It is necessary to note in passing that such a phenomenon was not unique to the Soviet-style economies. Exactly the same pressures apply to those below the top managerial ranks in Western corporations as they are expected to be able to respond to sudden changes in the pressures on them from above in response to changing competition. Under such conditions, the firms' costs of production can depart very widely from those which ought to be achieved. The result can be what one economist has called "xinefficiency"-a level of inefficiency in the company amounting to 30 or 40 percent of production costs.53 Production costs and the prices which would prevail in a "perfect market" depart massively from each other-to use Marxist terminology, there are massive short-term infringements of the law of value.
Such things are rarely studied by mainstream economists because both their micro- and macro-economics deal with what happens between firms, not within them. But there are repeated references to such problems in managerial studies. Interestingly, some Western studies concluded when it came to relationships between enterprises in the USSR "allocative efficiency" (that is, for Marxists, the law of value) did apply: "Inter-firm trade in factors of production may be as efficient as in market economies". 54
What produced crisis and waste inside Western enterprises and Soviet-style economies alike was the drive to accumulate at all costs. It meant, as we saw in Chapter Seven, investment expanding repeatedly at the expense of consumption, increased imbalances in the economy, a continual cyclical pattern to growth and increased alienation of the workforce. Figures given by the Russian economic journalist Vasily Selyunin in 1987 showed the increasing subordination of consumption to accumulation over nearly six decades, with only 25 percent of output going to consumption in 1985 as compared to 39 percent in 1940 and 60.5 percent in 1928. He concluded, "The economy is working more and more for itself, rather than for man". 55
His words echoed (probably unintentionally) those of Marx describing the logic of capitalism as "accumulation for accumulation's sake, production for production's sake" .56 But the drive to such accumulation was not only an expression of the alienation of the capitalist system for Marx. It was also the force ultimately behind the outbreak of crises. For it meant that accumulation reached a point at which it attempted to proceed faster than the extraction of the extra surplus value necessary to make it possible. At such a point new accumulation could only proceed at the expense of existing accumulation, as Grossman spelt out in his theory of "capitalist breakdown" . There was "over-accumulation of capital". The only response open to capitalists in this situation was to shut down the plant, sack some workers and try to restore profits at the expense of the wages of the others. Each of these moves had the effect of making it impossible for some of the already produced commodities to be sold (or, in Marx's words, for the "realisation of surplus value" to take place), creating a general overproduction of goods in relation to the market.
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Capitalism in the 20th Century