The Congress Documents note the followings on this subject:
Through their wholesale retail sales and trade establishments (retail shops), they keep a check on the demands of society and to a significant degree produce proportionally to the demand. Instead of producing tons of a certain product, pushing it to the market, and searching for buyers, they are now offering hundreds of variations of their products to the masses through huge advertisement campaigns and produce the ones that are most preferred according to the parameters of demand and sell them to buyers through their retail stores."
In continuation, however, they still maintain a certain margin of precaution: "From this situation it shouldn't be concluded that the production anarchy has entirely disappeared." (p. 23) So, this means that the anarchy of production is in the secondary plan; planned production is primary. The primary side of the matter is proportional production; however anarchy of production too still exists.
Laying out the issue in this way also implies that the economic crisis of over-production in capitalist mode of production is ignored. When there is overall excess of production, we cannot talk of planned production. The reason that they come up with as to the proportional production: Retail stores that are controlled by producers. This is exhibiting a kindergarten level of understanding in terms of capitalist production, circulation and exchange processes; the roles of productive capital, commodity capital, and finance capital; the differentiating of surplus-value at its earliest stages into interest, rent, and profit; and that these three different groups of capital belong to different capital groups; in terms of comprehending these simplest and earliest processes of Marxist political economy.
As if the retail stores are a new phenomenon in the history of capitalism.
This society, as was proved by the founders of Marxism, is a system "that functions with anarchy within anarchy" and is "a war of everyone against everyone." Even though monopoly capitalism has employed many tools in order to prevent the anarchy in production, so far the fact of the anarchy of production has not changed.
These tools were also employed in Engels' time, Lenin's time, and an increasingly more so today. However, so far the system has not been able to do away with the economic crises of over-production.
"While uniting production, the cartels and trusts at the same time, and in a way that was obvious to all, aggravated the anarchy of production." (ABC) (Lenin, Selected Works, Vol. 11, p. 483) [https://www.marxists.org/archive/lenin/works/1908/apr/03.htm]
Taking it from the very beginning; Capital, while producing, does not take the deep rift formed between production and the market into account; while producing, it does not pay any attention to the masses' necessities, met only by their limited purchase power; nor does it take into account the markets that are getting too tight for the growing production capabilities. The main requirement of the "general law" of capital production is to produce until the very end of the limits determined by the forces of production is reached.
This means that the capital, especially through the credit economy, will try to expand itself without stop, drawing a motion that resembles a spiral, ever pushing the limits of its borders. That is true even if this development carries within itself elements of the system's downfall.
In other words, with that perfect formulation by Marx: "Over-production arises precisely from the fact that the mass of the people can never consume more than the average quantity of necessities that their consumption, therefore does not grow correspondingly with the productivity of labour." (Theories of Surplus Value, Book II, p. 451)
It is inevitable under capitalism that there is a constant gap between the limited consumption and the unlimited production. Because capital ignores the market’s actual conditions and the miserable living conditions of the masses who are stuck within the mandatory necessities of sustenance; its main pursuit is the maximum profit; anything other than accumulation and the goal of increasing the ever expanding re-production scales fails to capture its attention.
It is not for nothing that Marx, in his analyses in Capital, keeps on underlying the gap between the limited scale of consumption and the production that ceaselessly tries to overcome the limited barrier of consumption.
The MKP ignores the following conclusions by Marx: "Since the aim of capital is not to minister to certain wants, but to produce profits, and since it accomplishes this purpose by methods which adapt the mass of production to the scale of production, not vice versa, conflict must continually ensue between the limited conditions of consumption on a capitalist basis and a production which forever tends to exceed its immanent barriers." (Capital, Volume Three, p.227) [https://www.marxists.org/archive/marx/works/1894-c3/ch15.htm]
In other words, the Congress Documents of the MKP is in complete opposition to Marx's conclusions described in his monumental work. The Congress Documents keep on talking about capital accumulation and the dimension this accumulation has reached. It is well known that, according to Marxism or Marx, capital consists of commodities and "and therefore the overproduction of capital implies an overproduction of commodities." [Capital, Volume III, Chapter 15, Paragraph 44]
And this means the anarchy of production.
In such a case can we talk of planned production?
