Primitive Socialist Accumulation

The theory

In The New Economics (1926) Preobrazhensky read the transitional economy as a conflict of two laws. One was the law of value governing the private sector; the other was the law of primitive socialist accumulation, which the state sector had to assert in order to expand itself. The two could not coexist, and his conclusion was that the pace of industrialization depended on the extent to which the state sector transferred resources out of the private one.

The instrument of transfer was price policy rather than seizure. The state would manage the gap between the selling prices of industrial goods and the procurement prices of agricultural ones, the scissors, absorbing surplus through unequal exchange. The name rested on an analogy: what Marx had described as the primitive accumulation of capital would be performed by a socialist state on behalf of its own sector.

The dispute

Bukharin answered that this amounted to exploitation of the peasantry. If the state absorbed surplus through unequal exchange, the peasant would reduce sales to the market and retreat into subsistence, and industry would lose both the market it sold to and the grain it bought. He argued instead for balanced growth with the worker-peasant alliance as the prior condition.

The argument was the economic expression of the inner-party division of the later 1920s. Preobrazhensky's formulation became the economic platform of the Left Opposition and Bukharin's reply the ground of the Right.

Difference from Stalin's course

What Stalin carried out after 1929 was not the path the theory envisaged. Preobrazhensky had proposed transfer through prices with market relations intact; the method actually adopted subordinated the production units themselves to the state through collectivization and secured grain directly through compulsory deliveries. The scale of transfer exceeded what the theory assumed, and its social cost was of another order.

Preobrazhensky himself was removed repeatedly for his Left Opposition activity and was executed in 1937. His problem was taken up again in later debates on industrialization in underdeveloped countries, and is often compared with the mid-twentieth-century development economics that treated agricultural surplus transfer and intersectoral terms of trade.