Part 3: The Law of Value, Necessary Evil

Democratic control over production can only function within a centrally planned economy, because, according to Marx’s law of value, it would otherwise be the market and monopolies that determine production—not the workers.
Such economic planning has, however, never proven capable of functioning entirely without involving the law of value in any form of socialism to date.

For example, in the GDR (German Democratic Republic), the law of value was counted among the “basic laws” of the socialist economy:
The publicly owned enterprises (Volkseigene Betriebe), which operated with a certain degree of autonomy, took on the role of individual commodity producers—thus, the division of labor, which Marx described as a necessary condition for commodity production, was still present.
Stalin, Ulbricht, and all other representatives of the Soviet (post-Leninist) system recognized “commodity-money relations” as an “objectively necessary and essential feature of the socialist mode of production.”
Even Lenin’s New Economic Policy (NEP) was nothing other than the inclusion of market mechanisms for the purpose of building up the means of production; thus, we know that nearly all socialist states—from Moscow to Pyongyang—have relied on the law of value and market mechanisms to support their planning efforts.

So what did Marx himself have to say about this?

In his Critique of the Gotha Programme, Marx writes the following about the necessity of a socialist transitional period—the “first phase of communist society”:

“What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society, which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges. (…) The same right is therefore still—in principle—bourgeois right (…) It does not recognize class distinctions, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as natural privileges. (…) But these shortcomings are unavoidable in the first phase of communist society, as it is when it has just emerged from capitalist society after long labor pains. Law can never be higher than the economic structure and the cultural development of society conditioned thereby.”

He goes on to describe the “higher phase of communist society”—that is, communism—“after the all-round development of individuals and the productive forces has grown, and all the springs of cooperative wealth flow more abundantly—only then can the narrow horizon of bourgeois law be fully transcended and society inscribe on its banner: From each according to his ability, to each according to his needs.”

To reach communism—or what Marx often used interchangeably with full socialism—the productive forces, the “springs of cooperative wealth,” must be so developed that they flow abundantly. Production must be advanced enough not to stand in contradiction with socialist relations of production.
Only then, when wealth and production are abundant, can the “narrow horizon of bourgeois law” (that is, the rule of the bourgeoisie) be overcome.

Was this the case in Russia in 1917? In the GDR in 1949? In China in 1949?
We’ll take a closer look at the latter in the next part.