More importantly: "Over-production is specifically conditioned by the general law of the production of capital: to produce to the limit set by the productive forces, that is to say, to exploit the maximum amount of labour with the given amount of capital, without any consideration for the actual limits of the market or the needs backed by the ability to pay; and this is carried out through continuous expansion of reproduction and accumulation, and therefore constant reconversion of revenue into capital, while on the other hand, the mass of the producers remain tied to the average level of needs, and must remain tied to it according to the nature of capitalist production." (Marx, Theories of Surplus-Value, Book II, p. 512) [https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch17.htm]
This means that the Congress ignores the general law of the Marxist political economy on the production of capital. Over-production and the lack of planning, haphazardness, and anarchy caused by it are inherent to this system and hence to the capital. The great development of productive forces, which is proportional to the progress of society, continuously expands the production, commodity supply disproportionally exceeds the commodity demand, markets get overloaded with products, and eventually over-production becomes an obstacle before the capital's production, circulation, and exchange processes, and subsequently the laws of production and circulation are all turned upside down.
Obviously, what causes the over-production is the contradiction between the expansion of unlimited production brought about by the unbridled development of productive forces and the limited consumption of real producers who are caught up within the limits of the necessary means of subsistence. This is not the kind of production, as described in the Congress Documents, that takes place "within the framework of demand" or through "the control of the demands of society" and is "proportional to the demand." What provides the foundation for the over-production is the incredible growth of the production capacity of capitalism through the tremendous increase of the productivity of labour that coincides with the progress of the society, on the one hand, and the limited purchase power of millions of labourers whose quality of life is kept to a minimum level by the capital, on the other hand.
This situation excludes the demand-proportional production from the outset.
Moreover, due to the nature of the functioning of the capitalist production process; the fact that the direct production conditions are not identical to the conditions of the realization of this production or the fact that the conditions of production of surplus-value are not identical to the conditions under which it is realized makes a "demand proportional" production impossible.
Perspectives such as the demand proportional production that are presented by the Congress Documents, in other words putting such an approach to the centre of matter, cannot be linked to Marxism and to the analyses of Marx in Capital; they could only be linked to the theses of Hilferding.
It may be asked: Didn't the existence of monopolies provide, to a certain degree, basis for the organized and planned production? Of course it did. But this is not a new phenomenon nor has it been at a scale that made the demand proportional production the primary type of production, as claimed by the Congress Documents.
In the first volume of Capital, under Chapter 25, titled General Law of Capitalist Accumulation, where Marx examines the consolidation and centralization of capital, there is a material extremely valuable in explaining the current monopolization.
Marx explains the relationship between centralization and monopolization as follows:
"In any given branch of industry centralisation would reach its extreme limit if all the individual capitals invested in it were fused into a single capital. In a given society the limit would be reached only when the entire social capital was united in the hands of either a single capitalist or a single capitalist company." (K. Marx, Capital, Volume 1, chapter 25, p. 644) [https://www.marxists.org/archive/marx/works/1867-c1/ch25.htm]
In the fourth German edition of this observation by Marx, Engels adds the following note: "The latest English and American ‘trusts’ are already striving to attain this goal by attempting to unite at least all the large-scale concerns in one branch of industry into one great joint-stock company with a practical monopoly."
Indeed, in the third volume of Capital, Marx, where he examines the price increases and the relationship between the fixed constant-capital and the circulating constant-capital, gives the following example in order to explain the factors that lead to cartelization in the context of raw material: "During the period in which raw materials become dear, industrial capitalists join hands and form associations to regulate production. They did so after the rise of cotton prices in 1848 in Manchester, for example, and similarly in the case of flax production in Ireland." (Marx, Capital, Volume III, Chapter 6, p. 109) [https://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-3rd.pdf]
So, in the later years of Marx's and especially Engels's period, there was monopolization through mergers of capitals in a single branch of an industry. They were only the early attempts and it was not a common practice. This development, however, was already analyzed far-sightedly by the founders of Marxism. Engels, in his work Socialism: Utopian and Scientific, notes the following brilliant observation on trusts:
"The producers on a large scale in a particular branch of an industry in a particular country unite in a ‘Trust’, a union for the purpose of regulating production. They determine the total amount to be produced, parcel it out among themselves and thus enforce the selling price fixed beforehand. But trusts of this kind, as soon as business becomes bad, are generally liable to break up, and on this very account compel a yet greater concentration of association. The whole of a particular industry is turned into one gigantic joint-stock company; internal competition gives place to the internal monopoly of this one company. This has happened in 1890 with the English alkali production, which is now, after the fusion of 48 large works, in the hands of one company, conducted upon a single plan, and with a capital of 6,000,000 pounds." (Engels, Socialism: Utopian and Scientific Socialism, Marx, Engels, Selected Works-3, p. 172) [https://www.marxists.org/archive/marx/works/download/Engels_Socialism_Utopian_and_Scientific.pdf]
Thus, the centralization of capital reaches its summit through cartels and trusts and they, by undertaking the regulation of the production in a given industry's particular branch, control the entire social production.
