transfer of the tax from the released goods is carried out immediately upon receipt of the account or daily (on the 3rd day after the goods are released). Small enterprises are allowed to transfer the turnover tax once every 10 days (on the 3rd, 13th, and 23rd of each month). Only very small workshops, producing so little that the turnover tax due from them does not exceed 1,000 rubles per month, are allowed to transfer the tax monthly (on the 23rd). In this way, the nomenklatura receives the produced surplus value without delay.

Meanwhile, the retail network passes the turnover tax on to the retail price of the goods. Here, the true payer of this tax finally becomes apparent – the buyer.

And who is the buyer? Since the turnover tax was primarily introduced in the production of consumer goods, the buyer is the Soviet population. It is upon them that the nomenklatura imposes this indirect tax, hypocritically disguised as “state revenue from the socialist economy”.

The turnover tax rates, of course, were kept secret. But some idea of their magnitude can be gleaned from figures that appeared in the Soviet press during the final Khrushchev years, when censorship vigilance slightly relaxed.

The tax, that is, the surcharge, ranged from 50 to 75% of the retail price for the following consumer goods: automobiles, gasoline, kerosene, bicycles (for adults), cameras, typewriters, fountain pens, textiles, matches, threads, and others; from 33 to 66% – for sewing machines, needles, metal dishes, aluminum cutlery, wallpaper, rubber products, light bulbs, electrical wires, writing paper, cement; 50% – for flour, 55% – for sugar, 70% – for vegetable oil, 72% – for leather shoes, up to 77% – for artificial silk¹⁴¹⁵.

Women’s labor

In the main Soviet textbook on political economy, it was written:

The value of labor power is determined by the value of the means of subsistence necessary for the worker and his family. Therefore, when the worker’s wife and children are involved in production, the worker’s wage decreases, and now the entire family receives approximately the same amount that the head of the family previously received alone. This further intensifies the exploitation of the worker, and of the class as a whole¹⁶.

In the Soviet Union, this was precisely what was implemented.

Under the conditions of glasnost in the USSR, people began to speak of the “poverty line”. It is considered to be 75-78 rubles per month per person. The average statistical worker or employee in the USSR, after paying a 13% income tax from his 257-ruble salary and paying a union membership fee, would bring home 220 rubles, i.e., 55 rubles per month for each member of his average family. This is far below the poverty line. Statistically, this confirms that women in the USSR could not avoid working. And they did work¹⁷.

Statistics confirmed Voslensky’s words: in 1987, women constituted 53.1% of the population¹⁸ in the USSR and 51% of the workforce¹⁹. Those who did not work, following the tradition established under Joseph Stalin, included wives of officers, generals, and academicians, as well as an increasingly large number of wives of other nomenklatura officials.

The concept of actual wages

When analyzing exploitation under capitalism, Marx did not encounter the problem of underproduction crises, which were absent in that system. Therefore, he could not identify the additional possibility for exploitation that such crises provide to owners. Economic science and statistics, which developed before the USSR, recognize two categories of wages: nominal and real. The latter depends on the prices of goods and is considered as the size of a “basket” of consumer goods that can be purchased with the remaining salary after deductions. But what if there is a salary, but no goods? Western science does not account for such a case. Meanwhile, it was widespread in the USSR under chronic underproduction and the primacy of heavy industry. Voslensky introduces the concept of “actual wages” to describe this situation:

Actual wages, unlike real wages, represent not the arithmetically calculated, but the quantity of consumer goods and services actually received by the worker for his wage.

Real wages, therefore, are only the ideal case of actual wages, when the entire amount received by the worker can actually be used to purchase the goods and services he needs. Under real socialism, this situation primarily applies to the nomenklatura, who have access to special stores, canteens, and exclusive buffets.

Why is all this being said? Because under real socialism, when real wages are replaced for the worker by actual wages, the level of exploitation noticeably increases. After all, if the monopolist state provides the worker with fewer necessary goods and services than he should receive at the established prices for his wage, it effectively reduces his earnings.

The difference between real and actual wages is an openly declared additional source of surplus value extracted by the nomenklatura.

