Problems of Improving Relations of Production in the Socialist Economy

Hasan Banja

– professor, director of the Institute of Economic Studies under the Academy of Sciences of the P.R. of Albania.

Albania Today, 1973, 6





In the whole thirty years it has worked to build socialism, the PLA has relied on the precepts of Marxism-Leninism, which pay great attention to economic relations as well as to the economic laws and categories which express them. On this basis, by 1967 in Albania, the problem of socio-economic transformations was fully solved, and since then the economic order has been represented by complete socialist ownership of the means of production in its two forms, state and cooperativist ownership.

Now in Albania, people are working for the complete construction of socialist society and the creation of the basis of communist society.

At this stage stress is being laid on the steady improvement of the relations of production.

The article sets out the course followed by the PLA to reach this goal.

Under the leadership of the party and comrade Enver Hoxha, in the last 30 years of free and independent life, the Albanian people have been struggling and working, with constant vigour, to push on with the revolution and socialist construction in all fields, under the conditions of the imperialist-revisionist encirclement. In this great revolutionizing process, the struggle for the total establishment of new socialist relations of production, and to improve them constantly, is an important element.

In order to give a general, clear idea of the ground covered and the victories achieved in relations of production, it is necessary to mention briefly some fundamental theses of Marxism-Leninism on this essential question.

The founders of scientific communism made a profound analysis of human society, especially in its capitalist form. They did not confine themselves solely to examining ideas about society, but they went further, distinguishing, as V.I. Lenin wrote “the economic area from other areas of social life, distinguishing the relations of production, from all other social relations, as the fundamental, basic relations, which determine all the rest”. (V.I .Lenin, Works, Vol. I. p. 143.)

This is one of the scientific discoveries of Marxism which has historic importance. It is for this reason that in the economic policy of our party and socialist state, economic relations as well as the economic laws and categories which express them objectively have always been seen as vital and are treated with great attention, in the light of the precepts of Marxist-Leninist theory.

In conformity with this, within a comparatively short period of time in Albania, transformations of a deeply revolutionary nature took place in relations of production. The revolutionary experience of our country, and the results achieved, have further enriched the theory of Marxism-Leninism, introducing those particular, specific aspects which peculiarities of our past national economic and social development occasioned.

Although the classic originators of Marxism-Leninism formed the theory of scientific socialism, relying on the detailed analysis of the developed capitalist countries, and proved on this basis the historic inevitability of the disappearance of capitalism, they also stated that parallel with the formation of the general laws of the transition from capitalism to socialism, some specific conditions in individual countries must also be kept in mind.

The proletarian revolution is essentially distinguished from bourgeois revolutions because, in bourgeois revolutions, the task of the popular masses was to eliminate feudalism, anarchy, and the medieval social structure. The bourgeoisie takes political power into its own hands, thereby adapting the superstructure to the economic base it created under feudalism. The bourgeoisie does not implement radical reforms, because feudalism and capitalism are modes of production of one and the same type, based on private ownership of the means of production and the exploitation of man by man.

The socialist revolution poses a different problem. The socialist mode of production cannot emerge spontaneously in the bosom of the old social order, where only some material conditions and opportunities can be created. However, in our country, the capitalist social order, which constituted a definite epoch for many countries, was still in its initial stage of development.

Therefore, in order to create the socialist mode of production, a whole historic period is needed which, as Marx and Lenin have explained, can only be the period of transition from capitalism to socialism.

In its narrow meaning, the period of transition begins with the seizure of political power by the working class and ends with the building of the economic base of socialism. In the broad meaning of the word, the transition period ends only with the construction of the communist society. In the economic field, the objectives of the period of transition are reached by solving two fundamental problems: first, the socio-economic transformation of the country on a socialist basis, and second, the construction of the material-technical base of socialism, with a view to carrying out the technical revolution.


The first milestone of the period of transition in our country was reached successfully. The sixties have gone down in our country's history as the years in which the construction of the economic base of socialism was concluded. By 1960 the problem of revolutionary socio-economic transformation was over in general, and by 1967 it was completely solved.

The socialist economic order is now represented by complete socialist ownership of the means of production in its two forms – state and cooperativist. The relations of ownership of the means of production are those which now determine the development of all the economic and social aspects and component elements of the new order. They set the tone for relations of distribution, exchange and consumption.