In another of his footnotes in the Capital, Volume III, Engels explains that a certain regulation is brought to the production "by the trusts of manufacturers of whole spheres of production which regulate production, and thus prices and profits" and yet this regulation still contains within itself elements of irregularities; and this is very important for the present period. A similar note is shared by Marx in Capital. "[A]s soon as the immediate impulse is over and the general principle of competition to 'buy in the cheapest market' (instead of stimulating production in the countries of origin, as the associations attempt to do, without regard to the immediate price at which these may happen at that time to be able to supply their product) – as soon as the principle of competition again reigns supreme, the regulation of the supply is left once again to 'prices'." (Marx, Capital, Volume III, Chapter 6, p. 109) [https://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-3rd.pdf]
We know that during Marx's period, cartels were not as widespread and predominant as they have become in the imperialism state of capitalism. After all, the concentration of capital would inevitably lead to monopoly: cartels, trusts and trade alliances. We know from Engels's research that even by those years, international cartels were being established in the British and German iron industries.
Although on one hand through cartelization, centralization reaches its summit, organizes the production, and to a certain degree regulates the production anarchy, on the other hand, this order without much delay again stands before the capital as the "order of disorderliness." As put by Engels, the functioning of trusts that are established by the capitalists in order to regulate the production among themselves is particular to normal times. This fraternal sharing, this "international" brotherhood of the capitalist form, transforms to the opposite, to the hostile brotherhood:
"It goes without saying that these experiments are practicable only so long as the economic climate is relative favourable. The first storm must upset them and prove that, although production assuredly needs regulation, it is certainly not the capitalist class which is fitted for that task. Meanwhile, the trusts have no other mission but to see to it that the little fish are swallowed by the big fish still more rapidly than before." (Footnote Engels, Marx, Capital, Volume III, Chapter 6, p.110) [https://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-3rd.pdf]
Today, monopoly, with a huge weight, has become the "deepest economic foundation of imperialism." (Lenin, Selected Works, Volume IV, p. 101)
The phenomenon of mergers bringing a certain level of order to the production and yet maintaining internal conflicts due to competition, which was acutely observed by Marx and Engels at its earliest stages, has today been over and over confirmed; and especially during this period of general depression it has been ascertained.
It is a fact that today giant monopolies are able to control raw material resources on their original locations and thus supervise the production, sales conditions, production amount, term periods, price, profit, and so on.
In Lenin's words: "Forms of cartels: a) Cartels fixing sales conditions (terms, time limits, payment, etc....) b) Cartels fixing the sales areas c) Cartels fixing output quotas d) Cartels fixing prices e) Cartels fixing distribution of profit" (Selected Works, Volume 5, p.29) [https://www.marxists.org/archive/lenin/works/1916/ni-alpha/princise.htm]
Whatever form that monopolies assume today, whatever the level of centralization is, and no matter how developed is the form of production regulation they come up with, production plan cannot go on without crises and within the struggles of monopolies against struggles, imperialism against imperialism, finance capital against finance capital. Thus monopolies cannot avoid being the womb of disorder within order.
It is a fact that in the imperialism phase of capitalism, certain forms of organization do emerge within the anarchy of production of monopoly capitalism and subsequently a certain degree of competition is removed. However, at the same time, anarchy blows out at another front, which is very characteristic of such mode of production.
While merging the production, trusts also increase the anarchy of production and the pressure of capital, which leads to more intense contradictions and antagonisms within capitalism.
At this point a parenthesis should be opened: The likes of Rudolf Hilferding, who wrote Finance Capital (a book that is important and valuable and yet contains certain mistakes), did not neglect to come up with a fatuous theory such as "organized capitalism" from a certain level of regulation that monopolies give to the economy. As we know, the "organized capitalism" thesis negates the theory of the collapse of capitalism. According to this thesis, in the phase of developing capitalism, in its imperialist stage, the order that the monopolies bring to the production also prevents capitalism's collapse by eliminating the conflicts and antagonisms in the economic arena.
In particular at the stage of imperialism, capitalism's law of uneven and erratic development deepens the anarchy and competition. Today's development confirms this fact. On the one hand, monopolies carry the socialization of production to the peak by advancing the development, while on the other hand they accelerate the decay within the system; the organized production that is brought about by finance capital through monopolies also reproduces disorder in every stage of development and expansion. Lenin's words remain as the accurate assessment of the matter: "Independently of the development of unities of capitalists, independently of monopoly capitalism's efforts to eliminate the free competition in each country... monopoly... in its integrity amplifies and intensifies the chaotic character of capitalist production."
