Economic Laws

the necessary, stable, and recurrent causal relationships and interdependences of economic phenomena in the course of the production, distribution, and exchange of goods and services at various stages of development of human society. Economic laws reflect the most essential and typical features of the operation and development of a given system of production relations. Every economic law expresses the unity of the qualitative as well as quantitative aspects of economic phenomena and processes and serves as an internal measure of these processes.

Economic laws, like natural laws, are objective. Unlike natural laws, however, they operate and manifest themselves only through the concrete labor and productive activity of society’s members. “Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given, and transmitted from the past” (K. Marx, in K. Marx and F. Engels, Soch., 2nd ed., vol. 8, p. 119). People are not free in their choice of productive forces and material living conditions. Preceding generations develop the productive forces in the process of their labor activity and leave them to succeeding generations. This bond in human history ensures the objective nature of economic development, which is ultimately independent of the will and consciousness both of individuals and of society as a whole.

Economic laws are historical in nature. Their content, mode of action, and forms of manifestation depend on the level of development of the productive forces. People enter into historically determined mutual economic relationships, and their activity is found to be subject to various economic laws. History knows five modes of production, based respectively on the primitive communal system, slavery, feudalism, capitalism, and communism (with socialism as its initial phase). Each mode of production has its own inherent system of economic laws.

The nature of economic laws and the manner in which they are manifested are directly dependent on the type of ownership of the means of production, on the level of actual socialization of production, and on the nature of the economic bonds between the parties in production relationships. In all antagonistic socioeconomic formations, economic laws operate spontaneously and are manifested as an external blind force that compels people to act in a given way.

Under capitalism, given the anarchy of social production arising from the contradiction between the social character of production and private capitalist appropriation, the internal laws of social reproduction manifest themselves in the objective form of economic crises of overproduction; these crises periodically shake the economy of bourgeois society, thereby ensuring “a constantly disturbed proportion” in the economy’s development (V. I. Lenin, Poln. sobr. soch., vol. 3, p. 621).

In socialist society, competition is replaced by relations of comradely cooperation and mutual aid. The supremacy of public ownership and the planned organization of the entire national economy make it possible to take into account all aspects of the economic laws and to consciously implement them at all levels of socialist management.

Economic laws differ in content and in effective duration. General economic laws are characteristic of all socioeconomic formations. This category includes the law of the correspondence of production relations to the nature and level of development of productive forces, the law of the increasing productivity of social labor, and the law of economy of time. At each stage of historical development these laws assume different forms and produce different economic effects. Thus, at the time when the mode of production of the primitive communal system shifted to the mode of production based on slavery, the law of the correspondence of production relations to the nature and level of development of productive forces had the effect of eliminating primitive communal ownership and of establishing and consolidating private slaveholders’ ownership of slaves and of the material means of production.

In the transition from capitalism to socialism, the same law operates to eliminate private capitalist ownership of the means of production (and ultimately to eliminate all forms of private ownership of the means of production) and to consolidate public ownership of the means of production in its two forms: (1) public, or state, ownership of the decisive means of production and (2) cooperative ownership of the major portion of the means of agricultural production.

Other types of economic laws are operative only in some, rather than in all, socioeconomic formations—namely, where there is commodity production. This category includes the law of value, the law of money circulation, and the law of supply and demand. The law of value was already functioning at the time when the primitive communal system began to disintegrate—that is, after the first major divisions of labor in society (the separation of cattle raising from farming, and of handicrafts from agriculture). The law of value was limited in its range of operation under the mode of production of the slaveholding system and subsequently under the feudal mode of production; it operated most extensively under the capitalist mode of production, and it is still in effect, expressing a different social content of economic relations in the period of transition from capitalism to socialism and under socialism. The law of value will ultimately die out in the second phase of the communist socioeconomic formation—namely, when full communism has been achieved.

Specific economic laws, which make up a distinct category, operate only under a specific mode of production. They reflect the significant features in the operation and development of historically determined production relations. Specific economic laws are precisely the laws that make principled distinctions between different systems of economic laws. Certain specific economic laws operate only in certain phases or stages of a given mode of production. Thus the system of economic laws of monopoly capitalism has certain new features that distinguish it from the system of economic laws of premonopoly capitalism (for example, the law of monopoly profit under imperialism). The system of economic laws of the socialist phase is gradually transformed into the system of economic laws of full communism, which is communism’s second and highest phase. For example, the law of distribution according to labor will be gradually transformed into the law of distribution according to needs.

The primary objects of study of political economy are the specific economic laws that most fully express the socioeconomic nature and historically determined place of one or another system of production relations. Political economy “must first investigate the special laws of each individual stage in the evolution of production and exchange, and only when it has completed this investigation will it be able to establish the few quite general laws which hold good for production and exchange in general” (F. Engels, in K. Marx and F. Engels, Soch., 2nd ed., vol. 20, p. 151).