The current fundamental characteristic of our socio-economic order is that it develops on its own basis.

The revolutionary transformations in relations of production, as well as the work we must now do to improve them further, are viewed in close connection with the productive forces. In this respects, the party has been guided by some fundamental considerations, in the first place by the sociological law that the development of the productive forces must comply with the character of the relations of production; and by the Marxist-Leninist thesis that although the development of the productive forces is a vital necessity, they alone are not revisionists, who have adopted the “theory of the productive forces” put forward by the leaders of the second International, Kautsky, Bayer, etc.

Stating the need to improve the new socialist relations of production in coordination with the development of the productive forces, our Party and socialist state are also mindful of the fact that in the first stage of socialist construction in our country, the new socialist relations of production were created without waiting until the construction on an adequate material-technical base was complete. As a consequence, socialist relations of production not only were based on the level of productive forces inherited from the past, from the semi-feudal and semi-colonial order, but also, for some time, they kept the stamp of that former stage. It is a characteristic of socialist construction in Albania that the contradiction between the productive forces and the relations of production did not appear in its classic form, where the productive forces reach a high level of production and come into conflict with constricted relations of production. However, as the social expression of the productive forces, the relations of production come into contradiction with and hinder the development of the productive forces; which form their material base even when these are at a relatively low level. Just this phenomenon could be observed in our country.

Therefore, improving the relations of production and the co-ordinated, continual development of the productive forces, constitute two aspects of the same basic task. Any theory which considers the development of the productive forces and the technical scientific revolution as "independent" social processes and sees the relations of production as purely the external manifestation of the development of the productive forces is alien to Marxism-Leninism. Both the productive forces and the relations of production develop objectively, not subjectively. The proportions and directions of their development cannot be determined by what men want to happen.

Any detachment of the relations of production from the material conditions and possibilities of the society, from the level of development which the productive forces have reached, leads to arbitrary, subjectivist actions.

It is for these reasons that after the economic base of socialism had been successfully built, improving the relations of production and rapidly developing the productive forces are the most acute problems which must be solved at this new stage of the complete construction of socialist society, which our country is now going through. “This stage – as comrade Enver Hoxha has said – has brought forth a series of new problems, such as the complete construction of the material and technical basis of socialism, the strengthening of the dictatorship of the proletariat and the struggle against the danger of bureaucracy, the development of the technical-scientific revolution, workers' control and many other things”. (Enver Hoxha: Brochure: “Study Marxist-Leninist theory in close connection with revolutionary practice”, page 51.)


The complete construction of socialism is connected with the solution of a series of problems which affect both the material and the spiritual development of our society. The question is how the new socialist social order can best be strengthened and developed further, towards its complete form, in its economic base as well as in its political, ideological, juridical and ethical superstructure, etc.

All the aspects of socialist relations of production, – relations in ownership of the means of production, distribution, exchange and consumption – must be improved, but this is not merely a technical, production-oriented task, as the bourgeois and revisionist ideologists, sociologists and economists are trying to make out, concentrating their entire attention on “adapting” the relations of production to the development of the productive forces.

As distinct from this view, the Marxist-Leninist thesis sees the problem not as one of overcoming the economic and social consequences of the development of the productive forces and the technical-scientific revolution, but of giving them, right from the beginning, a socialist content.

The economic relations of socialism are characterized by some major features: they emerge, are perfected and develop at all stages of extended socialist reproduction – in the process of production, distribution, exchange and consumption, giving priority to production. They have a social character, include the inter-action between classes and men, and are material, not in the physical sense, but because they exist objectively.

Although the type of socialist relations established in our country has not changed in essence in the process of the struggle to build socialism, important changes have occurred within them. They have now become more mature, they are broader, and they exert a greater influence on the general ideological, political and socio-economic development of our country.

Thus, for this theoretical and historical reason, and under the influence of various ideological, political and socio-economic factors, the socialist relations of production are in a process of continuous development and improvement.

The economic structure of our socialist order is characterized by transitional situations, the building of socialism and elimination of the “stains” inherited from the old order, and socialism's gradual transformation into the communist society. Neither the “stains” inherited from the old feudal-bourgeois order, nor the features of the new socialist order, are found in socialism in its pure state. However they are characteristically found, woven together, in the process of continual transformation.