Although every effort of monopolies to bring an order to the organization of production gives a certain orderliness to the anarchy in the social production, through its development, the monopoly capitalism not only brings the conflicts and contradictions, disorder and chaos in world economy, but also intensifies them. The certain order that is brought to the production in the period of dominance of monopolies has neither been capable of eliminating the lack of planning and anarchy in economic process nor has it been able to take the competition out of this process.
Let us continue with an extremely important analysis by Marx.
A relative over-production is an essential condition for the expanding reproduction. In the second volume of Capital, at the section where he re-examines the elimination of the capitalist mode of re-production, Marx writes the following: "The quantity of raw materials, semi-finished products, and auxiliary materials required for the annual production of the articles of consumption — provided other things remain equal — does not decrease in consequence. Hence the aggregate production of means of production would have to increase in the one case and decrease in the other. This can be remedied only by a continuous relative overproduction. There must be on the one hand a certain quantity of fixed capital produced in excess of that which is directly required; on the other hand, and particularly, there must be a supply of raw materials, etc., in excess of the direct annual requirements (this applies especially to means of subsistence). This sort of over-production is tantamount to control by society over the material means of its own reproduction. But within capitalist society it is an element of anarchy." (Marx, Capital, Volume 2, Chapter 20, p. 496) [http://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-II.pdf]
Wholesale purchase, on the one hand, and, in the same manner selling as much as possible, on the other hand, enter the exchange process independently. In this way, commodity is exchanged with money and vice versa. The constant renewal of this process composes one of the essential factors of circulation. The balance between purchases and sales exists only abstractly. Due to the unique character of production, this balance can only be random. And this random factor, within the production that is based on capital that functions in anarchy, always carries within itself the probabilities of interruption, pause, volatility, and crisis as potential.
A production that is immune to crisis, free from difficulties, and is based on a smooth and flat rate is irrational and absurd in practice. In a society where the production is based on lack of planning and where everyone produces for himself, in other words, in a society where the productive forces of the society and the means of production are not used and distributed according to the measures and degrees of necessity and in a planned way that is oriented towards answering the needs of the society, there is no other way than the loss and re-establishment of that hypothetical ratio.
Congress Documents show that the MKP has neither understood the process of capitalist production and the cartels that emerged through this process and their roles on the production within the context of their historical meaning nor has it properly understood the chaotic nature of production of mode of cartels. This lack of understanding brings them to the thesis of "organized capitalism" or planned production and from there to the point of treating the capitalist mode of production without the production anarchy, bringing them further away from Marxism.
The Congress Documents state that what is meant by "demand proportional production" is that monopolies, which control 80% of the world production "are able to control the market's capacity and demand in a more proliferated way and are able to produce in a more planned and regulated way compared to the past." (p. 23)
The MKP, which renders capitalism prevalent in its Congress Documents, concludes on page 93 that "...semi-feudal production relations have not entirely disappeared but they are no longer the chief contradiction," in which not having disappeared entirely comes to the meaning of no longer being the primary, similarly with the production anarchy, where it has not entirely disappeared, meaning that it is no longer the primary, in other words the non-essential secondary.
As we finish this voluminous sub-header (voluminous because this problem draws on one of the most fundamental lines of Marxist political economy), we should point out to the following contradiction of the MKP, which is directly related to this issue:
On the page 25 of the Congress Documents, where it formulates their criticism of Lenin on the matter of free competition, they say that Comrade Lenin had stated that with the monopoly stage, free competition would gradually lose its effect; however developments so far have shown the contrary.
If this is the case, in that if free competition has not lost its importance with the emergence of monopoly capitalism, if free competition goes on at its full speed, then the competition that goes on in the economic arena among monopolies, as Marx put it, would take place only "through the lowering of commodity prices." (Capital, Volume 1, p. 643)
For that is the way to seize the market. And this is in line with the nature of the expanding re-production. So this means that realizing greater rates of large-scale production would translate into overproduction; and this would arrive at the anarchic character of the production, which excludes proportional or planned production.
In the name of changes in the imperialist system, in Lenin's words, "by superficially generalizing facts that are disconnected from the integral capitalist order," the MKP gives us a good example of clear and conspicuous distortion of Marxism. By attempting to find lines of changes in the production of anarchy, in the production that is based on lack of plan and randomness, it has entirely detached itself from the Marxist point of view. In Mao's words "by negating the fundamental principles and universal truths of Marxism," and thus by blunting the contradictions of capitalism, it has rolled down into the swamp of revisionism.
The MKP should know that it is a proven scientific analysis of Marx that the anarchy of production, which is based on the fact that the economic relations develop without relying on a single order, will not vacate its place to a "demand proportional" "organization of production." It seems that for the MKP, Marx's monumental work has remained as another unopened book.