The Role of the Law of Value in the Rise and Fall of Socialism in the USSR

The law of value performs its regulatory function in the capitalist system where the private ownership of means of production and commodity production prevail. Under the centrally directed system of socialism, the economic process must be determined by plans and valuations of the central authority to maintain the consistency of the system′s internal co‐ordinating mechanism. In theory, the process of building socialism is a process of the withering away of the operation of the law of value. Recognition of the law of value as a permanent feature of the socialist economic system means conceding either a lack of understanding of the fundamental differences between capitalism and socialism, or the failure of the Marxist‐Leninist dogma. It also acknowledges that the Soviet system of socialism was exposed to increasing contamination by elements incompatible with socialism and was gradually transformed into its opposite – a form of centrally regulated exchange economy where a new ruling class, grown from the Party, was (and temporarily still is) in control of public ownership of means of production, as well as of all markets. The evolution of Soviet socialism from the October Revolution to its disintegration can be characterized by its passage through distinct “official” attitudes towards the role of the law of value. Its denial under the totally centralized economy of War Communism was followed by its temporary reintroduction under the New Economic Policy, then the recognition of its restricted functioning during the transitory phase from socialism to communism, then its recognition as a permanent feature of socialism, and finally its abandonment together with the rest of the Marxist‐Leninist dogma following both the doctrinal and economic crises in the 1990s.