In compliance with this, the task of improving relations of production is internationally designed, first, to combat alien manifestations, the “stains” of the past in the consciousness of men and in the relations between them so as to close all the possible loopholes by which alien capitalist-revisionist influences may penetrate; second, to strengthen the socialist character of the new relations of production, their special aspects and component elements; third, to clarify development, paving the way for positive tendencies and making preparations for the future, thus laying the foundations for the communist society.

From the ideological and political aspect, improving the socialist relations of production is the principal condition for preserving the great historic revolutionary victories that have been reached so far in socialist construction here, opening the way for the complete construction of socialist society, and ensuring the revolutionary ideological and political education of the labouring masses with the high qualities of proletarian morality, so as to strengthen the dictatorship of the proletariat. From the social aspect the perfecting of socialist relations of production is the basis for strengthening the alliance between the working class and cooperativist peasantry, and the correct harmonization of interests in a socialist society, always giving priority to collective and long-term interests, without neglecting immediate and individual interests. From the economic aspect improving socialist relations of production makes it easier to develop the productive forces, and is an important factor in the all-round development of the material and spiritual life of socialist society, in production and other social activities.

Improving the socialist relations of production with regard to these aspects, is a process which has an active influence on the superstructure of our society. Relations of the superstructure are social relations. But they differ from economic relations, because they do not emerge in the process of production, and are not directly connected with the development of the productive forces. In their formation they necessarily pass through the consciousness of men. Although relations of the superstructure have a special character and constitute the subjective factor in the development of our society, they are closely connected with the relations of production in a reciprocal process of cooperation.

The development of the superstructure, just like the development of the productive forces, cannot solve the problem of improving economic relations in the socialist society. For this purpose it is necessary to bear in mind the requirements of the objective economic laws and categories of socialism. Without this, it is not possible to guarantee that tasks will be successfully carried out or that the scientific level of all economic work will be raised.


The relations of production appear first in ownership of the means of production. The nature and character of the relations of ownership determine the nature and content of all other economic relations.

Marx and Engels wrote in the "Manifesto of the Communist Party” that ownership is the fundamental question of the worker's movement.

Today, capitalist ownership of the means of production is the basis of the exploitation of wage labour, and the appropriation of the results of work, which is the source of capitalist accumulation.

Since it is the predominant, determining area of relations of production, ownership of the means of production is the focus of the theory of scientific socialism, in struggle against the apologists of capitalism, who proclaim that bourgeois property is sacred and eternal, as well as against the revisionists who, through the measures they have implemented, have eliminated social ownership, turning the means of production at the start into the property of individual collectives, which are under “self-administration", or else changing socialist property into state capitalist property of a special type.

In this vital question of principle, our party has adopted a correct Marxist-Leninist stand. After the successful realization of revolutionary transformations in relations of ownership, through thenationalisation of foreign and local capital and the socialist collectivization of former small producers, socialist ownership is now being constantly strengthened and extended, and becoming more mature.



"Irrigation" black and white by Pandi Mele




In strengthening and developing socialist ownership and increasing its range, capital investments and construction are important, as is the technical and scientific revolution. The fifth five-year plan (1971-1975), on the basis of the directives approved by the 6th Congress of the PLA, contains considerably increased finance for developing the economy. A total of about 16.5 billion leks will be invested which is 70-75 per cent more than the investments made during the first, second and third five-year plans taken together. In the structure of investments, two main trends clearly emerge: the specific weight of investments in the productive sectors has been increased, along with the investments designed to develop industry.

Such large funds, set aside to develop and strengthen socialist ownership, will improve and modernize its structure, increase concentrated specialization and cooperation, and promote the social division of labour, bringing new resources into economic circulation.

In this way, state property, as property of the entire people, with its high degree of socialization and economic efficiency, will further increase its leading role in the whole system of the socialist economy. Since it has so much weight and plays so large a role, and because it expresses the most general, long-term interests, it not only develops in itself, but also promotes group ownership in the countryside.

In Albania, the relations of ownership in the countryside will be improved by pursuing these main lines: First, by strengthening existing group ownership, and intensifying it; second, by uniting some group-owned properties, which are then owned jointly, that is by raising the degree of socialization, within the framework of collective ownership; third, by bringing group ownership closer to ownership by the entire people, creating, as an effective intermediate form, agricultural cooperatives of the higher type in the most fertile lowland areas of the country; and, fourth, by means of direct transition, in cases where it is absolutely necessary, from group ownership to ownership by the entire people, on the basis of complete agreement by the peasantry, of their own free will, and the economic possibilities which the socialist state provides.

