Bukharin's Lesson in Communism

A review of "The ABC of Communism", by Nikokai Bukharin and Evgenii Preobrazhensky, 1920.

Nikokai Bukharin was one of the 1917 revolutionaries that brought communism to Russia. He was in New York (as was Leon Trotsky) in February 1917, as the news of the budding revolution spread around the world, and joined that revolution in May. He and Trotsky were penning a socialist newspaper at the time, and were particular fans of the New York public library- a great example of a public-private partnership, (not to mention free speech), which houses countless products of private enterprise, in a public facility. Back in Russia, they helped establish the world's first socialist and communist state, destroying the nascent parliamentary system of Karensky, and then the arrayed forces of the old aristocracy in the Russian civil war. They did this by promising something even better than parliamentary democracy- a proletarian state that would forever place workers in power, and end the power of capital and the aristocracy. 

A convenient document of the thinking behind all this is the "The ABC of Communism", by Bukharin and Evgenii Preobrazhensky, put out in 1920 and republished long thereafter to provide a popular argument for communism and the soviet system. It encapsulates the economic and political theories that animated, at least at a conscious level, the new rulers. Bukharin was relatively young, regarded as a leading theoretician, and somewhat on the liberal side, not quite as ruthless as Stalin and Lenin. An autobiography and film about his wife tried to paint a positive image of him and of what things would have been like if Bukharin had managed to not get murdered by Stalin. So this work should present a relatively coherent and attractive case for communism.

Bukharin (center) in happier days, in Soviet leadership.

Well, I have to say that it is not very impressive as either economics or politics. While it provides insight into some capitalist dynamics, it fundamentally fails to understand the most basic drivers of economic systems, and obviously has not engaged with Adam Smith, who had written almost 150 years before. 

On the plus side, there is a lengthy treatment of the economies of scale, which rightly describes the advantages that large industrial enterprises have over smaller ones. The point of this, however, is mostly political, to show why anarchism, which was one of the many revolutionary threads still active at the time, made little sense. The Bolsheviks were besotted by industry and large-scale industrialization, which was at least one area where they put a lot of resources and accomplished a great deal, saving their skins in world war 2, later on.

"Consequently, THE LARGER THE UNDERTAKING, THE MORE PERFECT IS THE TECHNIQUE, THE MORE ECONOMICAL IS THE LABOUR, AND THE LOWER IS THE COST OF PRODUCTION."

Secondly, the author's treatment of cyclical crises in capitalism is not too far off the mark. They pin the problem on over-production, which then leads to workers getting laid off, loss of income and buying power, loss of credit, loss of ancillary business, and the downward spiral of depression. Whether lack of demand or over-supply, imbalances of this kind are indeed central to this kind of crisis. The author's solution? Better organization, in the form of state control over every aspect of the economy. They ceaselessly rail against the waste of capitalism- the competition with similar products, the disorganized manner of production by competing and cut-throat capitalists, the lack of overall harmonious coordination for the public good. But what of Adam Smith? It turns out that the chaos of capitalism has its beauties, and its efficiencies, squeezing every drop out of the environment, and out of workers, in its Darwinian competition.

Thirdly, they make a great deal out of the ambient excesses of capitalism, which were truly horrific, and were clear enough all over the world, leading to the communist's program of world-wide revolution by the working class. The monopolies, the strike-breaking, the child labor, the inhuman conditions, and the vast inequality- these were unquestionable evils, some of which remain endemic to capitalism, others of which have been ameliorated through reform in (relatively) democratic countries. As is typical, criticizing is easy, and there were, and remain, plenty of problems with capitalism and with democracy as well. The question is whether Bukharin plumbs the essential depths of economics sufficiently to come up with a better economic system, or of its associated politics to come up with a better form of the state.

And here the answer has to be, as history demonstrated, no. In their discussion of large scale enterprise, they go through a rather particular example to show the power of scale.

"How great is the advantage of this system was made manifest by some American researches instituted in the year 1898. Here are the results. The manufacture of 10 ploughs. By hand labour: 2 workers, performing 11 distinct operations, worked in all 1,180 hours, and received $54. By machine labour: 52 workers, performing 97 operations (the more numerous the workers, the more varied the operations), worked in all 37 hours and 28 minutes, and received $7.90. (We see that the time was enormously less and that the cost of labour was very much lower.) The manufacture of 100 sets of clock wheels. By hand labour: 14 workers, 453 operations, 341,866 hours, $80.82. By machine labour: 10 workers, 1,088 operations, 8343 hours, $1.80. The manufacture of 500 yards of cloth. Hand labour: 3 workers, 19 operations, 7,534 hours, $135.6. Machine labour: 252 workers, 43 operations, 84 hours, $6.81."

... "All these advantages attaching to large-scale enterprise explain why small scale production must invariably succumb in capitalist society. Large scale capital crushes the small producer, takes away his customers, and ruins him, so that he drops into the ranks of the proletariat or becomes a tramp. In many cases, of course, the small master continues to cling to life. He fights desperately, puts his own hand to the work, forces his workers and his family to labour with all their strength; but in the end he is compelled to give up his place to the great capitalist."

