While a retrospective and comprehensive analysis of the harmful effects of revisionism in the field of politics and ideology can be found in the speech “Juche-Oriented Theory on Party Building Is a Guideline to Be Adhered to in the Building of a Working-Class Party” delivered by Kim Jong Il on October 10, 1990, the criticism of its economic consequences is mostly scattered in the leaders’ works along the years. So I made research to find and collect the related passages.
Just after Stalin’s death, the new leadership set higher state purchase prices for agricultural goods to raise the peasants’ enthusiasm for production and to ensure balance between town and countryside; so, as Kim Il Sung mentioned in his report to an enlarged plenary meeting of CC on December 5, 1957, “a great success was also achieved in agriculture, and especially in recent years a rapid upswing has been brought about thanks to the various important measures taken by the Central Committee of the Communist Party of the Soviet Union.” (Works, vol. 11, Foreign Languages Publishing House, Pyongyang 1982, p. 342)
But this positive trend in Soviet agriculture ended when Khrushchev dismantled the state machine tractor stations (MTS) and sold the means of agricultural production to the kolkhozes. That idea had already been proposed in the past by the economists A.V. Sanina and V.G. Venzher and notoriously rejected by Stalin in his “Economic Problems of Socialism in the U.S.S.R.”, on the grounds that it means transferring the machines from a higher to a lower form of socialist ownership and enlarging the scope of commodity circulation. When Khrushchev implemented this idea, during a talk with Kim Il Sung at the end of August 1958, Kim Jong Il “said that at the Soviet congress, held at the end of March that year, a new regulation on the stations which used to manage farm machines and tractors was adopted (…). According to him, this run against Marxism and revolution.
When the great leader asked him why he regarded the above-said regulation as anti-Marxist and counter-revolutionary, he answered that it run against the principles of communist construction and that its adoption amounted to have machinery belonging to the state, namely to the people, handed over to single cooperatives; though, in order to build a communist society, cooperative ownership had to be turned into all-people ownership; Khrushchev was doing exactly the opposite with his policy.” (The adored Kim Jong Il. Official biography of the North Korean leader, Obarrao Publishing House, Milano 2005, pp. 118-119) Sorry but I was unable to find this version of Kim Jong Il’s biography in English and so I translated it from the Italian edition.
History proved that Stalin and Kim Jong Il were right: despite the above said price rise, the expenses to buy, operate and repair farm machines were too heavy for kolkhozes, thus their growth in productivity slowed down and in the following decades many of them went bankrupt, forcing the state to turn them into sovkhozes. The DPRK instead kept and still keeps today the farm machine stations under state ownership to strengthen the leading role of the working class towards the peasants and to provide state support to the countryside.
In the early 1960s, due to the errors of Khrushchev, the USSR got a series of bad harvests and was forced to import grain from the USA, a tendency which was reiterated in the 1970s-80s at an even worse level. As a result: “Now, capitalists are slandering communists as being incapable of farming. They even claim that capitalism is more successful than socialism in developing agriculture. Not only capitalists but also revisionists fail to perceive the advantages of the socialist agricultural system. Revisionists are trying to give up agricultural cooperativization, claiming that individual farming is superior to a socialist cooperative economy.” (Works, vol. 17, Foreign Languages Publishing House, Pyongyang 1984, p. 450)
The latter phenomena was especially apparent in Poland under Gomulka, where collectivization was basically stopped and reverted. In his speech at a plenary meeting of the heads of CC departments on December 23, 1963, Kim Il Sung also made an allusion to the USSR: “In a certain country, stress is being placed on the technical revolution after the completion of socialist cooperativization, while the ideological revolution is neglected. In some other country, the situation is the reverse.
If emphasis is put only on the technical revolution and the ideological revolution is neglected, the peasants will come to loathe working and only seek easy jobs, and they will tend to work only in their own kitchen gardens and to dislike working in common. If things go on like this, it is obvious that farming will not be successful, however good the system and however fine the machines and technology may be.” (Works, vol. 17, cit., p. 453) A few months later he made public his “Theses on the Socialist Rural Question in Our Country” where he proposed to step up the three revolutions in the countryside and this solution enabled DPRK agriculture to thrive for three decades, outperforming both capitalist and other socialist countries.