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The difference between real and actual wages of Soviet workers was clearly reflected in the substantial amount of monetary savings accumulated by the population of the USSR. Soviet propaganda presents this as evidence of the people’s material well-being. But this is incorrect. Under normal conditions of supply of goods and services, 257 rubles per month do not leave any surplus for savings. Workers’ savings were made at the expense of the difference between real and actual wages. It is not prosperity, but the exploitation of Soviet workers that underlies the mass of accumulating money, deposited back into the same state savings banks at very low interest rates (in the West, a savings bank or bank depositor receives a higher interest rate than in the USSR). In the sphere of extracting surplus value, systematic underproduction of consumer goods guaranteed the nomenklatura a profitable gap between actual and real wages²⁰.

Other means of exploitation

The nomenklatura devised other ways to extract additional funds from workers and employees. These included union and Komsomol dues, as well as various cleverly designed taxes such as the tax on childlessness. At different times – first introduced under Stalin – workers were compelled to purchase government bonds annually, often in amounts equivalent to a month’s wages.

Conclusions

Polish social democrats Jacek Kuroń and Karol Modzelewski calculated that in Poland in the early 1960s, an industrial worker spent one-third of his working time producing necessary goods and two-thirds producing surplus goods²¹, and this does not take into account the concept of actual wages. There is little reason to believe that the situation in the Soviet Union was radically different. Considering all the above, the nomenklatura was generally a greater exploiter than entrepreneurship.

1. K. Marx and F. Engels. Works. Second edition. Vol. 4. – 615 pp. – Moscow: State Publishing House of Political Literature, 1955. – p. 446.
2. K. Marx and F. Engels. Works. Second edition. Vol. 3. – 629 pp. – Moscow: State Publishing House of Political Literature, 1955. – p. 64.
3. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — p. 187.
4. Zanozina, E. A. State-Legal Regulation of Alcohol Activity in Russia from the 9th to the 20th centuries (historical-legal aspect). Abstract of dissertation for the degree of Candidate of Legal Sciences, 2008
5. CPSU. 25th Congress. Stenographic report. February 24 – March 5, 1976 [In 3 vols.]. Vol. 2. – 598 pp. – Moscow: Politizdat, 1976. – p. 26.
6. G. A. Kumanov. Stalin’s Commissars Speak. – 632 pp. – Smolensk: Rusich, 2005. – pp. 139–140.
7. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — p. 192.
8. Lenin Collection XI / edited by N.I. Bukharin, V.M. Molotov, M.A. Savelyev. – M.-L., MCMXXIX. – p. 382.
9. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — pp. 202–203.
10. Record of the conversation of I.V. Stalin with the authors of the textbook “Political Economy” // Politburo of the Central Committee of the VKP(b) and the Council of Ministers of the USSR. 1945–1953 / Compilers O.V. Khlevnyuk, Y. Gorlitsky, L.P. Kosheleva, A.I. Minyuk, M.Y. Prozumenshchikov, L.A. Rogovaya, S.V. Somonova – 656 pp. – M.: “Russian Political Encyclopedia” (ROSSPEN), 2002. – pp. 360–361.
11. M. Voslensky, “Nomenklatura: The Ruling Class of the Soviet Union”, M., 1991
12. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — p. 239.
13. V.I. Lenin. Complete Works. Fifth edition. Volume 7 (September 1902 – September 1903). – 622 pp. – Moscow: Publishing House of Political Literature, 1967. – p. 172.
14. See A. Smirnov. Economic Content of the Turnover Tax. Moscow, 1963
15. M. Voslensky: Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — pp. 269-270
16. Political Economy. Textbook. – 638 pp. – Moscow: State Publishing House of Political Literature, 1954. – p. 128.
17. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — pp. 250-251.
18. The National Economy of the USSR in 1987: Statistical Yearbook / USSR State Committee for Statistics. – 736 pp. – Moscow: Finance and Statistics, 1988. – p. 347.
19. Ibid., p. 368.
20. M. Voslensky. Nomenklatura: The Ruling Class of the Soviet Union (Second, revised and expanded edition), 671 pp. — Overseas Publications Interchange Ltd London, 1990. — pp. 260-262.
21. J. Kuron, K. Modzelewski. Op. cit., p. 22.