Below is an excerpt from the introduction to third chapter of Preobrazhensky’s New Economics. The “General Remarks” are the first section of the Chapter. Here this section is presented in its whole.
This is an digitized version of an OCR scan of the (1965) Oxford University Press, English translation by Brian Pearce. The original Russian version was published in Moscow in 1926.
My hope is to open a discussion on these writings. Readers are encouraged to comment
III. THE LAW OF VALUE IN SOVIET ECONOMY
WHEN analysing the prerequisites of primitive socialist accumulation we showed that the law of socialist accumulation is not the only fundamental law of Soviet economy. The peculiarity of the commodity-socialist system which exists in our country consists in the fact that within its confines there operate at one and the same time two laws with diametrically opposite tendencies. The second of these two laws is the law of value. While the tendencies of the future of our economy are expressed in the first law, in the second law our past weighs upon us, stubbornly striving to remain in existence and to turn back the wheel of history. In the law of value are concentrated the entire sum of the tendencies of the commodity and commodity-capitalist elements in our economy, and also the entire sum of the influences of the capitalist world market on our economy. We will now examine in more detail how the law of value manifests itself in our economy, what its relative weight is, how the conflict between the two laws proceeds, and what social results are engendered by this conflict which arises from the interaction and obligatory co-existence of the two basic tendencies in the country’s economic organism. In the chapter on the law of socialist accumulation we have already touched on this question in passing. Now we have to analyse methodically and systematically the operation of the law of value in our economy.
This will best be done if, after a few general remarks, we analyse the fundamental categories of political economy and establish what degree of influence they have on our economy. The law of value is the law of spontaneous equilibrium of commodity-capitalist society. In a society without commanding centres of planned regulation, thanks to the operation of this law, direct or indirect, everything is achieved which is needed for the comparatively normal functioning of a whole productive system of the commodity-capitalist type: the distribution of the productive forces-that is, people and means of production–among the different branches of the economy; the distribution of the product of society’s annual production between workers and capitalists; the distribution of surplus value for expanded reproduction between different branches or countries, and its distribution among other exploiting classes technical progress; the victory of advanced economic forms over backward ones and the subordination of the latter to the former.
What we call the categories of political economy are the logically pure, ideal descriptions of the real relations of production, exchange, and distribution which take shape on the basis of commodity and commodity-capitalist production. Under this economic system we have, if the expression may be used, congealed groups of people engaged in the process of production and distribution, as they are formed on the basis of the spontaneous self-regulation of the economy by the law of value; with all the fluidity of their individual composition, these groups are constantly reproduced at each fresh state of capitalist development, forming definite types of relations of production and distribution. The scientific descriptions of these types of relations of people to people (and not of things to things or people to things), on the basis of commodity and commodity-capitalist production, are called by Marx the categories of political economy; these categories adequately describe, therefore, the real relations under capitalism in the sphere of everyday life, but in science these relations are reproduced abstractly, in their pure forms. 
Rent, as a category of capitalist economics, is not the real values which the capitalist tenant pays to the owner of the land, but the distributive relation between tenant and owner which guarantees the regular pumping of part of the surplus value from one to the other. Wages and surplus value are the essence of the relations of production and distribution between workers and capitalist. The category of profit, as another form of surplus value, is a relation of distribution between capitalists, which passes thanks to the mechanism of equalization of the rate of profit and the entire mechanism of capitalist society into a relation of distribution of labour and means of production. In this case it is a production relation of capitalists to capitalists, taken not as consumers (as above), but as organizers of production. The category of price has three aspects: first, as a production-relation which summarizes both the level of productivity of labour within each branch of production and the distribution of labour power among the different branches; secondly, as a relation of distribution, in so far as the price level determines the level of that stream of values which flows from the hands of one group of people into the hands of others; thirdly, as a production-relation once more, in that, through the mechanism of the deviation of prices from values, redistribution of productive forces takes place between the different branches of the economy. Finally, the commodity is the most general category of political economy, characterizing as a whole the type of production-relations between people which is under examination as one of relations between separate independent commodity-producers, connected up into a single economic whole by a system of market relations. The categories can be logically deduced from the law of value.
We make these preliminary remarks for the following reason. Ninety per cent of all the mistakes, misunderstandings and brain-torturings which occur when our young people study Marx result from a naturalistic conception of the law of value. Having grasped in a formal way that the categories signify relations between people, many stubbornly revert to a conception of them as real categories, especially when they explain them not in the words of actual quotations from Marx but in their own words. Behind the stream of things which flow, say, from the exploited workers to the capitalists, from the capitalists to the bankers or the landowners, from one branch of production to another, which are bought and sold on the market and then consumed, and so on, they often fail to see the constancy of the groups of people from whom and to whom this movement goes on, that constancy of the production relations between men under the system of commodity economy which is precisely the subject of political economy. This mental materialization of human relations which are also’ outwardly materialized in real life leads, likewise, to an incorrect conception of many relations in our own economy. Here, too, behind the movement of material values which in natura are the same as under capitalism and which often move along lines which outwardly are the same (‘wages,’ ‘accumulation’, ‘rent’), behind the identity of the relation of people to nature (the same technique, ‘the same’ workers), the changes which have taken place in production-relations are not seen. For this reason it is specially important to approach the analysis we propose with a completely correct conception on the reader’s part about how the categories of capitalist society are to be understood from the Marxist standpoint, so as to maintain this conception when analysing the production-relations in Soviet society. In the course of our analysis the question whether it “is correct to describe our economy, or at any rate the dominant type of relations within it, by the term ‘state capitalism’, will solve itself.
 There is, of course, no need to explain here that the relation between the categories of everyday life and the categories of thought in political economy is to be understood in accordance with the entire general philosophical conception of dialectical materialism.