If we read this carefully, and do the math in the case of the ploughs:

$54 / 1180 hours = 4.58 cents per hour in wages

$5.40 per plough in cost

$7.90 / 37.5 hours = 21.1 cents per hour in wages

$0.79 per plough in cost

... we can see that not only is the plough almost ten-fold cheaper (some of which is presumably shared with the buyer in the market), but the workers were paid almost five-fold more per hour. How is this a bad reflection on capitalism? This is by way of telling why small scale production dies in a capitalist system ... it doesn't stand a chance. But the authors fail to mention that, in their own example, some of these gains are apparently shared with workers. So the gains in efficiency are shared quite widely- with customers, with workers, and also with the managers and capitalists, since this new form of work requires much greater contributions of management and capital equipment.

Bukharin and Preobrazhensky are "doctrinaire" communists, blind to a gem hidden in their own data that tells us how and why the capitalist system really works. Why did workers flock to the cities when there were agricultural jobs to be had? It was higher pay. Were the new capitalists holding workers as serfs against their will? Not at all. In the US likewise, whatever the horrors of capitalism, it did not hold a candle to the horrors of slavery.

More broadly, Bukharin and the communists generally had little appreciation for the difficulties and role of management. The surplus labor theory of Marxism leaves no room for management contributions of value to the final product- it is all excess labor stolen from the worker, to be restored in the idealized worker state/paradise. The capitalists are parasites:

"In communist society parasitism will likewise disappear. There will be no place for the parasites who do nothing and who live at others' cost."

Rentiers may be parasites, but managers are not. Theirs is the job to locate the resources, drum up the customers, to build the factories, to negotiate the wages, to run the work and fire the lazy. It is not an enviable or simple position to be in, rather is perhaps the most complex in the capitalist system, or any economic system. (And it is noteworthy that failures of management are endemic in government, of even the most enlightened kind, where crucial parts of this constricting set of incentives are often lacking.) It is the competitive forces pressuring on all sides- from customers, from workers, from government, from the financial markets, etc., that are integrated by the petty bourgeoisie / kulak class into a solvent enterprise, and are the soul of the capitalist system, for which they take a premium of profits off the top.

Bukharin and colleagues never pause to consider why capitalism is so dominant:

"Contemporary capitalism is world capitalism. All the countries are interconnected; they buy one from another. We cannot now find any country which is not under the heel of capitalism; we cannot find any country which produces for itself absolutely everything it needs."

Why is this? There was no shortage of experiments in the 1800's in socialistic styles of life, extending from the Shakers and the Owenites to the Tolstoyans. Few of them even survived very long, and none had a broader impact, let alone rising to the organic level of country-wide economic system. Religious monasteries are probably the only example of successful long-term socialistic organizations, though most are run on more or less totalitarian lines, with a whole separate set of emotional and personal committments. This starkly unsuccessful track record should have been a red flag- forgive the pun!- that while socialist utopianism is very popular, it is not practical.

This cavalier disregard of management and the elementary aspects of human economic demand (aka desire, aka greed) naturally came back to bite the communist Soviets, when, in the absence of a well-thought out way to run things in the wake of winning power on the back of their fantasy of a perfectly (and apparently easily, thanks to a mythical "statistical office") ordered and efficient economic system, they fell to the lowest device in the manager's toolbox- terror.

Bukharin on his way to execution, after having helped Stalin hound Trotsky to death.

Why the loose economics, fantastical pronouncements, and embarassing lack of realism? The reason becomes apparent as you read through "The ABC of Communism", which is that its main purpose is to inspire hate. It is a political tract that, as was current among communists then and since, seeks to frame an enemy, inspire hatred of that enemy, and support for the valiant vanguard that will vanquish that enemy. 

"What civil war can compare in its destructive effects with the brutal disorganization and devastation, with the loss of the accumulated wealth of mankind, that resulted from the imperialist war? MANIFESTLY IT IS ESSENTIAL THAT HUMANITY SHALL MAKE AN END OF CAPITALISM ONCE AND FOR ALL. WITH THIS GOAL IN VIEW, WE CAN ENDURE THE PERIOD OF CIVIL WARS, AND CAN PAVE THE WAY FOR COMMUNISM, WHICH WILL HEAL ALL OUR WOUNDS, AND WILL QUICKLY LEAD TO THE FULL DEVELOPMENT OF THE PRODUCTIVE FORCES OF HUMAN SOCIETY."

... "We are thus confronted by two alternatives, and two only. There must either be complete disintegration, hell broth, further brutalization and disorder, absolute chaos, or else communism."

Millions of people all over the world were thoughtless enough to accept this poisoned chalice, and went down the road of economic brutalization, famine, mass terror, and the gulag. Communism turned out to be a power play, not an economic Oz. It was a bright and shiny political lie. We are in the US becoming familiar with the power of such lies- their use of the basest and most powerful instincts- hate, and hope. Their ability to cut straight through any rational and empathetic analysis, and their ability to make seemingly reasonable people believe the flimsiest absurdities.

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