This anonymously published article from KarlMarx.net offers a concise but thorough view of E.A. Preobrazhensky’s economic ideas as they related to the attempt to build socialism in the Soviet Union. The author does not focus on Preobrazhensky’s political activities or the broader range of his ideas and role as a principal participant in the Russian revolution, and the early construction of the soviet state or his role as a key figure, perhaps second only to Trotsky in the opposition to the rise of Stalin and the bureaucratization of the Soviet state and communist movement, know as Stalinism.
In the 1920s Preobrazhensky’s theory of ‘Primitive Socialist Accumulation’ (PSA) was at the centre of the ‘Soviet industrialization debate’. It proposed that the socialist sector of the economy exploit the private economy to catch-up with advanced capitalism. The theory was subject to ferocious criticism, distortion and misrepresentation, and the debate was eventually resolved by violent means: through the repression of inner-party opposition in 1927, and forced collectivization of the peasantry after 1929. These measures along with universal nationalization and the introduction of the Five Year Plan in 1928, established the ‘classical socialist system’ that Kornai (1992) comprehensively describes. This chapter summarizes Preobrazhensky’s theory of PSA and looks at its relevance during the New Economic Policy (NEP) and at the forces that led to the abandonment of the NEP. The next chapter will apply a derivative of his PSA framework to study contemporary China.
The debates on Marxist theory of development in the USSR of the 1920s were rich and varied. Many theorists, Preobrazhensky included, changed their opinions several times during this period. This ideological fluidity was connected to the imperatives of warfare, economic crises, social policy, political struggle, social and personal pressures, as well as the hopes and dreams of the intellectual protagonists. So, it is not possible to speak of ‘Preobrazhensky view’, instead I focus on his theory and method developed most fully in The New Economics. (Preobrazhensky 1965)
Karl Marx described how early capitalist accumulation accelerated on the basis of forced and unequal exchange with pre-capitalist economic formations, a process Marx called ‘primitive accumulation’. Preobrazhensky’s theory of PSA was a modification of Marx’s analysis of the genesis of capitalism. He drew an analogy in which the accumulation funds for socialism would come from unequal exchange with pre-socialist economic formations. Economic backwardness defined soviet developmental dynamics and produced the contradictory co-existence of capitalist and socialist laws of motion, which were the object of theoretical analysis and the subject of conflicts over practical policy. Contradictions between these economic laws appeared as conflicts between industry and agriculture, and the proletariat and peasantry. These dynamics were manifest through dislocations in economic development and clashes between the interests of social classes. Preobrazhensky supported rapid capital accumulation by state-owned heavy industry, which would come mainly at the expense of the peasantry. He hoped rising peasant incomes; rural investment and material support from successful international revolutions could ameliorate this exploitation. (Filtzer 1979)
In the mid-1920s, as the Soviet economy approached its pre-revolutionary capacity; Preobrazhensky emphasized the need for large-scale capital investment, sacrificing present day consumption for future benefits. (Erlich 1950:66-8) He thought that the gap between world market prices and those of indigenous state industrial prices should be structured to gradually improve the industrial purchasing power of the peasantry and simultaneously maximize the flow of resources towards investment. Once such capital-intensive investment bore fruit the living standards of peasants and workers could consistently improve. (Erlich 1950:74)
For Preobrazhensky a socialist planned economy must limit and control the influence of the law of value. However, he understood that forecasting in a centralized economy created scope for grave errors to radically impact the economy – as compared to capitalism – where private interests adjust markets and counter-balance planning. Therefore economic guidance and forecasting requires a scientific theoretical method to help predict the consequences of planning in advance. (Preobrazhensky 1965:6)
For the complete article follow this link Preobrazhensky’s Theory of Socialist Development
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 Preobrazhensky was expelled from the party, readmitted after capitulating to Stalin, but changed his mind and was expelled again, he was eventually executed in 1937.
 A purely geographical frame is inadequate as it fails to account for Preobrazhensky’s approach to differentiation within the peasantry.
 Preobrazhensky equated state ownership in the USSR with socialist property.
 Preobrazhensky’s concept of exploitation deals with the extraction of surplus product from the peasantry and the private economy by means of unequal exchange, i.e., an exchange of products containing different quantities of labour time.
 Although, Marx correspondence with Vera Zasulich in 1881 supported the idea that ancient communal property forms in Russian agriculture, known as the Mir, might be combined with a revolutionary transformation of society to bypass capitalist industrialization and mechanize on the basis of collectivism. http://www.marxists.org/archive/marx/works/1881/03/zasulich1.htm
 The United Opposition was created in July 1926 by Trotsky, Zinoviev and Kamenev and other well known Bolshevik leaders to change party policy and fight bureaucratism.
 Marx, K. and F. Engels (1989). Collected works Vol. 24 Marx and Engels. Moscow, Progress Publ. [u.a.]. Critique of the Gotha Programme Chapter 1
 See Lenin On Cooperation Jan 4 & 6, 1923 http://www.marxists.org/archive/lenin/works/1923/jan/06.htm
 Preobrazhensky cites private repair shops
 Here Preobrazhensky uses the example of industrial crops, like sugar beet, hemp, oil seeds etc. as well as raw materials from animals.
 In 1927 only 12.6 percent of the labour force were employed by the state. (Preobrazhensky 1980: 229)
 Carr 1969 p.308