In the same period the public debate on economic management was in full swing in socialist countries and many were resorting to material incentives to increase economic effectiveness. The DPRK introduced some improvements in enterprise management then and makes use of material incentives too, but in his speech at a consultative meeting of officials in the field on transport delivered on January 22, 1964 Kim Il Sung warned against the abuse of such economic levers: “We should not mislead the workers into thinking that they are working just for money. At present, the revisionists do not conduct communist education among the working people, but spend all their time clamouring only for material incentives. In consequence, the political awareness of the working people is dropping ever lower, and they are more and more influenced by the selfish ideas of placing their personal interests above those of their country and the people. In countries affected by revisionism, swindlers and thieves are on the increase and many people have become rotten and dissolute, and hate working. Should such a phenomenon persist, there would even be a danger of losing the gains that socialism has made, let alone the chance to build a communist society.” (Works, vol. 18, Foreign Languages Publishing House, Pyongyang 1984, pp. 125-126)
A longer argument against this revisionist tendency in economics was made by Kim Jong Il during a talk to officials of the science and education department of CC on June 13, 1967: “The position of giving prominence only to the material incentive for labour can be attributed to the neglect of the communist character of socialist society, and to the main stress put on its transitional character. Those who regard material incentive as most important demand that the system of material incentive be introduced into the whole economic framework. They claim that stimulating the working people materially is the most effective method for encouraging their enthusiasm for increased production and developing the economy rapidly. They argue that even after the establishment of the socialist system the remnants of the old ideology left over from the exploiter society remain to a large degree in the minds of workers. They even maintain that in socialist society, too, such economic levers as profit, bonus and price should be used as the basic means of economic management in order to increase returns. Along with this is the notion that enterprises should be allowed to set prices as they please and produce those goods which bring a great amount of profit. This is an anti-socialist and revisionist theory which aims at reverting the socialist economy into a capitalist economy. If a socialist economy is managed in accordance with such revisionist theory, the difference between a socialist economy and a capitalist economy will gradually disappear and socialist economies will degenerate into capitalist ones. In the final analysis, mercenary egoism will gain ground among people and in the end it will reach the level where it erodes and undermines the whole socialist society.” (Selected Works, vol. 1, Foreign Languages Publishing House, Pyongyang 1992, p. 211)
This was the case especially in Czechoslovakia under Dubchek where the autonomy of enterprises definitely went too far, as mentioned by Kim Il Sung at a consultative meeting of financial workers on October 31, 1968: “Recently, I learned that certain people were going to raise the prices of goods. I cannot understand why. A steady price reduction in a socialist society for the systematic promotion of the material and cultural welfare of the people is a phenomenon governed by law. So we cannot say that it is normal to raise the prices of goods. A certain country is introducing free enterprise and the decentralization of economic management by which local authorities and enterprises draw up plans and dispose of profits as they please. This is, in the long run, equivalent to the capitalist method of economic management.” (Works, vol 23, Foreign Languages Publishing House, Pyongyang 1985, p. 110)
On March 3, 1969, in his speech before the heads of departments of CC and chief secretaries of provincial party committees, Kim Il Sung further denounced the negative after effects of the emphasis on profitability: “At present, the economies of certain countries are not developing rapidly. This is mainly due to the fact that they are not introducing detailed planning properly. A certain country was so engrossed in gearing production to profit-making, calculating only profitability, that it even neglected the construction of the factories which are necessary for extended reproduction. It tries to build only those factories which can yield economic results quickly and recover the invested money quickly and increase profits. If this is to be removed from economic construction, it is necessary to introduce detailed planning.” (Works, vol. 23, cit., pp. 414-415)
While making use of cost-accounting system to rationalize enterprise management, the DPRK always implemented detailed planning and avoided similar after effects by specifying the type and amount of items to produce in plans, as suggested by the great leader in his concluding speech at the enlarged meeting of the party CC on February 1, 1973: “At present the fulfilment of enterprises’ production plans is assessed mainly on the money index, and so their officials are not very concerned about producing the amount of goods stipulated in the plans. It would be better to assess the fulfilment of production plans by the items produced rather than by the money index.” (Works, vol. 28, Foreign Languages Publishing House, Pyongyang 1986, pp. 110-111)
The attempted counter-revolution in Czechoslovakia was mentioned again a few weeks later in the speech to a consultative meeting of the Three-revolution teams in the agricultural sector on February 21, 1973: “It is impossible to reform the ideological consciousness of the people on communist lines only by developing technology and raising their standard of material life. It is true that their ideological consciousness is affected by their material living conditions. Marxism regards it as a universal truth that people’s ideological consciousness changes with the change in the material conditions of society. But people’s ideological consciousness does not change on communist lines of its own accord simply because their material standard improves. As you all know, in a certain country some people plotted a counter-revolution in order to revive capitalism, although the people’s standard of living is very high. In another country, there are still people who forge bank notes, although many decades have passed since the socialist revolution was carried out in that country. These show that people’s ideological consciousness does not reform itself automatically in step with changes in the material conditions of society. Therefore, if we are to build a communist society, we must fight to capture both the material fortress and the ideological fortress. In other words, in order to build a communist society, we must develop the nation’s productive forces and raise the material and cultural standards of the people by building the economy well on the one hand, and, on the other, root out the remnants of the outdated ideas from the minds of the working people and equip them with communist ideology by pressing ahead with the ideological revolution.” (Works, vol. 28, cit., pp. 161-162)
