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Salient. An Organ of Student Opinion at Victoria University College, Wellington N.Z. Vol. 21, No. 2. March 27, 1958

Russia's Secret Weapon

Russia's Secret Weapon

Political Economy may be called Russia's Secret Weapon, said Mr Rosenberg, because it is so little known in Western countries. It is either ignored or belittled. Yet the amazing success of the Russian economic system which was recently epitomised by the Sputnik shows that it is in her economic system that Russia's strength lies.

The reason for our ignoring Russian economic theories lay in the fact that to understand Soviet economic theory it was necessary also to revise some basic value-notions which we all hold very dear. For, Mr. Rosenberg claimed, it is impossible to reconcile a number of the concepts of Western democracy with the political set-up which is the necessary outcome of the scientific organisation of economics in the Soviet Union. Mr. Rosenberg compared the unwillingness to understand the thoroughly rational system of economics established in the Soviet Union with the resistance to the Copernican world system which made the sun the centre of the universe and thus also destroyed a number of deeply cherished values. Yet, in order to achieve scientific progress, some values had to be adjusted to the new facts of life.

Continuing to develop the background to his talk Mr. Rosenberg then pointed out that the success of the Russian economic system, based on their economic theory, was of immense importance in the present struggle for the loyalty of the "uncommitted nations." These nations which represented the poorest part of the world needed economic improvement urgently and they represent over 1,000 million people.

Defence expense a boon

Mr. Rosenberg then moved on to the main part of his address which was a review of "Political Economy", the text-book of the Russian Academy of Sciences on Political Economy. The book was divided into two parts—a criticism of the capitalist economic system and an appraisal of the socialist one. The first part, Mr. Rosenberg said was the weakest and contained a great number of distortions, such as a reference to the ruin of the peasantry which sounded somewhat strange in the light of New Zealand farming. However, Mr. Rosenberg claimed that the approach to economics as Political Economy rather than economics pure and simple was much more realistic than was the case with our own economic theory. Economics cannot be divorced from the social and political factors in which economic forces developed, he said. And this was particuIarly true with regard to the under-developed countries. Capitalist economics which tried to describe an economic system which was essentially irrational could not fail but be unsatisfactory. If these were economic laws, economists were largely unable to control them. Thus we were [unclear: ving] at present through a trade cycle in spite of economists' great progress in the analysis of the trade cycle. And when it came to the determination of wages, there just was no satisfactory theory at all, the same applied to the theory of capital.

Present day Western economics was a form of applied logic where conclusions were developed from largely unrealistic assumptions. The striking paradox was that the science of economics was a system of logic hut that it dealt with an economic system which was the height of illogicality. Falling prices in our economy were a disaster—as illustrated by the fall in the price for New Zealand cheest—Mr. Rosenberg claimed. Defence expenditure appeared to be a boon to the economy instead of a burden and while there was widespread hunger throughout the world agricultural production cither "over-produced" or was restricted in the Western world in many instances. Mr. Rosenberg claimed that the rational-political approach to economics which was the main aspect of Soviet economics was for this reason very impressive.

Moving on to the second part of the book—the political economy of socialism—Mr. Rosenberg said that it had a basic assumption that there must be correspondence between the economic and social systems of a society. In order to achieve this correspondence the book maintained that private property in the means of production had to be abolished. For private property made it impossible to co-ordinate the activities of all productive forces in the best interest of society.

The basic laws of the political economy of socialism were two: the fundamental law—" . . . the securing of the maximum satisfaction of the constantly rising material and cultural requirements of the whole of society through the continuous expansion and perfection of socialist production on the basis of the highest techniques;" and the law of Planned Proportional Development, which entailed balancing present resources both material and financial, and balancing the present and the future. The fundamental law meant the continuous improvement of education to instill into the people a higher sense of Jiving and absorb the increasing output of goods; science thus became a most important factor both in production and education, and explained why Russia was ahead of the West in scientific education at the present time. The implementation of the law of Planned Proportional Development involved distribution of wages according to work done and the use of the price mechanism.

The social objectives of the rational planning of production were maximum satisfaction of consumers, both materially and culturally; social and economic equality; and freedom, which for socialism meant man becoming master of his social and economic relations.

In conclusion, Mr. Rosenberg claimed that the book "Political Economy" was an impressive pointer towards solving the problems of over-population and overproduction, the twin problems of the capitalist world. To that extent it is a powerful weapon directing the attention, of the uncommitted world towards Russia.

"'Political Economy'", said Mr. Rosenberg," does not show the way to the good life, but for those who starve or live in the fear of starvation the rich life and the good life may be synonymous, even if these terms are not synonymous for us—surely a minority in our materialistic age."

Mr W. Rosenberg, M.Com., F.R.A. N.Z., Senior Lecturer in Economics, University of Canterbury. Has travelled in the United States, the U.S.S.R. and Europe.