All these ways of improving the relations of socialist ownership in the countryside are interconnected and will be realized gradually step by step, as an organized, conscientiously directed process, depending on whether the conditions are ripe, and dividing it into two stages: the gradual quantitative and qualitative merger of group properties into large units, and merging cooperativist ownership into ownership by the entire people, which is the eventual aim for the future. It is important that these two stages should be seen as the natural road of development for cooperativist ownership to take.

Another important factor in improving relations of ownership is an increasing degree of socialization in social production through concentration, specialization and cooperation. A general feature of our economic development is the constantly increasing degree to which production is socialized and the social division of labour grows deeper. But despite this, there is still room for these processes to continue in our economy.


In the framework of socialist relations of production the relations of distribution are quite important. Here general social interests are interwoven with the interests of the collectives and individuals. The relations between them are relations between the general and the particular or individual, between the complete and the partial. There is a community of economic interests, but they are not identical; on the contrary, they are relatively independent.

Briefly, the relations of distribution are grouped first into relations governing the distribution of the means of production and the labour force in the people's economy; second, in relations governing the distribution of incomes and consumer goods for personal use.

Relations of distribution of the product are rather sensitive and the improvement of other aspects of socialist relations of production depends to a great extend on correctly solving them, together with any contradictions which consequently arise. In the final analysis, these relations find concrete expression in the way national income is used and in how it is divided into accumulation and consumption funds; also in how the consumption fund is divided for personal and social consumption.

By far the greater part of the needs of the working people are met from the personal consumption fund, which finds concentrated expression in wages for work done. Under socialism, wages have continued to play their important role in economic motivation of work and just distribution of the results. The Party strictly implements the Marxist-Leninist scientific criteria on wages. Our wages system has been constructed in such a way to make distinctions between jobs, so that heavy work is paid more than easy work; work which is carried out under difficult conditions is paid more than work under normal conditions; work which requires a higher degree of qualification is paid more than less qualified work; and work done in the major branches and sectors of the economy in general is paid more than work done in other branches and sectors.

In compliance with these principles and criteria, our wages system has been built so that pay is differentiated, without allowing great differences in living standards between various groups of working people and yet, without falling into petty-bourgeois levelling.

The role of the social consumption fund too has grown steadily, this helping to increase the real incomes of the working people. During the decade from 1961 to 1970, the consumption fund as a whole increased by 60 per cent, and the social consumption fund by 98 per cent. Thus the tendency is that within the consumption fund as a whole the social consumption fund grows faster. This has made it possible for society to fulfil the needs of the working people for a free education and medical service, increased social security, old age and family pensions, and other social assistance. Today, expenditure in the social and cultural field accounts for more than one quarter of all state expenditure.


In improving socialist relations of production exchange relations in productive activity and economic management are also important.

Here there is a series of problems which, in our country, are solved by methods diametrically opposed to bourgeois-revisionist “theories” and practices.

Our socialist economy has been organized and is managed consciously, on the basis of the principle of democratic socialism and the unified and general state plan. Spontaneity and capitalist anarchy, revisionist stagnation and self-administration, are alien to it. Concepts and views that have nothing in common with scientific socialism are also alien to it, for example, the concept of “market socialism", which refutes centralized and planned management of the economy, gives complete independence to enterprises, and proclaims spontaneity to be the regulator of socialist production.

Here our party adopts a correct stand; it does not underrate, but at the same time does not overrate or absolutize the role of the market, the law of supply and demand, and the law of value in general.

In this framework we have solved and steadily strengthened economic ties for the exchange of productive activity between the countryside and the town, between agriculture and industry, as well as within them. The measures recently carried out to improve the stocks and supply system, the price system, etc., had this aim. They led to the complete abolition of the procurement system in those products in which it was still used and of payment in kind and, to the establishment of unified state purchase prices according to area; these have greatly contributed to the increase of agricultural and livestock production.

Improving socialist relations of production has broad and complicated effects on socio-economic activity in the country. This is a dynamic process which constantly develops. Implementing correct relations of production in the light of Marxist-Leninist precepts and in close connection with the productive forces, will accelerate the complete construction of the socialist society and the creation of the basis for the communist society.


Party of Labour of Albania