The reference to forgery of currency which existed in the USSR already in the early 1960s, together with the preceding one to swindle and theft of state property, prove that Kim Il Sung was aware of the “shadow economy” in the USSR which was ignored by most economists and analysts back then. As Nina Andreyeva later said in her lecture at Kim Il Sung University on October 6, 1992: “The ‘black’ economy which produces the elements of private enterprises is developing. The unlawful accumulation of capital by the new ‘Soviet’ bourgeoisie began to appear. The new bourgeoisie who are getting richer gradually destroyed everything around them. The ‘black’ economic entrepreneurs and the bribed bureaucrats of the Party and government organs are conspiring with each other… Under this condition, moral incentives to labor disappeared among the working people while a negative attitude towards every state property appeared. The violation of labor discipline and the practices of squandering the people’s property are increasing.” (The Cause of Socialism is Invincible, Foreign Languages Publishing House, Pyongyang 1992, p. 5)
Along with the neglecting of ideological education, the rise of corruption and black economy was due to deficit induced by the imbalance between the people’s purchasing power and a slowed down production, since “at the time of Khrushchev and Brezhnev the main index of the economic effectiveness of production was the gaining of the profit in monetary expression. They started to achieve this through the method of artificially raising prices, that is they effected a reduction in the amount of goods produced, while increasing prices, that is to say, an utterly unreasonable method which allows the reduction of the amount of the produced goods while increasing the prices. Short-sighted pursuit of the profits and other private interests for the enterprise led to the retard of the rate of the development of the national economy, decrease of the effectiveness of invest and gradual lowering of the value of the rouble. Planned reduction of the prices was suspended and the increase of the prices of consumer goods started and cheap goods disappeared.” (Ibid, p. 4)
For this very reason, Kim Il Sung always warned against focusing too much on profit, for example at a consultative meeting of senior officials in the administrative and economic sectors on January 5, 1979: “Some people are now trying to manage and run enterprises simply by chasing profits, but socialism cannot be built in this way. Managing and operating enterprises simply to make profits is not the socialist way of enterprise management.
In economic management, too, we must adhere strictly to the working-class principle, rejecting revisionism categorically. If we manage enterprises efficiently by implementing the Taean work system thoroughly and enforcing the cost-accounting system properly, we shall be able to draw on the advantages of the socialist system and build socialism and communism successfully.” (Works, vol. 34, Foreign Languages Publishing House, Pyongyang 1988, p. 22)
Even years later, when the self-balancing system was enforced in integrated enterprises, the great leader recalled the negative experience of Soviet reforms while stressing a proper application of Taean work system at a meeting of the Political Bureau on November 19, 1985: “In a certain socialist country they have weakened the role of Party committees on the pretext of increasing the authority of factory managers. In consequence, no one can control managers who embezzle public money and idle away their time, making their factories lawless. We must on no account allow managers to boss the show.” (Works, vol. 39, Foreign Languages Publishing House, Pyongyang 1995, p. 211) And also: “Our officials must solve the problem of inspiring the workers with high productive enthusiasm in our own way to suit our situation, not by paying them more money as in other countries.” (Works, vol. 39, cit., pp. 216-217)
Entering the Gorbachev era, open restoration of capitalism and legalization of private ownership over the means of production began, and Kim Il Sung denounced that in his speech at a consultative meeting of senior officials in charge of the chemical industry on March 20, 1987: “Recently some of the socialist countries are swinging to the right or to the left in the revolution and construction, without having any definite lines or policies. They fail to adhere to the revolutionary principles of Marxism-Leninism and take to revisionism and reformism, because of temporary difficulties in the course of building socialism. With regard to some socialist countries which are following the road to revisionism and reformism, a number of countries are now saying that the introduction of the system of private ownership means taking the road to capitalism and that mercenary socialism is not socialism.” (Works, vol. 40, Foreign Languages Publishing House, Pyongyang 1995, pp. 265-266)
Finally, in a talk with economists on April 4, 1990 the great leader made the following remarks about the ill-fated perestroika process: “Recently some countries have been introducing capitalist methods in enterprise management; this will result in the introduction of a market economy. A market economy and a planned economy, the capitalist method of economic management and the socialist method of economic management, cannot coexist. If the capitalist enterprise management method is introduced in state enterprises based on all-people ownership, the enterprises that become prosperous through competition in the market will grow more prosperous and those that do not will go bankrupt. Therefore the method does not accord with the intrinsic nature of the socialist planned economy.