The emergence and increasingly greater effect of specific economic laws go hand in hand with the establishment and development of historically determined production relations in unity with productive forces. The system of economic laws of a given mode of production represents the integral system of necessary and substantive internal relationships and dependences of that mode of production that characterizes as fully as possible its essence and direction of development. This system includes the basic economic law of a given mode of production, determining the specific goal of social production and the appropriate means to attain that goal; the economic law of the appropriation of the necessary and surplus product by various classes and social groups; the economic law that reflects the specific distribution of social labor and means of production among various branches of production and types of activity; the economic laws of reproduction, which demonstrate the correlation between production of the means of production and production of consumer goods, or between the first and second subdivisions of social production, as well as within each of these subdivisions; the economic laws that characterize the distribution of consumer goods among direct producers; the economic laws that express the essence of secondary, or transferred, production relations, such as international economic relations; the economic laws of individual spheres of social production; and the general economic laws operating under the conditions of a given mode of production.

The knowledge and utilization of economic laws are two reciprocally determined aspects of society’s mastery of the laws governing the functioning and development of the economic system. People are able to master economic laws—that is, to comprehend them, to use them in a certain way, and to direct the law’s effect toward the satisfaction of their economic interests. The knowledge and utilization of economic laws in an antagonistic society are class-oriented, serving the interests of the classes that own the means of production. The exploitative essence of capitalism and the spontaneous nature of capitalist economic development exclude the possibility of well-planned organized actions on the part of the masses with the aim of deliberate utilization of economic laws. Under socialism, economic laws are comprehended and utilized by the working class in the interests of society, and under advanced socialism, by all the people under the leadership of the working class.

Some elements of objective analysis of the economic laws of capitalism can be found in the works of such classical bourgeois political economists as W. Petty, F. Quesnay, A. Smith, and D. Ricardo.

K. Marx and F. Engels, the founders of the theory of scientific communism, examined the capitalist system of economic laws and revealed the objective inevitability of the downfall of capitalism, showing that the proletariat is destined to dig its grave. V. I. Lenin brought to light the distinctive effects of the economic laws of capitalism under the rule of the monopolies, defining imperialism as the highest and last stage of capitalism. He proved that uneven economic and political development is an unconditional law of capitalism. In the age of imperialism, the victory of the proletarian revolution may initially come in a few countries only, or even in a single country. Socialist revolution expresses the conscious utilization by the masses, under the leadership of the proletariat, of the law of the correspondence of production relations to the nature and level of development of productive forces, thereby ushering in the age of socialism and communism in which the spontaneous action of economic laws is replaced by their purposeful utilization in the interests of society.

Knowledge of economic laws includes discovery of the internal content, general direction, quantitative determinability, and immanent forms of manifestation of each law and consequent discovery of the significance of a given law in the context of economic development; study of the material prerequisites and economic conditions that are the basis of the laws’ operation and interaction in the system of economic laws; identification of the specific forms in which a law manifests itself under specific socioeconomic conditions and depending on the scale of the object under study (a single enterprise, an economic region, branch, or sphere, the national economy as a whole, or the world economy); elucidation of the requirements of a given economic law both in general terms and with respect to specific historical conditions; and finally identification of those objective trends in economic development that lead to the extinction or modification of a given economic law.

It is only under socialism and communism that the use (preceded by knowledge) of economic laws in the interests of society is both possible and necessary, this being the main form of implementation of such laws; it is only under socialism and communism that the direct producers are united by the social nature of production and public ownership of the means of production.

The scientific principles underlying the utilization of economic laws under socialism were set down in the works of K. Marx, F. Engels, and V. I. Lenin; they are elaborated and developed in the documents of the CPSU and other communist and workers’ parties and in the works of Marxist scholars. The utilization of economic laws is effected by means of the economic policies of communist and workers’ parties and socialist states. Economic policies are concretely implemented in the various types of economic and organizational activities of the state. Such activities include the planned management of the socialist economy (economic forecasting, planning, organization, and management, the provision of performance incentives, and accounting and monitoring of production and distribution), as well as the broad dissemination of economic knowledge among all working people and the training of personnel for the national economy.

The effective utilization of economic laws presupposes in-depth and comprehensive analysis of the state of the economy and of the objective trends of its development at a given stage; elaboration of a scientifically valid notion of the desired results of economic development, commensurate to society’s resources and potential as well as to its developing needs; and determination of the specific effect of various social forces and possible ways of combining them toward the attainment of contemplated results in accordance with the requirements of the system of economic laws. All this constitutes the economic strategy of the communist and workers’ parties and socialist states. The elaboration and implementation of economic policies also include such economic tactics as the continuation and concretization of economic strategy. Economic tactics are the actual techniques and means by which economic policies are applied to individual branches of the national economy, to individual economic regions, and to workers’ individual social groups over a relatively short time.

The manner and extent of the economic laws’ utilization serve at the same time to test the truth of the theoretical knowledge that has been obtained on the system of economic laws, and they are a most important condition for thorough knowledge of such laws.