Even though they are said to be introducing the capitalist enterprise management method, factories and enterprises must obtain fuel and raw and other materials needed for production on their own, which is difficult for a large factory. Perhaps a small local-industry factory that does not use much raw and other materials can manage the factory by capitalist methods, but it is difficult for large factories and enterprises that consume iron ore, coal and heavy oil in large amounts.
Several socialist countries are introducing a market economy; this will bring about the ruin of socialist construction. We must on no account introduce a market economy.” (Works, vol. 42, Foreign Languages Publishing House, Pyongyang 1997, p. 244)
These predictions were fully confirmed by what happened after the state orders for industries were decreased by 50% in 1988 and Soviet enterprises had to sell half of their production through the market mechanism: the major enterprises took advantage of their monopoly power to raise the prices without actually improving their work, and factory managers filled the workers’ pockets with that bumper profit in order to gain popularity, but on the shelves there was nothing to buy; the subsequent wave of inflation made criminal businesses thrive and paralysed national economy within 3-4 years, disrupting ties between factories and the energy supply network, as well as between Soviet republics themselves, and the fall of the USSR eventually came.
Summing up what emerges from the documents, we can say that the WPK was a stern critic of revisionist economic policies in the USSR and Eastern Europe, especially the expansion of money-commodity relations, the emphasis on enterprise profit and excessive reliance on material incentives, and also denounced the growth of shadow economy and corruption related to the neglecting of ideological education, but at the same time it never shared the Chinese and Albanian theory that capitalism had already been fully restored in the USSR in the mid-1960s, with the Kosygin reform, and that it even reached the stage of “social-imperialism”.
The WPK’s stand is closer to the views of Molotov and others who criticized the expansion of money-commodity relations as a step back in socialist construction and the phenomena of bureaucracy and embezzlement which creates “embryos” of capitalism and wealth unbalance, but bureaucratic privileges, illegal practices and capitalist methods in enterprise management alone are not enough to automatically change production relations and the class character of the state; only under Gorbachev and Yeltsin private ownership of the means of production was legally restored, free market prices unemployment reappeared, social welfare system was destroyed and so on.
As Kim Jong Il said to the senior officials of party CC on December 27, 1990: “In several countries, with the rise of modern revisionism, more capitalist elements have been introduced in the method of guidance and management of socialist society; in particular, with the full-scale application of capitalist methods by the advocates of modern social democracy, a grave situation has been created in which society is returning to capitalism.” (Selected Works, vol. 10, Foreign Languages Publishing House, Pyongyang 1999, p. 444)
The counter-revolution in the USSR passed through two qualitative changes with Khrushchev, who marked the seizure of power by revisionist, and Gorbachev, who launched a full-scale restoration of capitalism; between them a period of quantitative accumulation took place when the growth of corrupt elements among the interstices opened by Khrushchev gradually undermined the foundations of socialism and provided a wider social basis for right-wing opportunists to eventually restore capitalism.
As Kim Il Sung told to a Cuban woman lawyer on June 3, 1994: “The Soviet Union with a history of over 70 years of revolution came to ruin, for its leaders had pursued a policy of revisionism and separated themselves from the masses, committing themselves to subjectivism and bureaucratism. It started its journey towards destruction from the period of Khrushchev’s rule, who had given up proletarian dictatorship.” (Works, vol. 44, Foreign Languages Publishing House, Pyongyang 1999, pp. 392-393)
Ten years later a similar explanation was elaborated by Thomas Kenny Roger Keeran in the book Socialism Betrayed, but this is another story.
From Milan Centre for the Study of the Juche Idea and KFA Italy Piedmont Region